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.

The General Services Administration said Tuesday it plans to buy 116 plug-in electric vehicles, including 101 Chevrolet Volts and 10 Nissan Leafs.

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.


Related Posts:

Breaking on Hot Air

Blowback

Note from Hot Air management: This section is for comments from Hot Air's community of registered readers. Please don't assume that Hot Air management agrees with or otherwise endorses any particular comment just because we let it stand. A reminder: Anyone who fails to comply with our terms of use may lose their posting privilege.

Trackbacks/Pings

Trackback URL

Comments

Last I heard, you can’t get somethin from nothin…

right2bright on May 25, 2011 at 11:20 AM

Why not, they spent a trillion bucks and got literally nothing for it; this is chump change in comparison.

Bishop on May 25, 2011 at 11:21 AM

I CANNOT see a Marine driving a Nissan Leaf. That image is impossible to visualize.

Meric1837 on May 25, 2011 at 11:23 AM

Our state can save on green house gases if we buy electric from out of state. The Green dragon is expensive and retarded.

seven on May 25, 2011 at 11:24 AM

I CANNOT see a Marine driving a Nissan Leaf. That image is impossible to visualize.

Meric1837 on May 25, 2011 at 11:23 AM

Civilians and assigned sailors ONLY.

Marines will DOUBLE TIME! Ahh-OOORAH!

Roy Rogers on May 25, 2011 at 11:25 AM

Since math is one of the weakest performance subjects in our public schools I guess the people at the GSA are right on par.

docflash on May 25, 2011 at 11:27 AM

“GUZZLE MONEY – NOT GAS!”

Shy Guy on May 25, 2011 at 11:28 AM

Great news! The federal government has figured out how to save $116,000 per year … and it only costs $4 million to do it!

Perfect metaphor for this idiotic regime.

So any of our moronic lefty trolls going to defend this?

rbj on May 25, 2011 at 11:29 AM

Ed: The numbers are actually off. When you calculate the time value of money into this (and let’s assume a 15% MARR), the NPV of this savings over 50 years is at a negative $3.14M.

This will never break even from a financial perspective.

Scott H on May 25, 2011 at 11:29 AM

bendin’ over a dollar to pick up a dime.

smart power

ted c on May 25, 2011 at 11:30 AM

These guys don’t know how to do liberal math. Yes it would take 39 years to pay it back with current gas prices. But if you double gas prices it will only take 19 plus think of all the extra revenue we get from increasing the gas taxes. hell if we quadruple gas prices the things are practically free.
This plan is full of win.

Rocks on May 25, 2011 at 11:31 AM

Ryans fault!

golfmann on May 25, 2011 at 11:31 AM

So any of our moronic lefty trolls going to defend this?

rbj on May 25, 2011 at 11:29 AM

Math and science are not taught in liberal arts schools.

Hooked on Phonics is

Roy Rogers on May 25, 2011 at 11:31 AM

Looking at this a bit more, and going out to 20 years…

Using a 15% MARR, they are spending $510K a year (for 20 years) to reduce gas consumption by 29,000 gallons (estimated) annually.

That comes to spending $17.60 per gallon of gas saved.

Why not just buy the gas at the going rate for much cheaper and stockpile it?

Scott H on May 25, 2011 at 11:35 AM

1) Buy bureaucrats energy efficient electric vehicles to drive around in;
2) Buy bureaucrats cost effective gas guzzling vehicles to drive around in; or
3) Fire bureaucrats so no car at all is needed.

I pick three!!

tommylotto on May 25, 2011 at 11:35 AM

The math gets even worse if you include the installation cost of charging stations.

osogrande on May 25, 2011 at 11:35 AM

There’s a few things more messed up than this, and Kathy Griffins cratered face is one of them.

wheelgun on May 25, 2011 at 11:36 AM

“The purchases announced Tuesday are expected to cut gas usage by almost 29,000 gallons a year, saving taxpayer an estimated $116,000..”

