Medium length OP-ed piece in the Journal about electric cars. Ron Adner, from Dartmouth's Tuck school of business opines that electric cars will have poor resale value due to deterioration of the expensive battery over time. And that resale value is a crucially important factor in the decision to buy a new car. And, plugging in zillions of electric cars to recharge will over load the national electric grid and put the lights out all over North America. Being a professor at the school of business, Mr. Adner suggests a change in business model. Instead of selling electric cars, he suggests leasing them like cell phones. That will solve everything. When all you have is a hammer, every problem looks like a nail...
In the real world these are non problems. Sure the batteries wear out over time, but so does every other part of a car. The depreciation on new cars is already so awful that short lived battery packs won't make things much worse. A new car looses half its value the moment you drive it off the dealer's lot. The NADA blue books show cars depreciate to rock bottom after seven years. The design goal for battery life on the Chevy Volt was 10 years. Nobody knows if they achieved that goal, the cars haven't been around for 10 years yet. So electric car resale value will be much less than what they cost new. What's new here?
Then there is the load on the electric grid. Non-problem. Demand for electricity drops way down at night when every one goes to bed and turns off the lights and the TV. Have a timer start the charging after 11 PM. Mr. ElectricCarOwner gets home at 6 PM and plugs in his car. It doesn't draw juice until the timer cuts it in after the evening power peak is over. Electric companies can offer bargain rates to encourage off peak car charging.
I'm glad none of my children went to Dartmouth, since they have turkey's like this teaching there.
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