Gas Stations: Will They Survive The Rise of Plug-in Hybrids?

Continued from an earlier post on gas stations.

Plug-in Hybrid Electric Vehicles (PHEVs) like the Chevy Volt and Volvo XC90 may have a greater impact on the demise of gas stations than pure electric BEVs. PHEVs will play a transitional role as they are not as big of a mental leap for car buyers as BEVs since they can function just like older internal combustion engine (ICE) cars–fill them with gas and drive[1]. They have the added benefit though of being able to be driven under electric power and of being able to recharge the battery from an electrical outlet.

Unlike traditional hybrids, most PHEVs use the gas engine only once the battery is drained. This has an outsized benefit relative to their battery size as most people only drive 20 to 30 miles per day. Someone who drives 15 miles round-trip to work and then maybe another five miles for errands may not purchase any gas for months.

Most PHEV owners reduce their fuel consumption by 50% to 80% which can be $500 to $2000 per year savings. These are from two friends who drive a Volt (left) and XC90 (right). According to GM about 62% of all miles driven by Volt owners is electric. The BMW i3 PHEV is believed to be near 90% while the current plug-in Prius is less than 20%. These are direct reflections on the size of the battery and electric range of each. My Volt friend averages about 2700 miles per tank of gas (He’s filled up 3 times since last summer) and once went nearly 500 miles without using any gas.

Most PHEV owners reduce their fuel consumption by 50% to 80% which can be $500 to $2000 per year savings. The above are from two friends who drive a Volt (left) and XC90 (right and background). According to GM about 62% of all miles driven by Volt owners is electric. The BMW i3 PHEV is believed to be near 90% while the current plug-in Prius is less than 20%. These are direct reflections on the size of the battery and electric range of each. My Volt friend has gone over 2700 miles on a single tank of gas, has filled up only five times in the past nine months and once went nearly 500 miles without using any gas.

While PHEV sales are growing quickly in Europe and Asia, we’re not seeing the same here. This is largely due to lack of available cars as manufacturers are supply constrained and for now are focusing on just Europe and Asia where the cars are very popular. Mercedes, Tesla, and others are rapidly building massive battery factories to meet demand so we’ll see this change in the near future.

Here’s a very quick rundown of a few PHEVs:

Mercedes and Volvo have said that they will offer PHEV drivetrains for all of their vehicles, most by the end of 2017. They have hinted that this will then become the standard with ICE-only cars largely phased out. Audi, GM, Porsche, and Hyundai have hinted at a similar future. Parsing words in their statements can be dangerous so we’ll have to see what really unfolds[2].

BMW has their iPerformance PHEVs that include the 330e, X5, X5 xDrive40e and 740e as well as the range extended version of the i3.

Chrysler has shown the Pacifica Hybrid, their first PHEV and the first PHEV mini-van. It has 30 miles of electric range and will be available in in the U.S. this August.

Mitsubishi-Outlander-PHEV-11The top two selling PHEVs in the world are not yet available in the U.S., the Mitsubishi Outlander (left) and BYD Qin. The Outlander has been very popular in Europe and Asia for three years and will be available here in November.

Toyota announced their updated Prius Prime last week. While its 22 miles of electric range is a big improvement over the previous Prius plug-in it falls short of the competition. From laggard to meh–is Toyota becoming a has been? Not likely. Both the Toyota and Prius badges carry a lot of value for consumers. And besides, it’s got a huge touchscreen.

McLaren, Ferrari, Renault, Fiat, and Honda have considerable experience with hybrids in Formula One and production cars like the McLaren P1 and Ferrari LeFerrari. They are also involved in the new Formula-E electric GP series. More to come? Likely. They can’t continue to lose sales to Tesla so may have to skip PHEVs and focus on full battery electric vehicles.

Does VW matter? I don’t know anyone who would purchase a car from a company that so overtly lied to it’s customers and governments around the world. Will they redeem themselves with electric vehicles?

Who’s Buying?

The first wave of electric vehicle purchasers, the early adopters, have been an interesting mix of folks who are more environmentally conscious (or want to appear so), techy geeky, and those who are into high performance cars (yes, Ferrari and Lamborghini have lost sales to Tesla).

Electric vehicles are now moving from the early adopter stage into the early majority stage as average people begin buy them for benefits such as their being quieter and smoother, not having to pump gas or take time to do so, less maintenance, lower operating costs, and concerns about the resale values of ICE cars.

For operating costs an electric mile costs about $0.12 less than a gas mile[3]. Assuming a PHEV owner drives 12,000 miles per year on electric and the rest on gas this is about $1,500 savings just in fuel and oil. Add in maintenance savings and we’re talking real money.

