Charging - Follow the money

Electric Vehicles are just great, they can get you around and they can charge up using (ideally) sustainable electricity. But how much would such a charge have to cost? Now, but also in the future. Comparing to fuel, there is a price per litre/gallon that determines how much you have to pay at the gas station. The price of fuel changes according to availability, the news, but also from the location you get it from. Fuel in your neighbourhood can differ from fuel (from the same supplier mind) at the highway. Sometimes these differences are small, but there is a difference.

 

How would that be with electricity? The obvious unit to measure how much power you filled your battery with is the kWh. The price for electricity is also conveniently linked to this unit and it is a measure of how much power is used/consumed/charged over a period of time. Here in the Netherlands there is a difference in price on your electricity depending on your supplier. It also depends on how much you use, the price for small consumers (normal households) is different than from large industrial users. Currently driving electric is very cheap when compared to normal fuel for a similar trip. But how might this develop over time?

There are a few factors that would help increase the price of electricity in the (near?) future. One would be the shortage of carbon based fuels, which would drive up the price for coal for example, which in turn would increase the price of the electricity that is produced with it. Another mechanism that might come into play is taxes. Currently a lot of countries have added tax to fuel, in the Netherlands for example a large part of the price you pay at the gas station is pure taxes. If more people would go to drive electric, they would eventually miss a substantial amount of income. The easiest step to maintain their level of tax-income, would be to add more tax to electricity instead.

 

Also there are a few factors that would help decrease the price of electricity. The main and biggest factor in this I think will be sustainable energy; for example wind and solar power. With the development of these technologies and others, more and more people can become energy suppliers. That may not be a significant amount now, but with the prices of such equipment dropping and even more alternatives opening up over time, it will be very likely that a household will produce its own power in the future. If this will be the case, electricity can be acquired ‘everywhere’ and there might be plenty to go by. As a result this can potentially make electricity even cheaper than it is already today.

 

For the future all these forces will apply, and more. Which forces will have the biggest impact in the end, or which one will dominate? I’m inclined to think that electricity will remain fairly cheap in our future and that driving an electric vehicle will always remain cheaper than driving around on fuel, from a pure financial side. Add in the extra costs for the pollution caused by fuel cars and the odds get even better. Currently the purchasing price of an electric vehicle is higher than their fuel equivalents, but as the popularity of these vehicles will increase and more of them will get manufactured, prices are bound to go down on the cars.

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