Why not just allow one more lease in the gulf? You’d make up the 29,000 gallons and the $116,000 via royalties and it wouldn’t cost a dime to do it.

Golden Boy on May 25, 2011 at 11:37 AM

The payback period is only 39 years if you don’t take into account the time value of money.

Any economic decision that does not take that into account is worthless.

Scott H on May 25, 2011 at 11:38 AM

Social engineering with taxpayer money = Corruption.

Jaibones on May 25, 2011 at 11:40 AM

Interesting.. doesn’t this Volt order triple the orders to date???

Prop up car company with illegal efforts, launch an expensive car no one wants, subsidize the car from municipalities at a loss…

Odie1941 on May 25, 2011 at 11:41 AM

They tried that crap over 10 years ago in Los Angeles. I don’t know what happened to the program but I think like most green dreams, it was not feasible.

Blake on May 25, 2011 at 11:41 AM

Penny wise and pound foolish–zero’s current administration.

dragondrop on May 25, 2011 at 11:41 AM

The math gets even worse if you include the installation cost of charging stations.

osogrande on May 25, 2011 at 11:35 AM

Exactly. The cost of building those, by itself, probably adds several more million dollars to the cost of this silly boondoggle.

What a waste of taxpayer money.

AZCoyote on May 25, 2011 at 11:44 AM

There’s a few things more messed up than this, and Kathy Griffins cratered face is one of them.
wheelgun on May 25, 2011 at 11:36 AM

HAHAHAHAHAHAHA

Bishop on May 25, 2011 at 11:44 AM

Great news! The federal government has figured out how to save $116,000 per year … and it only costs $4 million to do it!

Oh yeah?

The $4 millions is not money out of their (gubmint burocrats) own pocket, it is just nameless/faceless money pile that is ‘always there’.

But the $116,000 per year guarantees a few Dem votes.

In other words, money well spent. Ed thinks the gubmint don’t do math, but I know they have calculated everything in their account book.

Sir Napsalot on May 25, 2011 at 11:45 AM

Limited range and you can’t just pop in and refuel in less than ten minutes and be on your way….

SouthernRoots on May 25, 2011 at 11:46 AM

The payback period is only 39 years if you don’t take into account the time value of money.

Any economic decision that does not take that into account is worthless.

Scott H on May 25, 2011 at 11:38 AM

Perhaps if one is in an economics class. Did Ed take into account the variables of possible alien contact and its impact on technology and the time value of our heretofore unknown cache of dilithium crystals? Well he should have. Otherwise any financial exposition is worthless. Nit-pickers…

39 years or 50 years – THE POINT IS THIS IS INSANE!

catmman on May 25, 2011 at 11:47 AM

tommylotto on May 25, 2011 at 11:35 AM

Assuming they are energy efficient to begin with. What’s the environmental cost of mining & processing the metals needed for the batteries?

rbj on May 25, 2011 at 11:47 AM

catmman: Perhaps you misunderstood. I was pointing out that the situation is even worse than it is stated in the post.

I am certainly not disagreeing with the overall position that this is ridiculous.

Scott H on May 25, 2011 at 11:50 AM

Obama finally figured out a way to sell some Chevy Volts. Buy them himself.

Of course, somewhere near all of these test cities, there will be hideous toxic dumps for the batteries for these plug-ins.

And local coal plants will have to work overtime providing power to these plug-in fleets.

hawksruleva on May 25, 2011 at 11:50 AM

Assuming they are energy efficient to begin with. What’s the environmental cost of mining & processing the metals needed for the batteries?

rbj on May 25, 2011 at 11:47 AM

Shut Up! That’s what!

catmman on May 25, 2011 at 11:50 AM

Will Obama buy and drive an electric car for use around Chicago after Jan 2013?