Tomorrow, a look at the change over from ICE to EV and a stab at some predictions.

[1] There are three PHEV architectures; Series where the drive system is all electric and the gas engine is used to recharge the batteries, Parallel where the electric motor and gas engine both provide propulsion, and Series/Parallel that has a bit of both.

[2] Cadillac (GM) and Toyota (and Lexus) have stated that they believe that Hydrogen Fuel Cell (HFC) vehicles are the future and that variations of electric are only an interim step to that. HFC have a steep road ahead though as costs and risks are still considerable.

[3] An electric mile is about $0.03 for electricity. A gas mile at $1.76 per gallon is $0.12 to $0.22 for fuel and oil. This assumes that tires, maintenance, and insurance will be about the same for each. Realistically maintenance is expected to be considerably less for electric.

 

Related:

Electric and Autonomous Cars Are Not A Panacea

 

Upstream Impacts of Electric Vehicles Depend on Kicking Coal

Getting A Handle On E-Bikes

Cover Photo: RoadsideArchitecture.com


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8 Responses to Gas Stations: Will They Survive The Rise of Plug-in Hybrids?

  1. Monte Castleman
    Monte Castleman March 30, 2016 at 10:33 am #

    I am a fan of plug-in hybrids, since they combine the best elements of electric cars- pure electric operation for everyday trips in the metro, with the best elements of gasoline cars- unlimited range using existing infrastructure for road trips. This in the space of one car so you only need one in your garage, at the complexity somewhat less than two cars. So it perplexes me that the US market has greeted them with yawns, and there’s no model I’m aware of available used, much less new, that can replace a larger vehicle like the Jeep Grand Cherokee I drive.

    Also as I side note I see new-fangled touchscreens as a bug an not a feature. Trying to go into a menu system on a touchscreen to change the radio volume or blower speed is a lot more distracting the twisting a physical knob.

    • Walker Angell
      Walker Angell March 31, 2016 at 9:11 am #

      I think we’ll see a lot more PHEV options in the next year or two. Carlos Ghosn who is CEO of Fiat (who owns Jeep) has said that their future is BEV. OTOH they have announced the Chrysler Pacifica PHEV so there will be some PHEV’s in their lineup. I’d think the Grand Cherokee a good PHEV option for them. We’ll see.

      • mplsjaromir April 1, 2016 at 8:26 am #

        Carlos Ghosn is the CEO of Renault-Nissan. Sergio Marchionne is the CEO of FCA.

  2. John March 31, 2016 at 8:32 am #

    In Ann Arbor on State St there is a gas station with a plug in area so maybe they might want to think of that

    • Walker Angell
      Walker Angell March 31, 2016 at 9:04 am #

      Possibly, though I don’t know that there’s any need for that. Most PEV owners charge while they’re doing something else. About 80% of charging is done overnight at home, another bit is done at work, malls and restaurants that have chargers (that are becoming much more common), and the rest at superchargers on longer trips.

  3. Mary G. March 31, 2016 at 12:41 pm #

    I recently considered a 2015 Chevy Volt used car as a replacement for my unfortunately totaled Chevy HHR. I really liked everything I read about the car online from both partial and impartial reviewers. Two things prevented me: 1) the replacement cost of the batteries should they need replacing and 2) the touchscreen/capacitive controls – for whatever reason, my fingers are so non-capacitive, I’ve often wanted to throw my smartphone at the wall (but got a stylus instead). The 2016 Chevy Volt has moved away from capacitive buttons to regular buttons so that sounds like a good improvement.

    But what about the battery replacement costs. Isn’t that something to be concerned about?

  4. GlowBoy April 4, 2016 at 12:16 pm #

    Whether the battery replacement cost matters much will depend on their failure rate. Consumer Reports recently said that as many as 30% of Honda Civic Hybrids experience battery pack failure by the time they’re six years old. The rate for 12 year old Priuses is only 2%. There’s been a lot of speculation that the battery management software may be to blame, since Honda’s Insight seems to have had far fewer problems than the Civic Hybrid.

    How will the Volt fare? Too new, so hard to say. As with a BEV, you’re taking a chance as an early adopter. The payoff, of course (as has proven the case with the Prius) can be fantastic resale value and very low maintenance costs.

    I agree about the touch screens. Operating them takes your eyes off the road several times longer than physical buttons that let you use your sense of touch to find the right spot to press, and I think driver-operated touchscreens should be banned from vehicles. I’m not likely to get my wish.

    • GlowBoy April 4, 2016 at 12:17 pm #

      And I should add that a PHEV, having a larger and more sophisticated battery pack, is likely to cost you a lot more than a plain hybrid if the pack needs replacing. As it is, the Civic Hybrid’s pack runs about $3k.