Thursday, August 16, 2007

Battery Rentals and Recharge

According to Engadget, GM may lower the price of Chevy Volts by way of battery rentals.  Two things are interesting about the idea.  First, the idea itself, while primarily a marketing tool is smart.  Breaking the battery price out into a rental encourages consumers to compare overall costs more rationally.  The first comparison most consumers evaluate is the cost of the cars, i.e. the upfront costs.  GM hopes with this change these costs will be comparable.  The battery rental costs are then evaluated with the ongoing costs including gasoline expenses.  Even with battery rental costs an electric should beat a gas car here as well.  Essentially what I'm saying is it makes the comparison more apples to apples.

So, that's good, but there is another reason.  One way to bypass the range problems of electric cars is to allow them to be swapped in and out at service stations, similar to filling a gas tank.  It's a cool idea, but the problem was if a significant part of the wear and tear is concentrated in the battery, it's not very fair to swap out a near dead battery for a full one. 

If batteries are rented from GM, then they're all owned by the same company and swapping one battery for another require any financial consideration.  You'll continue to pay the monthly rental fee no matter which battery pack you currently have.

Once headed down that road, it's not as great a leap to think of renting the entire drivetrain and only owning the passenger compartment.

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