Electric cars are supposed to help protect and improve the environment, while also lowering the cost of automobile ownership. Well, the California government is making it a bit more expensive to own electric vehicles.
The California government is allowing their electric companies to enforce higher rates for those who seem to exceed the average amount of power used in the household. In other words, the owners of EV’s and plug-in hybrids will not be saving as much money over gas-powered cars as they thought as these rate hikes could directly affect them. This may hinder the chance for these vehicles to compete in the automotive industry, as not only do they already cost more, but the financial savings over gas cars could be curtailed if other states follow suit.
So what does this mean for gasoline powered vehicles? Some, such as the Chevy Cobalt actually seem to be the smarter, economical choice over an EV, like the Volt, when you get down to the dollars and cents of it. According to US economist professor, Wally Tyner, the Cobalt (which was just replaced by the Chevy Cruze) would be the better choice of vehicle only when oil prices are low. In Tyner’s study, he showed that the price of oil must rise between $171 and $254 per barrel in order to make the Volt the more economical choice to justify the extra $20,000 in cost. However, even with California’s electricity rates 35% higher than the national average (around 14.42 cents per kWh), charging the Volt and many electric cars is still far, far cheaper than filling up a tank of gas. But when half the state starts plugging in electric cars, will those same savings still be there?
Consumers are still trying to save money right now, and the high cost of EV’s as well as this increase in electricity rates will make these vehicles less financially attractive, government incentives or not. Funny that California, a state that prides itself on being green and progressive, would let this kind of legislation pass without thought of what it could do to EV acceptance. At the same time, we should have seen this coming. If EV’s are to eventually replace gasoline and diesel fueled cars and more and more people are driving EV’s and recharging them at the same time, than the costs of electricity are bound to increase, and the actual savings over a gas-powered car might not be as steep as we were led to believe. Besides, electric companies are still companies, and they need to turn a profit, so they can’t exactly “give away” electricity to EV drivers.
How far are people really willing to “go green” when the green in their wallets is about to take a hit?
Source: Carscoop via Purdue University