Electric vehicles are not like conventional or even hybrid electric vehicles, and hard lessons have been learned by startup and established automakers alike. Don’t forget the lessons that drivers need to learn, as well!
Shai Agassi, founder of now-bankrupt electric vehicle startup Better Place, still thinks the best way to produce a market-upsetting electric vehicle is to separate the cost of the vehicle and the battery. Conventional vehicles are priced the same way. Ask people for one thing that makes electric vehicles difficult to adopt, and cost is certain to be high on the list, due, in large part, to the expensive battery pack. The problem, Agassi asserts, is that the cost of the fuel, or the battery, in the case of an electric vehicle, shouldn’t be part of the cost of the vehicle, just as it isn’t part of the cost of buying a conventional vehicle.
After all, you don’t buy five years of fuel with a five-year financing deal, do you? Imagine if you had to finance your new Toyota Prius c and the gasoline over a five-year financing deal? Now, instead of paying $25,430 for the car with most of the options ticked, you’re telling me it’s going to cost an additional $5,250? Even with a decent APR, that’s nearly $100 difference in payments.
While the Tesla Motors sales model is working well and looking to sell better than 20,000 vehicles this year, it will decidedly remain a niche vehicle. Even though it isn’t technically a luxury vehicle, it is replacing luxury vehicles faster than luxury vehicles. Starting at better than $60K, the Tesla Model S certainly doesn’t fall into Everyman’s garage. Agassi suggests that if an electric vehicle could be sold for something like $9,999 and add a battery package to the deal, say $300/mo, battery and electricity included, it could revolutionize the way electric vehicles are viewed and sold.
It kind of makes sense, since battery technology is advancing more rapidly than the internal combustion engine has in the last twenty years. Why would you want to buy an electric vehicle with a battery that is sure to be obsolete in the next year? Just for a quick comparison, a base Tesla Model S might go for $1,091/mo [not including electricity], compared to $475/mo for Agassi’s economy electric vehicle. Interestingly, the Toyota Prius c [fuel included] would be more expensive at $536/mo.
The question is, “How many people can wrap their head around the idea and separate the battery from the electric vehicle, just as they separate the gasoline from the conventional vehicle?”
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