The latest electric vehicle (EV) or plug-in hybrid EV (PHEV) announcements from Detroit deliver good and bad news.  While the Chevy Volt may not actually give the average driver 230 miles per gallon, it is certainly much better than the current fleet.  I’m pleased with that news.  However, recent announcements that GM and other manufacturers – traditional and new – are introducing electric SUVs makes me question if they learned anything from the recent bankruptcy debacle. 

There seems to be this shared fantasy amongst car companies and industry watchers that since the cost of electric charging will be less than the cost of gas tank refills, these SUVS are “economical” options for consumers.   Well guess what.  Unless you can fully rely on electricity generation through your personal microgrid, sooner or later you will be buying electricity from a utility or an electric charging station, and it is going to cost you money and time. 

Even with Time-of-Use (TOU) pricing and software to program a car to only charge when electricity is cheapest, charging fees will still add up.  At the recent National Association of Regulatory Utility Commissioners (NARUC ) summer session, discussions about electricity prices had a recurring theme – in the future, electricity will cost more in every region of the USA. 

There is also a set of unspoken assumptions made about the drivers of electric vehicles that don’t model real life.  Apparently, EV drivers have no social life because once they are home every evening after work, they won’t drive again until it’s time for that morning work commute.  EV drivers are also assumed to be exceptionally well-organized and always charge their vehicles when the rates are cheapest – model citizens of rational behavior.    

And finally, cars are still seen as consuming electricity, but not as storage devices that could actually sell electricity too.  An electricity-sipping vehicle might possibly make more money for its owner than an electricity-guzzling vehicle, but Smart Grid infrastructure and regulatory policies must be deployed to support full bi-directional electricity flow

We desperately need a new way of thinking about electric vehicles.  A good start would be with new standard metrics.  Using miles per gallon won’t tell the full story of an EV car’s energy costs and potential profits.  What are the miles per kilowatthour (KWh)?  This metric is like mpg – and consumers can determine their costs based on energy prices in their region.  What is the potential amount of KWh that a consumer can negotiate to sell back to a building or utility and still make it to their destination and/or cheapest charging option?  

We also need new market models.  Wouldn’t it be fantastic if you drove a car off a lot, and instead of it instantly losing a couple thousand dollars in value, it was going to earn you money as an energy storage device?  Software that projects these potential earnings could help justify the purchase of an EV, but it needs to be independent of the car manufacturer to be considered credible.   

The bottom line is that real energy economy comes from smaller EV vehicles, not electric SUV behemoths similar to the ones that currently roam our highways and suburban roads.  Exchanging one form of energy guzzling for another isn’t smart and any car manufacturer that bets its product line on electricity guzzlers will be looking for another taxpayer bailout in a few years.  We can’t afford to continue using today’s market models for EVs either.  If consumers have options to make money from the EVs as electric storage devices that can sell electricity during peak demands, they’ll embrace the technology.

I’ll be at the Green Software Unconference on Wednesday, August 19th in Mountain View, CA to facilitate discussions about the Smart Grid.  Join me there to continue this conversation.