230 miles per gallon for the Volt? How much is that in cents per mile?

Posted on 12 August 2009

Eager to appear as green as possible to its new owners, GM  (Government Motors cynics call it) announced earlier this week that the new Volt model of plug-in hybrid would get an EPA rating of 230 miles per gallon in city driving.  It’s a brilliant marketing ploy given consumers’ obsession with the MPG benchmark, but it won’t take consumers long to detect the flaw in this measure, and realize they need a new way to compare alternative vehicles when the technology changes.

In the electricity business, faced with comparing gas-powered versus coal-powered versus solar or wind powered, engineers have developed the LCOE (levelized cost of energy or electricity) metric.  The EPA and the auto industry will have to do the same.  Miles per barrel of oil equivalent?  Miles per kilowatt-hour-equivalent?  More likely it will be something like US cents per mile, or euro cents per kilometer.

It is not only the fuel cost that has to be captured (electricity and gasoline) but also the capital cost of the vehicle… and, more importantly, the batteries.  Exact numbers are not known but a recent Carnegie Mellon University study pegged the Volt battery “base case” cost at $1,000 per kWh ($16,000 total for the 40 mile volt pack).

GM disputes this as being “hundreds of dollars” too high but has done little to dispel the rumor that the overall car will be priced at $40,000 (but subject to a $7,500 tax credit).  If you drive 15,000 miles per year at 230 miles per gallon you’re only using 65 gallons of gas, but do the gas savings alone make it worth the high upfront cost?

Edmunds.com runs the numbers against a Chevy Malibu Hybrid and concludes that the Volt may be green but it’s an expensive way to save the planet.  Even with the tax credit, the payback on gas savings between the Volt and Malibu is 9.5 years.  As Edmunds.com’s Kevin Smith points out

““EPA fuel-consumption measures are really inappropriate for the Volt. It’s an electric, pure and simple, which happens to carry an onboard, gasoline-fueled charging station for when there’s too much distance between electrical outlets.  The EPA doesn’t measure the energy consumed when charging the car via plug-in, and depending on your driving, that may be all the energy it needs.”

A headline number of 230 miles per gallon is nice PR, but little else.  We look forward to when GM starts making a real case for EVs with a metric that is meant to enlighten not confuse.