As the dawn of the electric vehicle age draws nearer, so too does the full realization of the cost benefit equation. One of the first to break cover both with the product package and pricing structure is the Mitsubishi iMiEV, so providing a good opportunity to assess whether these cars can compete with traditional petrol or diesel versions.
In the UK the iMiEV will be delivered to the first customers from January 1st 2011, with orders being taken now. Mitsubishi intends to take advantage of the UK government’s recently announced Consumer Incentive Scheme, such that the price has been set at £38,699 including VAT. The government grant will be worth £5,000 off the purchase price of qualifying electric and plug-in hybrid electric vehicles, making the transaction price £33,699 including VAT. In comparison, a Citroen C1 petrol car of comparable size has a retail list price of £8,495 to £10,645. So, broadly speaking the electric car is going to cost the buyer three times as much.
it would take about 13 years for the extra purchase price of the electric car to be compensated for by the lower running costs compared with the petrol car
The hope is that the running costs will be lower, both in terms of fuel and taxation of all types. Electric vehicle recharging costs will work out at about £115 per annum for a typical 12,000 miles, whereas the small petrol car will probably cost about £1,200. Add in the extra taxation and parking charges on the petrol car and the result is that the annual running cost is about £1,500 more than the electric car. At that rate, it would take about 13 years for the extra purchase price of the electric car to be compensated for by the lower running costs compared with the petrol car - which coincidentally is pretty much as long as a car lasts in the UK.
So, in terms of lifetime costs, even after factoring in the incentive allowance from the government, the cost of the electric and petrol cars seem broadly in line. Except of course that the battery pack may not last that long. More importantly, while Mitsubishi claim that residual values will be higher than normal, there is no evidence on this point thus far.
In fact, the relative advantages of the electric car in cost terms still hinge on some key unknowns. Residual value is one such unknown. Another is the lifetime service costs. A further one is whether insurance costs will be lower.
the relative advantages of the electric car in cost terms still hinge on some key unknowns
As a result, consumers (corporate or retail) are going to be asked to buy a car very much on risk. The only certainty is that the electric car will have a reduced performance envelope compared with a petrol or diesel car, and it will run the risk of being technologically redundant as early adopters pay for the learning curve.
OEMs such as Mitsubishi and Nissan deserve great credit for bringing electric vehicles closer to a mass market reality. But on this evidence it has to be said that we are not quite there yet as a rational purchase. It has to be hoped that there are enough conspicuous minimalists out there to allow a market niche to be expanded.
Dr Peter Wells is a Reader at Cardiff Business School, where he is a Co-Director of the Centre for Automotive Industry Research and leads the automotive industry research programme within BRASS, also in Cardiff University. Dr Wells is also a director of AutomotiveWorld.com’s sister website AWPresenter.com. He can be contacted on firstname.lastname@example.org.
The opinions expressed here are those of the author and do not necessarily reflect the positions of Automotive World Ltd.