Cleantech and hybrid car enthusiasts were all a-Twitter this week over General Motors’s claim that the new Chevy Volt will get a fuel economy of 230 miles per gallon (mpg). It was widely circulated and many breathless column-inches were printed, yet I was unable to find a single article that actually made any sense of this number.

As usual, I was forced to sort it out for myself. Follow me as I walk through the numbers… such as they are.

First, the very concept of miles per gallon doesn’t make sense if it doesn’t take the initial charge of a plug-in hybrid into account. That’s like saying the electricity that runs the Volt for the first 40 miles is free.

Instead, we should be using a new metric, like miles per kilowatt hour (I will use m/kWh for this). By converting the gasoline used into its kWh equivalent, then adding it to the kWh for the initial charge, we could come up with a simple number.

The reality, however, is much more complex.

Calculating Miles per Kilowatt Hour

In a serial hybrid like the Volt, there are losses incurred (on the order of 15%) for using an on-board generator that burns gasoline to charge up the battery pack which drives the powertrain motor. There are also transmission losses, and losses from the self-discharge of the battery pack when it’s unplugged, both of which are difficult to quantify.

So simply converting the BTU content of the gasoline to kWh (33.7 kWh equivalent per gallon) isn’t quite right. Nor do we know the actual efficiency of the Volt’s generating and charging systems.

Even if we had accurate numbers to work with, it would be somewhat misleading to use m/kWh as a basis for comparison. As most consumers know, there is a big difference between city and highway driving, because straight gasoline engines typically operate at very low efficiency below 25 mph, and are most efficient between 25 and 55 mph.

Electric motors operate with a fairly constant efficiency at various speeds, but if the battery pack on a serial hybrid is deeply discharged and the gasoline generator used heavily, the overall fuel economy plummets. In the case of the Volt, it would fall from the alleged 230 mpg to 50 mpg or less. And both straight gasoline engines and hybrids consume more energy over 65 mph as wind resistance increases.

In order to address the issue, the Environmental Protection Agency (EPA) is working on a new draft methodology for testing mileage and establishing fuel economy ratings, but it is not yet public and EPA has declined to confirm GM’s claim for the Volt.

In the absence of good comparative standards, car companies can get away with wild claims like 230 mpg; not to be outdone, the Nissan boasts 367 mpg for its new Leaf car. But we can take a stab at some reasonable calculations.

GM claims that the new EPA methodology will be stated in terms of kWh per 100 miles traveled, and that by this metric, the Volt will go 100 miles on 25 kWh of battery charge. This seems a less than perfect way of rating the fuel economy, since the Volt will only run 40 miles on a charge before the gasoline generator kicks in. To arrive at the 230 mpg number, GM assumes a 51-mile driving cycle with drivers charging up their Volts once a day, so the battery powers 4/5 of the distance.

Taking GM’s claim at face value though, we can calculate that the Volt gets about 4 m/kWh. This can be compared to approximately 0.8 m/kWh for a typical European diesel car getting an average 40 mpg, or about 0.4 m/kWh for a typical American gasoline car getting an average of 20 mpg. (Newer models have a range of higher fuel economies, but those are the averages of the current fleets.)

Professor David MacKay of the University of Cambridge notes that even this metric can range wildly from 0.24 m/kWh for the BMW Hydrogen 7 car, to 3-10 m/kWh for some all-electric vehicles.

A blog post by former Tesla chief marketing officer Darryl Siry claims that the Tesla Roadster will do 244 miles on a 62.3 kWh charge, for a 3.9 m/kWh economy. That’s close to the Volt’s alleged 4 m/kWh, so let’s use the latter as an example.

Now we can try to evaluate the actual cost of driving a Volt. If you thought the above numbers were squishy, try these on for size.

What Does It Cost To Drive?

First there is the price of residential electricity. This varies widely from state to state, depending on a number of factors including the fuels used in power stations, the utility rate structures, and the time of use. At the low end is Idaho with an average $0.07/kWh, and at the high end is Hawaii with $0.22 /kWh. In my home state of California, the average cost is $0.14/kWh (EIA Apr 2009 data).

The average price of $0.115/kWh for the whole U.S. is most commonly used in price calculations, but this doesn’t tell the whole story. My last PG&E bill priced the first “baseline” 249 kWh at $0.12/kWh, and then continued on up a sliding scale to $0.38/kWh for the “201-300% of baseline” kilowatt-hours. Over the month, the average price was $0.22/kWh.

So let’s split the difference and use $0.15/kWh. Assuming 4 m/kWh, the electricity cost of operating a Volt comes out to about $0.04 per mile. If we compare that to a standard 20 mpg ICE vehicle burning gasoline at $3 per gallon, that’s $0.15 per mile, or nearly four times the cost of the Volt’s fuel.

But consider what happens when we use different assumptions. If instead we compare a new regular gasoline powered car with a fuel economy of 40 mpg, and assume a grid power cost of $0.30/kWh, the Volt would come dead even with the regular car at $0.08 per mile. And that, dear reader, is very possible — even likely.

Future Costs Are Key

Suppose you buy a new car today and drive it for a full, useful life of 15 years. Would the Volt save you money over 15 years?

Within the next two years, we should see global oil production go into terminal decline, and the price of gasoline could begin to test new highs of $5 - $6 a gallon (or more). At $5 a gallon, a 40 mpg regular car will cost $0.13 per mile to drive — if you can get the fuel at all.

At the same time, the cost of grid power will go up. Natural gas prices are dragging the absolute bottom now around $3.50/MMBtu, but they ranged as high as $13 only last year. When the economy recovers, we should see the high end of the range again. We must also assume that in the next few years, carbon emissions will come with a cost attached, so the price of electricity generated from coal and natural gas will go higher.

In 15 years, when that vehicle is ready for retirement, the world will likely be at or past the peak of oil, gas, and coal, and the prices for all of them will be significantly higher than today. Renewables will still be a small part of the grid power mix, but at that point, they should be even cheaper than the fossil fuels. So what price shall we anticipate for the year 2025 — $0.40/kWh? $0.50? More? At $0.50, the cost of driving the Volt would be the same as driving a 40 mpg car with gasoline at $6 a gallon — $0.15 a mile, or about $180 a month assuming daily trips of 40 miles.

In reality, if that’s what it costs to drive a car, actual vehicle miles driven will fall as people choose to carpool and take whatever public transportation may be available at that point (assuming it costs less than $6 a day).

Even if the cost of expensive battery packs falls over the next 15 years, as it surely will, it’s hard to say at this point when electric and plug-in hybrid vehicles might gain the cost advantage over higher efficiency ICE vehicles. However, when you add in the myriad other factors like CO2 caps, a gradual transition to an all-electric infrastructure powered by renewables, shortages of liquid fuels, and political sway, it does seem likely that they will win out eventually.

One thing is certain: You won’t be driving 230 miles on a $3 gallon of gasoline.

Until next time,

Chris