WashJeff on May 25, 2011 at 11:50 AM

The math gets even worse if you include the installation cost of charging stations.

osogrande on May 25, 2011 at 11:35 AM

True, but government fleets generally refuel at a central location, so they probably wouldn’t have to build lots of charging points around the city.

hawksruleva on May 25, 2011 at 11:51 AM

fleets generally refuel at a central location, so they probably wouldn’t have to build lots of charging points around the city.

hawksruleva on May 25, 2011 at 11:51 AM

That’s why fleet operators should switch to natural gas (assumming the conversion is cost effective).

And if they can add a cookout grill to the vehicle that would be an added bonus.

WashJeff on May 25, 2011 at 11:54 AM

How will they fit Michelle inside one of these things?

Roy Rogers on May 25, 2011 at 11:54 AM

Scott H on May 25, 2011 at 11:50 AM

When I see comments like the one you put up, I think of how a liberal argues.

A liberal would make the point you did: that the overall argument (or point), since the author didn’t take into account ALL of the minutia/variables – is irrelevant or somehow worthless. Doesn’t matter that the overall argument/point is actually fundamentally sound. We’ll attempt to discredit it around the margins if you will.

Not saying you’re a liberal or anything but that’s what I thought of reading your comments.

catmman on May 25, 2011 at 11:57 AM

How will they fit Michelle inside one of these things?
Roy Rogers on May 25, 2011 at 11:54 AM

Put a single extra large seat right in the middle, elongate the foot pedal area, and cut a hole in the roof.

Bishop on May 25, 2011 at 11:58 AM

Liberal math:

2 + 2 = Math doesn’t matter when we’re saving the Earth!

ZenDraken on May 25, 2011 at 11:59 AM

The General Services Administration said Tuesday it plans to buy 116 plug-in electric vehicles, including 101 Chevrolet Volts and 10 Nissan Leafs.

Nice ratio there. ‘Token’ Leafs.

Saw this coming…Cars built with tax payer money and then purchased with more tax payer money. This is just the beginning.

BigWyo on May 25, 2011 at 12:01 PM

Silliest administration evah.

How did we become such an effeminate country?

BuckeyeSam on May 25, 2011 at 12:03 PM

catmman: Think how you like. However, if you ever give a business case to someone and you ignore the time value of money, laughing you out of the room is the kindest response you can hope for.

The time value of money is not minutiae to economic analysis; it is the very core of it. Ignoring the time value of money in economic analysis is like trying to play football without a quarterback, or an offensive line.

And is the argument sound in this case? Yes, as I stated in my original post. However, if the numbers were different, it may not have been.

Right now, I’m looking at (among other jobs) getting a job with the federal government to do exactly the type of analysis I’ve done here. Would you prefer someone who did not understand the time value of money to do it?

Scott H on May 25, 2011 at 12:04 PM

Zen: Something I pointed out upthread is that, even if they want to save the Earth by doing this, a cheaper alternative would be to buy the gasoline at current prices and then refuse to let anyone use it.

Scott H on May 25, 2011 at 12:06 PM

Lessee here… A disappointing 928 sold so far. Sooooooo… GE buys a bunch. The gubmint buys a bunch. Chevy reports rosy sales. Winning!

stvnscott on May 25, 2011 at 12:06 PM

I’m wondernig about the $38,500 figure. Is that after the 7500.00 credit? Because if so, we need to figure that back in since it comes from the federal government anyway.

brainy435 on May 25, 2011 at 12:17 PM

I’m wondernig about the $38,500 figure. Is that after the 7500.00 credit? Because if so, we need to figure that back in since it comes from the federal government anyway.

brainy435 on May 25, 2011 at 12:17 PM

One has to assume they will at least receive fleet pricing.

stvnscott on May 25, 2011 at 12:23 PM

That’s OUR money they’re p*ssing away.

Do anything to unload those Gubmint Motors clown cars.

petefrt on May 25, 2011 at 12:23 PM

Scott H on May 25, 2011 at 12:04 PM

As I stated, this isn’t an economics class – it’s a blog.

If you want to delve into the depths of this stuff, fine. Knock yourself out.

You seem perfectly suited for a fed job.

catmman on May 25, 2011 at 12:29 PM

Put a single extra large seat right in the middle, elongate the foot pedal area, and cut a hole in the roof.

