PB: Volt Demands Jolt of Reality

by SDM

Another interesting item on the Palmetto Bay Village Council agenda for January 7, 2012 is the “purchase of two(2) 2012 Chevrolet Volts from Grand Prize Auto in the amount of $74,300.00.” (See Item 10-c at page 132.)

According to staff, the village’s newly hired building and code enforcement inspectors need these ultra-quiet vehicles to sneak up on unsuspecting home and business owners. Okay, SDM might have added that last bit as a snide comment, but since most of you won’t read the actual item how will you know SDM’s full of it?

One thing you will not find in the staff analysis (seriously) is a return on investment calculation or a life-cycle cost analysis. You know, those pesky analyses normal businesses conduct before they purchase expensive equipment like automobiles.

A typical life-cycle cost analysis looks at the cost of ownership, including maintenance and disposition. Such an analysis allows one to compare various alternatives in the market to ensure that the business purchases the equipment that will be least expensive during its useful life.

If the village had done one of these analyses, they may have found what the New York Times reported. Namely, that:

The Volt, which cost nearly $40,000 before a $7,500 federal tax credit, could take up to 27 years to pay off versus a Chevrolet Cruze, assuming it was regularly driven farther than its battery-only range allows. The payback time could drop to about eight years if gas cost $5 a gallon and the driver remained exclusively on battery power.

The Lundberg Survey, which tracks fuel prices, said in March that gas prices would need to reach $12.50 a gallon for the Volt to make sense purely on financial terms. It said the Leaf would be competitive with gas at $8.53 a gallon. (Emphasis added by SDM.)

Given such bleak statistics, the authors asked and answered the obvious question:

So why do some buyers pay more for advanced technology that might not save them money? Many never do the math, analysts say, or they tend to overestimate how much the added miles per gallon translate into actual monetary savings. Some view the higher mileage as better for resale value, hoping to come out better on the back end. (Emphasis added by SDM.)

Well, let SDM do the math. If the village were to use the state contract, it can purchase a comparable vehicle for less than $18,000 each:

2013 Chevrolet Cruze 4dr Sdn Auto LS (1PL69) Moore Family Management dba Rountree-Moore Chev / Nissan $16,835
2013 Chevrolet Cruze 4dr Sdn Auto 1LT (1PX69) Moore Family Management dba Rountree-Moore Chev / Nissan $17,596
2013 Chevrolet Volt 5dr HB (1RC68) GARBER CHEVROLET BUICK GMC TRUCK $37,209
2013 Ford Focus 4dr Sdn S (P3E) S DON REID FORD $13,620
2013 Ford Focus 4dr Sdn SE (P3F) S HUB CITY FORD INC $14,999
2013 Ford Focus 5dr HB SE (P3K) S HUB CITY FORD INC $15,999
2013 Ford Focus Electric 5dr HB (P3R) DON REID FORD $35,750

The Village of Palmetto Bay is wasting at least $37,000 so that certain elected officials can run around pretending to be green.

SDM Says: If the village council is so insistent on wasting money on untested technology, please step up to the plate and pay for it with your own money.

About these ads