Hey, let’s spend millions to save $116,000!
posted at 11:18 am on May 25, 2011 by Ed Morrissey
Great news! The federal government has figured out how to save $116,000 per year … and it only costs $4 million to do it! As Blue Collar Todd notes in his analysis, the pilot program in San Diego and four other American cities will take no more than, oh, 39 years for the savings to pay back the cost of the vehicles:
San Diego will be one of five cities in which the federal workers will test plug-in cars for government use.
It will put 13 Volts and four Leafs with San Diego workers, and will also install charging stations to serve them. The cars will go to workers with the Navy, the Marine Corps, Veterans Affiars and the Department of Transportation. …
The purchases announced Tuesday are expected to cut gas usage by almost 29,000 gallons a year, saving taxpayer an estimated $116,000 and reducing greenhouse gas emissions by 257 metric tons, said GSA administrator Martha Johnson.
Todd gives the financial analysis a whirl:
101 Vots at $38,500 equals $3,888,500. Add to that 10 Leafs costing $33,000 and you get $4,218,500. Now add 5 EV’s at 32,500 and the grand total is $4,508,500. At a savings of only $116,000 a year in gas it would take 39 years to offset the costs of the cars. How much sense does that make? The battery life of these cars does not last more than ten years the last time I checked so the costs of buying new “green” cars will never be offset.
Let’s give the government the benefit of the doubt on this one and assume that they would need to buy new subcompact sedans in the same numbers as in this program. They could have bought the Ford Focus, a four-door sedan that gets decent gas mileage, for an MSRP of $16,500 — more than $20,000 cheaper than the Volt. Put across 101 vehicles, that comes to an excess expenditure of $2.02 million. (One could assume that the government will get fleet discounts, but that’s true of both vehicle types.) So that still doesn’t add up to a real cost-benefit payoff for taxpayers. At the rate of $116,000 per year, it would still take over 17 years to break even on the investment.
But wait, some might say; at least the car would improve the environment by lowering emissions! Well, maybe, but that depends on the source of the electricity used to recharge the batteries. California already has to buy a significant amount of its electricity from out-of-state sources, and adding cars to the grid will increase demand, prices, and the need to either build more plants in California or somewhere else. And what will those sites use for energy sources? Unless they’re building nuclear reactors, it will almost certainly be fossil fuel plants. Since most small internal-combustion engines perform more efficiently than those power plants, the actual level of reduced emissions will likely be negligible.
And let’s not even get started on battery disposal at the end of the life cycle. Suffice it to say that we’re going to need big landfill space under current technology, which isn’t a boon to the environment.
If the government really wants to save money and emissions through its fleet policies, the best way to do that would be to start cutting the size of bureaucracies. That way, they won’t need these cars in the first place, and we can save the millions of dollars up front without overextending demand on the power grid.