USA EV light vehicle owners save $315 billion+ per year by 2036
When light vehicle gas consumption falls by 50%, what will be the yearly savings for the US households, state and federal government and commercial use cases?
By 2023, the options for EV’s will expand to light trucks, SUV’s, Vans, sub compacts, sedans and will be offered by more than 35 vendors. List prices are expected to range from $25,000 to $100,000+ with a minimum range of 250 miles for the $25,000 list price. The range for EV’s is currently up to 600 miles. The expected life of the new LFP (Lithium Iron Phosphate) battery is 1,200,000 miles. EV’s have a 5-star (best) safety rating in all federal crash test ratings. It appears EV’s are ready to have a go at replacing fossil fuel light vehicles.
https://www.motortrend.com/features/electric-car-companies-make-electric-cars/
EVs have won over the luxury car market. In the US, as of this date of November 13, 2021, only BMW and Lexis outsell Tesla. This is for gas and electric! Mercedes gave up third place to Tesla. Will they respond? Yes, all vendors are already doing so with new EV models just introduced or soon to be released. Why are the over $40,000 + car purchases going from gas to Tesla? Because it is fun to drive. Soon there will be many more choices and the strong trend is to move from gas to EV.
US: Tesla Sold More Cars Than Mercedes-Benz Through September
https://insideevs.com/news/546719/us-tesla-sells-more-mercedes
Nov 10, 2021 · US: Tesla Sold More Cars Than Mercedes-Benz Through September Lexus and BMW are not far away, so Tesla might soon be the #1 premium brand by volume. Nov 10, 2021 at 8:39am E
In September, in Germany Tesla Model 3 has surpassed the cars of the nation’s traditional brands such as the BMW Serie 3, l’Audi A4 and the Mercedes C Class. Indeed, the American sedan has sold more than all these cars combined, surpassed only by the Golf.
Bottom line electric cars are gaining market share against gas cars.
What about the current lower priced middle-class market? There are two interesting trends. First, compared to $25,000 Toyoda Camry, the $40,000 Tesla Model 3 has a lower cost of ownership. In price of fuel, maintenance costs and resale, the so-called expensive Tesla Model 3 is cheaper to own.
The second trend is many of the US trade ins to Tesla are lower priced sedans, customers are trading up.
Pre Orders for Ford’s new electric truck and the Tesla truck exceed 1,000,000 units. Tesla demand for sedans, in part, is pushing delivery out 3 + months. Ok, the demand is strong and growing, but how long will it take to replace enough of the 290 million fossil fuel light vehicles in the US to reduce fossil fuel consumption by 50%?
Tesla’s are being ordered by police departments. Hertz ordered 100,000 units for rent and they plan to offer 50,000 for use by Uber drivers. Amazon has ordered 100,000 EV van units from Rivian. Why? Bottom line the cost of ownership is much lower for the use case of professional use of light vehicles. This article in the following link illustrates the cost issues.
https://bob-n-martha-roth.medium.com/working-stiffs-gain-100-000s-shifting-to-ev-4410696a2246
It describes how an uber drive who switches to EV at age 25 will save $300,000 over 40 years. The savings are in fuel, maintenance, and replacement cost. Replacement cost is lower because the life of the EV more than 2 times that of a gas vehicle.
It is estimated that 10% of light vehicles consume 30% of the fuel in the US. Assuming 10% of 290,000,000 units in the US or 29 million units, how long to replace them? Unit sales of light vehicles in the USA were 17 million a year before covid. Assume more than 10% sold per year are high mileage vehicles (30,000+ miles per year compared to 13,500 for the average vehicle) as they need to be replaced sooner than average or low mileage use cases. My guess, 3 million gas vehicles per year are ready for replacement in high miles per year use cases.
By 2023, the savings of $7000 per year plus government credits plus the success of early deployment of EV’s by Amazon, Hertz and police cases will prove the benefits in dollars saved per year. Assume the savings drive sales to 3 million per year as EV’s replace higher cost to own gas. 29 million high use vehicles / 3 million per year or about 10 years to reduce fossil fuel by 30%.
When will noncommercial light vehicle sales of EV’s equal the sales of gas vehicles? The average price of vehicles in the US is $40,000. In the $40,000+ vehicle price range, EV’s are currently leading gas vehicles in sales for a single vendor (highest except for 2 vendors in the US, number one in Europe). 35 vendors plan to release new EV’s by 2023 and many plan to phase out gas vehicle sales, ramping up EV models and ramping down gas model by 2035. The market share of EV could be close to 100% by 2035.