Bishop on May 25, 2011 at 11:58 AM

Will it run on lobster and wagyu beef?

Roy Rogers on May 25, 2011 at 12:30 PM

And since the electrics don’t have adequate range for distant training and overnight trips, airplane flights for affected employees will increase. Not only will these flights negate any perceived reduction in emissions, but they will increase actual emissions.
 
Awesome.

rogerb on May 25, 2011 at 12:42 PM

and will also install charging stations to serve them.

Didn’t check all the comments but has anyone mentioned the initial cost of building and maintaining these “charging stations”???? Where’s a charging station czar when you need ‘em?

Rovin on May 25, 2011 at 12:46 PM

Next feddle gummint mandate for cars: Automotive Black Boxes, Minus the Gray Area

slickwillie2001 on May 25, 2011 at 12:46 PM

So does anyone else get a vision of this becoming the biggest absolute time waster?
Whoever gets assigned these vehicles will plan their day around charging.
8am-start of work day
9am-wake up, showersh*tshave, breakfast
10am-decide whether to call out sick
11am-if working, head over to the charging station.
3pm- car finished charging. drive to office to confirm to supervisor that the car has finished charging and that they can now run over to sector 7 to check on the emergency.
4pm- time to go home.

It’ll be a game to see which Leaf gets to the charging station first each day while the other Leafs sit idly by.

smfic on May 25, 2011 at 12:47 PM

Plus… it’s more bailout for the Volt (GM).
-
Look for lots more of this.
-

RalphyBoy on May 25, 2011 at 12:56 PM

Y’all are forgetting a cost here:

On longer trips, the Leaf/Volt will need to charge for 8 hours before completing the trip. Don’t forget to add an increase in expensed hotel rooms.

Sekhmet on May 25, 2011 at 1:01 PM

Did anyone upthread mention that the $116,000 counts the cost of the gas @ $4 a gallon as 100% savings, but nowhere do they net out the cost of the electricity used to replace it?

HTL on May 25, 2011 at 1:14 PM

Yeah my question is do I get the $7500 credit for buying an electric motorcycle?(purchase price $8000)

Inquiring cheapskates want to know.

orbitalair on May 25, 2011 at 1:28 PM

Did anyone upthread mention that the $116,000 counts the cost of the gas @ $4 a gallon as 100% savings, but nowhere do they net out the cost of the electricity used to replace it?

HTL on May 25, 2011 at 1:14 PM

Perversely, the states where one is least likely to break even on an PHEV are the democratic states, because the democratic states have the highest electricity costs. Funny how that works.

slickwillie2001 on May 25, 2011 at 1:45 PM

This plan is full of win.

Rocks on May 25, 2011 at 11:31 AM

Your plan is similar to one I floated 30 years ago, re: poverty.

We all agree that poverty is a bad thing. According to the 2011 HHS Poverty Guidelines, Federal Register, Vol. 76, No. 13, January 20, 2011, pp. 3637-3638, the poverty level for a family of four averages out to be $25,333.00. That’s $22,350.00 for the 48 states, $27,940.00 for Alaska, and $25,710.00 for Hawaii. (Data for the “other seven states” was not included in this report.) So, rounding and using the figure of $25,500 as a target, assuming a 40 hour week translates to 2,000 hours of work per year, if we simply increase the minimum wage to $12.75 per hour, we will have eliminated poverty. And once we have eliminated poverty, we can also eliminate all the bureaucracies needed to assist the poor, thereby reducing significantly the size of Fedzilla.

SO THERE!

I have A Plan!

Vote Leprechaun! (not necessarily green, however.)

oldleprechaun on May 25, 2011 at 2:38 PM

not to be a stick the mud but the math should include what would have been spent on normal cars in lieu of green cars.

Kaptain Amerika on May 25, 2011 at 2:47 PM

Did anyone upthread mention that the $116,000 counts the cost of the gas @ $4 a gallon as 100% savings, but nowhere do they net out the cost of the electricity used to replace it?

