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Plug-in electric vehicles just became a little more affordable in Maryland

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May 24, 2010 – Comments (8) | RELATED TICKERS: FPL.DL2 , EXC

In an article last month called The Gas Station of the Future? I talked about how plug-in electric vehicles will begin to arrive at dealers later this year and wondered aloud what sort of impact they will have upon electricity consumption.  Any significant adoption of electric vehicles by the public would be a huge unforeseen boon for power companies.

One of the main problems with electric vehicles, other than their limited range of course, is their cost. The batteries that are needed to power plug-in vehicles are expensive.  The Nissan Leaf will start at $32,780 and the Chevrolet Volt is rumored to be even more expensive at around $40,000.  That's pretty expensive for relatively small cars.

These prices aren't as bad as they first appear though because the Federal government is going to provide a $7,500 tax credit on every electric vehicle sold (I'm not saying that I agree with the policy, just that it exists).  That credit drops these cars' prices to around $25,280 and $32,500, respectively.

Now individual states are jumping on the tax credit bandwagon.  California is currently offering a $5,000 tax credit on the purchase of electric vehicles (where on Earth is that money coming from?) and just today Maryland introduced a $2,000 tax credit on electric vehicles.  As an added bonus, MD is allowing electric vehicles to drive in the HOV lanes regardless of the number of passengers.

The initial plug-in electric vehicles won't be cheap, but with the government tax credits they will be much more reasonably priced and likely sold in higher numbers than they would have been.  It still remains to be seen how the public will accept plug-in vehicles or probably more importantly how the technology will evolve over the years to make them have a greater range and be less expensive, but this is definitely a situation that anyone who owns or is thinking of purchasing shares of electric utilities should keep an eye on.

Deej 

Long FPL & EXC 

8 Comments – Post Your Own

#1) On May 24, 2010 at 10:33 AM, outoffocus (23.23) wrote:

Actually wont the tax credits, like most other credits, make the cars more expensive?  With government subsidizing the price of electric vehicles, there will be no incentive for the car companies to make them cheaper.  Have we not learned our government subsidization lesson yet?

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#2) On May 24, 2010 at 10:40 AM, catoismymotor (< 20) wrote:

Plug-ins are okay, but you can only go as far as the cord will reach. And I imagine towing a giant spool of extension cord will hamper performance.

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#3) On May 24, 2010 at 10:48 AM, TMFDeej (99.27) wrote:

HA.  I actually have a neighbor who has a plug-in lawnmower.  They always lug around a huge extension chord when they mow their lawn.  I think that the odds of me running over the chord on one of those things is 100%, sort of like when I accidentally cut the chord on my electric hedge trimmer :).

Focus, I don't think that automakers are going to make any significant money on electric vehicles for a long time.  Both Nissan and GM have already admitted that they are going to sell them at or below cost.  They want to be the first to market with a potentially disruptive new technology.

The light vehicle market is uber-competitive.  In fact, its a pretty terrible business a lot of the time, with airline industry like price wars.  Regardless of the government incentives, the manufacturers' desire to boost sales and undercut the competition will probably always prevent them from gouging customers.

Deej 

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#4) On May 24, 2010 at 11:28 AM, catoismymotor (< 20) wrote:

Deej,

My parents had a plug in lawn mower. Yours truely was forced to use it. It felt like I was vacuuming the yard. After I chopped three cords in two I figured out the trick. When I left home and dad was forced to use it he bought a regular lawn mower before long because "that thing's a pain in the neck." I think he is happy now that my mom has hired a landscaping service.

I like the idea of plug-n electric cars. I thik they have merit. They will help with the new average fuel economy requirements laid down by law for auto makers. I have to admit the system that GM is using for the Volt makes the most sense to me as it is reminisent of how modern day diesel/electric trains are powered.

I know that they hardly have an impact when compared to a car but I think it would be really cool to have some scooters (not grandma's three wheeler) made that are plug-ins. I bet with a application that small the cost of the vehicle would be almost identical to the piston powered version. Heck, the battery might be small enough to remove, carry and charge indoors.

Thank you for the story and the links.

Cato

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#5) On May 24, 2010 at 2:45 PM, TMFDeej (99.27) wrote:

Here's a related story:

DETROIT (Bloomberg) -- Ford Motor Co., working to make a quarter of its vehicles run at least partly on electricity, plans to invest $135 million and add 220 jobs at three Michigan facilities to help it introduce five such models by 2012.

Ford investing $135 million, adding 220 jobs for electric vehicle work

Deej

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#6) On May 24, 2010 at 4:57 PM, xroad1 (< 20) wrote:

There are no range issues with a Chevy Volt. They are extended range, so you can just fill up with gasoline to recharge the battery.

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#7) On May 25, 2010 at 6:35 AM, TMFDeej (99.27) wrote:

Very true, the Volt has a gasoline engine that is used to recharge the battery on extended trips.  I actually like this idea better than a straight electric vehicle like the Leaf.  Of course, the batter is already heavy and the engine / gas add even more weight to the Volt so it's not as efficient as it would be without these things.

I'm impressed that the General came up with a better idea than Nissan (IMHO), the question is whether they will be able to execute on it.  In the past I would have said, no way GM will definitely find a way to screw this up...but its new models like the Equinox, Buicks, have been better so we'll see.

I'm anxious to see what these vehicles are like when they're available.

Deej 

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#8) On July 19, 2010 at 8:22 PM, BrandonPaulChevy (< 20) wrote:

is this for real? seen a tahoe in an online store located in maryland. I would love to buy a tahoe coz chevy tahoe parts are really reliable especially on long trips. It doesn't really break down easily.

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