Low Cost Electric Vehicles : Throw Away EV Business Model Analysis
The price of electric vehicles in the past five years has decreased 20% annually on-average, making EVs more affordable to a wide range of buyers. In fact, a number of new low cost electric vehicle models are coming on the market in 2024 at under $20,000 including Nissan Leaf, Hyundai Kona EV, Honda N Van, Nissan Sakura, Tata Tiago EV and Mitsubishi eK X EV. The drop in prices adds pressure on high-end electric automobile manufactures such as Tesla, BMW and Mercedes; particularly as EVs are increasingly viewed as local commuter vehicles only, due to lack of infrastructure, long refuel times and short battery life expense.
Based on our analysis and EV product features, we believe the optimal business model to sustain a long-term profitable EV company without any government subsidies, best suits a low cost EV that's sold for about $12,000 at 25% profit margin. This means the vehicle must be manufactured at a cost of no more than $8,500. While the electric vehicle reduces maintenance up to 40% versus gasoline auto in the first 8 years, it does require the costly subsequent complete EV battery replacement at a price of $5,000 to $15,000 which supports a "throw-away EV" business model similar to other electronics like flat screen TVs.
Auto manufacturers like Tata India, Honda, Toyota, GM, Hyundai, Volkswagen and Nissan save up to 80% in costs now using robots and automation in factories. Our analysis shows in Japan, for example, robots are used in about 80% of car manufacturing factories. In Germany, the percentage is about 70%. In the United States, the percentage is about 50%.
The most common tasks performed by robots in automobile manufacturing include:
Welding body panels
Assembling parts
Painting cars
Quality control
Material handling
Packaging
Robots are used in automobile manufacturing because they can perform these tasks quickly, accurately, and consistently working 24/7 with no need for breaks. They can also work in dangerous or hazardous environments. And the use of robots in automobile manufacturing is expected to continue to grow in the future. This is due to the increasing demand for cars, the need to reduce costs, and the need to improve quality. We expect the use of AI robot, sensors, and automation to grow 30% annually 2023 - 2032 writes James Dean, Director SCS.
Further, reducing pollution in the environment we stress a need to create a smarter market to recycle and/or mitigate any toxic waste as a result of electronics including electric vehicles.
In fact, the process to mine rare Earth metals and produce a high-end EV 75KWh EV battery pack adds significant CO2 pollution to the environment. So, the race to decarbonize electric vehicle batteries is vitally important to EVs truly becoming a viable "clean energy" mode of transportation, while solar and green hydrogen offer smaller overall carbon CO2 footprints.
For example, the carbon footprint of a solar panel is around 50 grams of CO2 per kilowatt-hour (kWh) of electricity generated. The carbon footprint of an electric car battery is about 70 to 100 kilograms of CO2 per kilowatt-hour (kWh) of battery capacity.
Today's battery makers should focus R&D on four key areas to reduce CO2 pollution;
Mining and refining
Active Materials Production
Components and Logistics
Battery Manufacturing
And note that green hydrogen now derived at $1.5 kilogram from seawater using clean energy solar, wind and ocean wave power in the production process is a key CO2 reduction advantage offered by hydrogen fuel cell vehicles ... versus the EVs using a battery pack that's derived by tons of CO2 pollution in rare Earth metals and Lithium mining processes.
A more comprehensive truly CO2 free production process, EV infrastructure and end-of-life recycling and/or disposal of toxic EV waste solutions. And our EV market analysis shows the optimal business model to sustain long-term profitability is a low cost $12,000 auto that is essentially replaced i.e. thrown-away and recycled using an environmentally friendly non-toxic process, thus avoiding the need by the owner to replace a very expensive Lithium battery pack. Subsequently, the consumer simply buys a new electric car at a cost of about $12,000 used for local commuting only to be recharged overnight in the owners home garage or parking lot area writes James Dean, Director SCS. And the low cost EV business model fulfills 70% of commuter needs which we know is going back-and-forth to work daily, and recharging their EV overnight in the garage or parking area.
The high-end expensive EV with a short battery life like a Tesla requires expensive battery replacement of $10,000 to $20,000 which is not a business model that could reach much beyond 15% of the total auto sales market, due to several challenges. Annually 68 million automobiles are sold worldwide, so given 15% market share that's 10.2 million EVs is the likely saturation point for high cost electric cars to be shared by Tesla, BMW, Mercedes and the like. While a low cost "throw away" EV business model serves the daily need of over 70% auto consumers that are on a limited budget, do not want maintenance and battery costs.