HTL on May 25, 2011 at 1:14 PM

No and you beat me to it.

mdenis39 on May 25, 2011 at 3:08 PM

MAINTENANCE COSTS, The cost of maintenance of the vehicles and adding and also adding in the costs of replacing the vehicles within 10 years due to life cycle expiration due to depreciation and wear and tear puts the costs at triple that. This is not including factoring in inflation due to depreciation of the dollar with the next 10 years.

Egfrow on May 25, 2011 at 3:16 PM

two words:

Brain Dead

hoakie on May 25, 2011 at 3:49 PM

116 vehicles – - that’s like two for every state, plus DC .. amiright?

/.

CaveatEmpty on May 25, 2011 at 4:08 PM

They didn’t count the cost of the electricity used to recharge the batteries.

The heat of combustion of most hydrocarbons is about 19,000 Btu/lb, and since gasoline weighs about 6 lb/gallon, that comes to 114,000 Btu/gallon, or about 120 megajoules per gallon (1 Btu = 1055 joules). If 29,000 gallons of gasoline were saved, the total heat of combustion would be about 3.5 trillion joules, or about 970,000 kilowatthours (1 kwh = 3.6 megajoules).

If gasoline-powered cars are assumed to be 30% efficient, the energy delivered to the wheels would be about 290,000 kwh. Even if electric motors in the Volts were 100% efficient (they’re not!), at 10 cents per kwh it would cost $29,000 to recharge the cars. So, the net savings would be $116,000 – $29,000 = $87,000 per year, and the payback period for $4.5 million would be about 52 years.

Only the Government would “invest” in anything and wait half a century to be paid back…

Steve Z on May 25, 2011 at 4:36 PM

I just can’t help to think how dependent a plug in car makes us

they could shut us down any time they want

the good old gas engine does not require fed scum to operate

eff obama

Sonosam on May 25, 2011 at 5:46 PM

CARB admitted years ago that less than 15% of the air pollution in CA is from vehicle emissions. Of that 15%, more than 80% is from commercial trucks aren’t going to be going electric anytime soon.

In other words, less than 3% of California’s air pollution is from passenger vehicles. And the generation of electricity to run a battery-powered vehicle still produces pollution, so the reduction of pollution in California if you replaced every single automobile with an electric is insignificant.

Thanks for nothing.

Freelancer on May 25, 2011 at 8:35 PM

O.K. So please, someone, do the really hard math for me ‘cuz I just suck at chemistry or something. But if 29,000 gallons of gasoline weighs 8.5 pounds/gallons (I’m using the rough weight of a gallon of water here which should be high as gasoline is lower in density), then the savings would be 112.04 metric tons liquid weight. SO, how does this convert to 257 metric tons gaseous weight?

Yes, I know oxygen is burned/combined with carbon to make CO2, etc., but some of the burnt fuel becomes a solid, not a “greenhouse” gas.

Chime in Mr(s) Wizard..

Robert17 on May 25, 2011 at 8:56 PM

So, rounding and using the figure of $25,500 as a target, assuming a 40 hour week translates to 2,000 hours of work per year, if we simply increase the minimum wage to $12.75 per hour, we will have eliminated poverty. And once we have eliminated poverty, we can also eliminate all the bureaucracies needed to assist the poor, thereby reducing significantly the size of Fedzilla.

oldleprechaun on May 25, 2011 at 2:38 PM

The sad thing is, we could do that if businesses weren’t getting the “death by 1000 cuts” treatment from both the feds and states. You can’t both pay your workers $13 an hour on top of a mind-boggling array of what are being called ‘salami slice taxes’.

For instance, right here in Omaha the restaurants are suffering badly from a tax specific to them, and they’re one of our biggest money-makers.

Uncle Sams Nephew on May 25, 2011 at 10:33 PM

Right. Don’t forget the cost of the charging stations. And . . . the cost of the electricity!

Pablo Snooze on May 26, 2011 at 10:57 AM