Multiple vendors are expected to introduce EV’s with a price of $25,000 or less in 2023. With tax incentives these will cost on the order of $17,000. In addition, the cost of ownership for light use vehicles will be around $15,000 less than gas assuming they are kept 7 years for 100,000 miles of use. So compared to a $23,000 gas vehicle the EV cost of ownership is a strong buying incentive.
My guess is from 2025 to 2036 EV will capture more than 50% of the new vehicle market per year, on average, at any price point. The total sales on the order of 14 million light use vehicles per year x 50% or 7 million per year. My guess is 77 million gas vehicles will be replaced by EV’s through 2036.
90% of light vehicles account for 70% of the use of gas in the US. So, 290 million units x 90% or 261 million unit accounts for 70% of the gas use. If 77 million become EV’s, gas consumption would decrease by 77/261 X 70% or about 20% reduction in gas by 2036.
About 10 years to reduce fossil fuel in commercial use cases by 30% of total US consumption, Another 20% reduction for low mileage use cases or about 50% total reduction of fossil fuel by 2036.
USA savings in fuel, maintenance, and replacement cost about $7000 per year for 29 million vehicles used in commercial applications = $203 Billion per year.
Non commercial savings about $1500 per year for 75 million used in non commercial, low mileage cases = $112 Billion per year.
Of course, these are just rough guesses based on current progress in EV’s and rapid sales growth. And they don’t account for the continued investment in EV’s and infrastructure that will make EVs more attractive. Like cell phones, there will be continuous improvement in price and performance. Equally important, consumer acceptance will grow as they see the real-world experience of EV users and lose the fear of buying a new technology.
If US light vehicle fossil fuel consumption decreases by 50%, the potential savings are on the order of more than $315 Billion per year and growing. $Trillions per decade saved going forward.
Fuel, maintenance and end of life saving of EV over fossil fuel- $315 billion per year
Reduced demand for oil will lower gas prices so the vehicles still using gas will save on fuel costs. I am not sure how to forecast this…
Avoiding health costs due to pollution from fossil fuels (reduced medical costs) will save money, lives and pain. From “Saving US” by K Hayhoe: “Fossil fuel generates ozone, particulates and other pollutants making it hard to breathe deeply, causes coughing, and damages our lungs, leaving them vulnerable to infection. Those who suffer from lung conditions such as asthma, emphysema and bronchitis are especially at risk.” You can research how air quality improvements in LA reduced health care costs or how air pollution for light vehicles cost Salt Lake City money each year and is a major source of pain. My swag for reducing fossil fuel by 50% is the US will save $15 billion per year in reduced health care costs, half of todays estimated cost.
Better US economy due to higher export of US oil and more stable oil supply and prices for fossil fuels.
Lower chance of a war from Iran or other powers threatening world oil supplies. Potential savings $1 trillion to $2 trillion.
Lower acid levels in US waters due to lower use of fossil fuels increasing farm and fish yields.
Some of my assumptions:
The new LFP battery supplies most of the unit demand and makes 10.5 million unit production per year possible from the 35 EV vendors.
The Li Ni Co (lithium nickel cobalt) battery is used for higher performance models.
At the low price point for EV’s, the acceleration will be limited to 0 to 60 in 6 seconds (better than most gas models at the same price point) reducing the size and cost of a battery to achieve 250 mile range with lowest cost.
250 mile range is enough for more than 90% of vehicles use cases.
US average miles per day 37 miles.
In the US, trips of more than 300 miles are 0.1% of trips. Assume vacations 2 weeks a year, travel two days each way or 4 days of more than 300 miles travel. 4/365 or 1% of trips if driving. 0% if flying.
95% of trips are less than 30 miles.
Gas prices $3.50 per gallon
Electrical energy cost $0.137 per kWh
Average MPG of US light vehicles is 25MPG
EV efficiency average 0.25 kWh per mile.
The expected life of Li Ni Co battery is 460,000 miles
The expected life of Li Fe P battery is 1,200,000
97% of EV charging is by Level 2 charging overnight.
The cost of generating electricity will continue to decline with increased use of wind, solar and battery storage. Even oil King Texas has electrical production of 25% by wind and solar and a fast continuous shift to clean energy is in process for Texas. And the rest of the country is not far behind.
