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**Branchez-Vous Indicators:**

A new way to compare vehicles

**Acquisition overcost**

**NET acquisition overcost**

**Operating costs of the vehicle**

**Energy cost per kilometre**

**Maintenance cost per kilometre**

**Operating cost per kilometre**

**The equivalency point**

**Cumulative savings at 200 000 km**

**COMPARING**

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February 14, 2017

A new way to compare vehicles

*For easier reading, download PDF printable version.*

The Innovative Vehicle Institute (IVI) recently published its 2017 edition of the Branchez-Vous brochure, which includes an information card on each plug-in vehicle offered in Québec. In addition to the usual basic data such as battery size and efficiency, the cards include two Branchez-Vous indicators: **Price equivalency point** and **Cumulative savings at 200,000km**. The calculation of these indicators is summarized in the section “Branchez-Vous 2017 Estimate: cost of a plug-in vehicle” (on pages 18 and 19 of the brochure). The objective of these indicators is to help compare the acquisition and operating costs of a plug-in vehicle with that of a comparable gasoline model.

The first indicator, the price equivalency point, expresses the mileage at which a plug-in vehicle’s net acquisition overcost will be “canceled” through savings on operating costs. Then, once the equivalency point is reached, the motorist still saves money with every kilometre and the second indicator then expresses, as its name indicates, total cumulative savings at 200,000 km. To obtain these two numbers, some preliminary calculations are necessary and are explained step by step in the following paragraphs using a fictitious example. At the end of the exercise, a summary table and chart show the data and calculations.

** **

Electric vehicle technology is relatively new and the market is still young in terms of sales volumes. The price gap is narrowing with model maturity and increasing sales. For this calculation, the IVI estimates the overcost^{1} of a plug-in vehicle at 25% or, for models with a battery of 60 kWh and more, 30% of the price of a comparable gasoline model^{2}.

**EXAMPLE:
**A $ 42,000 plug-in vehicle (battery of over 60 kWh) will be compared to a $ 32,308 gasoline vehicle, resulting in an “overcost” of $ 9,692 (30%).

NOTES

- An overcost of 25% or 30% is a general estimate used to facilitate comparisons between vehicles. Depending on models and options, the gap may be smaller or greater.
- Standard versions of plug-in vehicles are sold with several equipment that are more often offered only as options in gasoline vehicles. Air conditioning and heated seats are examples of equipment included in the basic version of several plug-in vehicles. The
*comparable*gasoline vehicle will thus include options so the price used for the comparison does not correspond to a base version.

The Gouvernement du Québec’s incentive program grants a rebate of up to $ 8,000 (depending on battery size). This amount being applied after taxes, about 15% must be deducted. We then get $ 6,800 to subtract from the overcost.

**EXAMPLE:
**Let’s continue with the data from the example: a $ 9,692 overcost minus a net rebate of $ 6,800 results in a net overcost of $ 2,892.

** **

To assess a vehicle’s cost, a motorist obviously takes into account the monthly installments but often neglects costs related to fuel and maintenance, that is to say operating costs. This is where a plug-in vehicle offers a significant advantage. Thus, despite a higher acquisition cost compared to a gasoline model, a plug-in vehicle allows for several thousand dollars in savings over the years.

To calculate operating costs, the IVI took into account the energy source of both vehicles (electricity and/or gasoline) as well as basic maintenance for oil and brakes^{3}.

NOTE

- To simplify the exercise, other operating and maintenance costs are considered equal and certain costs specific to gasoline vehicles, such as exhaust muffler or spark plug replacement costs, are not calculated. This simplification yields conservative results since it underestimates the maintenance cost of gasoline vehicles.

** **

The cost of electricity or fuel depends on a vehicle’s efficiency. A gasoline vehicle’s efficiency is expressed in litres/100km while that of an electric vehicle is expressed in kWh/100km. Energy consumption per kilometre is obtained by dividing the efficiency rating by 100. Then, we multiply this number by the cost per unit of energy (kWh or litre) to obtain energy cost per kilometre.

**EXAMPLE:
**For the present demonstration, the electric vehicle’s efficiency is 19 kWh/100km (0.19 kWh/km) and the comparable gasoline vehicle’s efficiency

NOTES

- For the comparable gasoline vehicle’s efficiency, the IVI uses a low average of the efficiency of vehicles of the same category as the electric vehicle studied. In this example, the category is compact vehicle.
- Cost of electricity = $ 0.10/kWh (source: Hydro-Québec). Cost of gasoline = $ 1.10/L.

As mentioned above, the two parameters used for maintenance costs are oil and brakes. In the case of an all-electric vehicle, there is no oil to change. For a gasoline vehicle, the IVI considered an oil change every 10,000 km at a cost of $ 60. As for brakes, the calculation takes into account a replacement every 50,000 km for a gasoline vehicle and every 120,000 km for an electric vehicle^{6}. In both cases, average cost is $ 500.

NOTES

- The electric car has an “energy regeneration” technology that slows down the vehicle without using the brakes. It is a sort of engine brake that the motorist activates by slightly lifting the foot from the accelerator. Thus, an electric vehicle’s brakes wear out much less quickly and can last 2 to 3 times longer.

**EXAMPLE:
**For the electric vehicle, oil costs $ 0 and brakes cost $ 500/120,000km ($ 0.0042/km). The gasoline vehicle on the other hand, costs $ 60/10,000km ($ 0.0060/km) for oil and $ 500/50,000km ($ 0.0100/km) for brakes.

** **

The operating cost per kilometre is obtained by adding up energy cost, oil cost and brake cost.

**EXAMPLE:
**The electric vehicle used in our example costs $ 0.0232/km to operate and the gasoline vehicle costs $ 0.0985/km, which is over four times more.

The gap between the operating cost of an electric vehicle and that of a gasoline vehicle informs us of the savings made with every kilometre traveled with the electric vehicle. At first, savings per kilometre serve to “cancel” the net overcost of the vehicle, up to the equivalency point. At this point (number of kilometres), the cost of the electric vehicle is considered equal to the cost of the gasoline vehicle.

**EXAMPLE:
**Our electric vehicle has a net overcost of $ 2,892. With a saving rate of $ 0.0753/km, this amount will be “canceled-out” at 38,393 km, meaning less than two years for a motorist who travels 20,000 km per year.

** **

Once the net overcost is canceled, the savings continue to accumulate. To calculate the cumulative savings at 200,000 km, we must first subtract the number of kilometres of the equivalency point and then multiply the result by the savings per kilometre.

**EXAMPLE:
**The equivalency point being 38 393 km, there remains 161 607 km to go to reach 200 000 km while saving 0.0753 $/km. The cumulative savings (161,607 km X $ 0.0753/km) will therefore be $ 12,174.

** **

Since the analysis takes into account energy efficiency and retail price, by applying these calculations uniformly to different models offered, it is possible not only to compare each model to a similar gasoline one, but also to compare plug-in vehicles to each other. See all-electric vehicle data cards on pages 20 to 23 of the 2017 Branchez-Vous brochure to compare the Branchez-Vous indicators for each vehicle. Plug-in hybrids are shown on pages 29 to 34. Calculations for plug-in hybrids will be the focus of another article shortly.

For those who would like to have fun with the data, follow this link to our spread sheet (for an all-electric vehicle).

**SUMMARY TABLE OF THE EXAMPLE USED IN THE ABOVE TEXT**

**GRAPHIC SHOWING NET OVERCOST, EQUIVALENCY POINT AND CUMULATIVE SAVINGS**

SOURCE : Innovative Vehicle Institut, project Branhez-Vous

*For easier reading, download PDF printable version.*