During my debate with Bernard Finel a while back I made a point about the practicality of replacing the whole U. S. vehicle fleet that I thought was worth revisiting. According to the Department of Transportation, the total number of licensed drivers back in 2006 was 202,810,438. According to this post from Calculated Risk the average number of vehicles per licensed driver is 1.2 and the turnover rate for the fleet has been hovering at around 15 years for more than a decade and it hasn’t dipped below 10 years for any protracted period for a quarter century. As I noted previously a decent rule of thumb for the cost of an electric car is $40,000 and according to the Department of Energy the average cost of a new car in 2006 was around $23,000.
Armed with that information we can calculate the incremental cost for replacing the entire fleet with electric cars over various different periods of time.
The total number of vehicles in the fleet is 202,810,438 X 1.2 or 243,372,526.
The total current cost of replacing the fleet is 243,372,526 X $23,000 or $5,597,568,098,000.
The total cost of replacing the fleet with electric vehicles would be $9,734,901,040,000.
Consequently, the incremental cost would be $4,137,332,942,000.
If the entire cost were borne in a single year (which would have to be the case if we were to completely avoid the consequences of an oil price shock on transport), the incremental cost would be more than $4 trillion or nearly a third of the entire GDP.
If the entire cost were borne over the period of 10 years, then the incremental cost would be more than $413 billion dollars per year, roughly our entire military budget again, over the period of ten years. Clearly, we’re not going to save our entire military budget by doing this, so we’re talking about some pretty considerable incremental costs.
Of course, there are other reasons why this isn’t that great a plan. One of the most serious is that there is currently no electrical vehicle being produced in quantity anywhere. I believe that the reason this is the case is that nobody knows how to make batteries in quantity cheaply enough. There’s nothing like impossibility to render a plan impractical.
Am I missing something?