A number of factors limit the electric vehicle market including;
Lengthy recharge time 45-minutes for 80% charge at Level 3 stations to be built
Earth's total viable Lithium reserves 88 million tons simply not enough to supply eight billion people in the world with automobiles. A single EV uses on-average 18 LBS to 138 LBS of Lithium per battery and far more in electric trucks that haul commercial goods. For example, a Tesla Semi truck battery alone weighs 28,000 LBS with huge friction on the roads and very expensive tire replacement challenges.
EVs require very expensive Lithium battery replacement within eight years, a cost to consumer of $5,000 to $15,000 per battery, so with two EVs in household that's $20k
EV tires wear out twice as fast due to friction and double the cost due to tire materials
EVs use significant amounts of rare Earth metals which are not plentiful and primarily 90% are produced in adversarial countries like, China, Russia, and parts of Africa.
The weight of EV battery is 10 to 20 times the weight, compared to green hydrogen fuel cell vehicles like Toyota Mirai which refuels 100% in six minutes or less at the pump with 300 to 400 mile range. Further, green hydrogen is now derived from seawater using solar, ocean wave and wind power which can be sold now between $1.80 and $1 at the pump station for consumers to refuel quickly in similar stations.
EV infrastructure is lacking. For example, the United States would have to build one million Level 3 Recharging stations at a cost of $100 Billion requiring ten years to complete. Although, a low cost EV like Honda N Box makes sense for local travel.
The production of electronics and electric auto battery packs creates significantly more carbon pollution (CO2) in the environment, therefore a better process is needed.
The coming availability of low cost EVs is good news for the consumers. And EVs produce zero emissions, which can help to reduce air pollution and greenhouse gas emissions. They are also more efficient than gasoline-powered cars saving drivers money on gasoline costs.
Here are some of the lowest cost electric vehicles on the market:
2024 Honda N Van EV ... about 115 mile range great for local commute
Tate Tiago EV ... about 120 mile range great for local commute
Nissan Sakura ... great local commuter car daily to and from work, local tasks
Mitsubishi eK X EV ... about 115 mile range great for local commute
Nissan Leaf: The Nissan Leaf is one of the most popular electric cars on the market. The Leaf has a driving range of up to 226 miles on a single charge.
Chevrolet Bolt EV: The Chevrolet Bolt EV is another popular electric car. The Bolt EV has a driving range of up to 259 miles on a single charge.
Hyundai Kona Electric: The Hyundai Kona Electric is a small SUV that is also available as an electric car. The Kona Electric has a driving range of up to 258 miles on a single charge.
Mini Cooper SE: The Mini Cooper SE is a small hatchback that is also available as an electric car. The Mini Cooper SE has a driving range of up to 114 miles on a single charge.
Fiat 500e: The Fiat 500e is a small city car that is also available as an electric car. The Fiat 500e has a driving range of up to 118 miles on a single charge.
These are just a few of the many low cost electric vehicles that are available on the market. As the technology continues to improve and more EVs are produced, we can expect to see even more affordable options in the years to come manufactured using efficient robot automation.
In addition to the lower purchase price, there are other financial benefits to owning an electric vehicle.
Federal tax credit: The U.S. government offers a tax credit of up to $7,500 for the purchase of an electric vehicle, but artificial subsidies are not sustainable long-term.
State and local incentives: Many states and local governments offer incentives for the purchase of EVs, such as rebates, tax credits, and free parking.
Lower operating costs: EVs have lower operating costs than gasoline-powered cars. They don't require oil changes or tune-ups, and the electricity to power them is typically much cheaper than gasoline.
If you are considering buying an electric vehicle, there are a few things you should keep in mind:
The driving range: The driving range of an EV is the distance it can travel on a single charge. This is important to consider if you have a long commute or if you plan on doing a lot of road trips. But 70% of commuter needs are met with low cost EVs.
The charging infrastructure: The availability of charging stations is another important consideration. Make sure there are enough charging stations in your area to meet your needs.
The climate: If you live in a cold climate, you will need to factor in the impact of the cold weather on the driving range of your EV.
We believe analysis supports a low cost "throw away" electric vehicle business model is sustainable and fulfills most buyer needs for a daily commute auto. The EV offers a number of potential environmental benefits, and we calculate it being sold at the $12,000 price range.
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