I was reading here: Here’s How Electric Cars Will Cause the Next Oil Crisis, that the more miles an EV drives, the more economical battery packs become. I don't understand this assertion. I see battery packs as a resource with limited amount of discharge/charge cycles. Why is it more economical to run out of cycles early rather than later?

  • Not mentioned below is the time value of money. It's often left out of naive cost-benefit analyses, but for long-lived products is crucial. In the short run changes in the price of oil probably matter more. Since with an electric car you pay a premium up front, then save over time, if the cost of money is high (high interest rates or inflation), that will increase the cost of the electric car compared to the fossil one. But right now with low interest rates, electric cars benefit accordingly. – Ⴖuі Apr 6 '16 at 7:47

The immediate previous sentence says:

The other unknown that BNEF considers is the rise of autonomous cars and ride-sharing services like Uber and Lyft, which would all put more cars on the road that drive more than 20,000 miles a year.

If there is a benefit to electric vehicles per mile driven, that benefit will be realized more quickly by someone who's driving a lot of miles, and if the payback period is quicker, there's a stronger economic argument for them.

Battery packs may have a limited number of deep charge/discharge cycles, but a lot of short rides (like may happen with Uber/Lyft) may produce a usage pattern where a lot of miles are being driven per deep discharge cycle and a lot of miles gotten out of the life of the battery. Because the battery is a high initial fixed cost and the marginal per-mile cost of electricity is relatively low (compared to the marginal per-mile cost of a gas-powered car), the more miles you can amortize that initial fixed cost over, the stronger the economic argument becomes for paying that initial cost.

Also, the previous paragraph says:

Manufacturers need to actually follow through on bringing down the price of electric cars, and there aren’t yet enough fast-charging stations for convenient long-distance travel.

So the longer the range of an electric car, the more sense it makes to buy one. This isn't directly what the quote you're wondering about refers to, but it could be a point in support.


The article is considering the total costs of ownership of electric vs internal combustion engined (ICE) cars, including purchase and running costs. One of the benefits of electric cars is that fuel costs are very low; the car costs more to buy, but costs less to run. The point at which owning an electric vehicle becomes more economical than an ICE one depends, therefore, on the mileage that it covers during its lifetime.

Earlier in the article, the author has mentioned that a large proportion of the cost of an electric car is the cost of the battery, and in the previous paragraph they note that low oil prices lessen the appeal of electric propulsion. While the paragraph in question is unclear, I therefore believe that the point that the author is making is that electric vehicles will be more economically advantageous at a higher price point for high-mileage users (such as taxis) than for the general population - and therefore that taxi services may be amongst the early adopters of this technology, and may cause a more rapid takeup of electric vehicles than would be predicted by somebody who did not take this into account.

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