A better calculation of overall cost of ownership would be to detail (at "Time 0") the purchase price of each type, then for each year ( "Time 1 to x") the annual costs for that year. If battery pack replacement happens every 5 years, then you would show the full cost in year 5 and 10, but not amortize it each year. Then at the end of your ownership ("time 14"?) you would estimate a resale value for each vehicle. Finally, you would compute a "Net Present Value" (NPV) for each series of cash flow fro time 0 to time 10 (for example). The least negative or most positive result "wins."
The NPV function is part of Microsoft Office Excel's function kit and is somewhat explained in their help (F1) files. Simply put, the NPV is a way of computing interest paid or income foregone - the time value of money. For example, if a battery pack lasts 5 years, you have the use of the money for 4 years, then pay it all in year 5. So if you simply amortize the cost of the pack over 5 years, you are "charging" yourself interest and principal on money your didn't really spend. The most obvious example of NPV used in our everyday lives is to answer the question "Would you like 10 dollars cash today or 10 dollars cash a year from now?" We (rational folks) all pick "now." $10 a year from now isn't worth $10 toady because we could put that $10 today in the bank and get interest for a year. At the end of the year, the "now" choice might be worth $10.50. But the "later" choice would only get us $10, so we consciously or unconsciously perform an NPV calculation and pick the more worthy solution. That's all NPV does - compute the cost or benefits of the timing of cash flows. So pick an interest rate that is your alternative investment income rate or borrowing rate and discount all the inflows and outflow of vehicle ownership back to the present. This will give you the most accurate way of looking at overall vehicle (or any project for that matter) cost.
I just did such an analysis for installing a very expensive "hybrid" battery-generator residential electric system (compared to a full time generator of the same size) in my off-grid house, and with diesel fuel at $2.00, the payback period was 5 years. With diesel at $3.00 payback is much quicker. And according to my NPV calculations, if fuel reaches $5.00 per gallon, I should add enough solar to almost entirely replace the generator. The same model, by the way, indicates that I could never pay back the costs of setting poles or burying electric cable from the nearest utility line, even assuming price per Kw never went up.
Please excuse my little "rant", but I get a bit crazy about incomplete models that may easily lead to incorrect conclusions. The "real" cost of owning any vehicle is not only the annual operating costs, but also the purchase and resale costs and income - in other words the OVERALL costs. In addition, each persons finances and ownership objectives may make the answers come out differently for each person.
At 08:33 AM 9/8/2005, steves wrote:
Thanks for the link! For a garden tractor it may be easier to enter values in terms of hours and /hour rather than miles and /mile. I reran the example I did last night, assuming 3 hour mow time, and it comes up with very similiar results.- SteveS James Jarrett wrote:I have a web page that will do it for you. It was written by me to compare Electric cars with Gasoline, but should give you a good idea. http://www.ccds.charlotte.nc.us/~jarrett/EV/cost.php Enjoy, James_______________________________________________ Elec-trak mailing list Elec-trak cosmos phy tufts edu https://cosmos.phy.tufts.edu/mailman/listinfo/elec-trak