Gasoline Vehicle (vs.) Electric Vehicle
The comparison between gasoline and electric vehicle is not just from an economic perspective but that also from an environmental angle and the impact on the Jamaican economy at the Micro level. This comparison is predicated on the fact that the Government of Jamaica (GOJ) will have to provide 100% duty free import and tax free status for Electric Vehicles (EVs).
The GOJ will benefit in its efforts in reducing gasoline imports, the reduction of dangerous green house gas CO2 from the environment, along with the significant short term and long term economic benefits that comes with a duty free and tax free status. The comparison will involve commercial sector taxi operators and private car owners that use gasoline and their respect operating expenditure (OPEX).
The official count for taxi operators in Jamaica as of 2011 that fall under the National Council of Taxi Associations (NCTA) is that of 21,000. Just as a quick introduction, these taxis account for 107,100 tons (metric ton) annually of greenhouse gas CO2 into the Jamaican environment.
The average cost per day for gasoline use for a taxi operator based on a survey in the corporate area, is that of $3,750. The operators in the survey stated that they work Monday through Saturday and as such when the total cost of their monthly gasoline OPEX is calculated amounted to $93,750 per month. The survey also pointed out that these men are the bread winners for their households and also took responsibility for the payment of their light bill that being an average of $5,500 per month.
Residential car owners and operators of fairly modern cars OPEX per month average amounted to approximately $14,000. If operator is making a car payment the average worked out to $30,000 per month. The total cost per car owner or operator for residential car in survey amounted to $44,000 per month. The survey also revealed that the average cost for electricity bills per household was that of $6,000 per month rounded off to an even number.
The residential gasoline car operator and that of the taxi operator light bill was brought into focus for a particular reason. For once the taxi operator or the residential car operator within demographic being outlined compares the benefits of owning and operating a gasoline vehicle versus that of owning and operating an electric vehicle. They both will recognize that EVs are more economical and also provide greater financial benefits.
For a taxi operator his gasoline taxi OPEX amounts to $93,750, when adding his light bill he now has a total cost of $99,250 per month. For the said taxi operator owning and operating a e-Taxi or a e-Cab along with a Micro Solar Power Plant at his residence to charge his electric car.
The e-Taxi or e-Cab operator would see his new OPEX along with owning a new vehicle and not that of his 10-15 year old gasoline car. Amount to approximately $60,000 per month while enjoying 100% free electricity at his home in addition to now taking home an extra $39,250 per month.
Likewise for a residential gasoline car owner with a car payment along with average monthly gasoline cost per month, or a car owner without car payment but same OPEX of $44,000 per month. Taking residential light bill of$6,000 per month, the total OPEX amounts to $50,000 per month. The residential EV owner monthly OPEX will now be $36,000 while enjoying free light at home and a monthly savings of $14,000.
All EVs in question would be superior performance in respect to miles per gallon versus miles per kWh along with superior exterior and interior quality normally associated with a 2011-2012 new car.
Economics & the Environment
New and used gasoline vehicles have been entering the Jamaican market for decades. Government of Jamaica (GOJ) accepting Electric Vehicles (EVs) obtaining 100% duty and tax free status would contribute to EVs affordability for consumers. Affordable interest rate financing for EVs would also have to be at a competitive rate in order to compete effectively with Gasoline Vehicles (GVs). GOJ moving towards this implementation will have a positive economic impact on the Jamaican economy.
Skeptics and gasoline lobbyist no doubt will seek to maintain the old system. Prompting the GOJ to abandon its quest from independence from fossil fuel while not working towards a clean air policy which is crucial to the environment.
Let us assume that out of the 21,000 gasoline taxi operators’ switch to e-Taxi or e-Cabs. We already are aware that savings derived from OPEX of an e-Taxi or e-Cab versus that of a gasoline taxi amounts to approximately $39,250 per month. This may appear as simple math, but it is not simple economics as the savings increases the taxi operator’s disposable income. As such the 1,000 e-Taxis or e-Cabs would see $39.3 million per month or $471 million annually in disposable income that can make its way into the Jamaican economy. The environmental impact would also be of significant effect.
As according to United States Environmental Protection Agency (EPA) – Office of Transportation & Air Quality 2011 report. The average sedan annual CO2 emission per mile = CO2 per gallon / MPG = 8,887/21 x 12,000 = 5.1 metric tons in CO2.
As such 1,000 e-Taxis replacing 1,000 gasoline taxis would reduce greenhouse gas by 5,100 metric tons of CO2 per year. When attaining 10,000 e-taxis replacing the equivalent in gasoline taxis. The reduction of CO2 would amount to 51,000 metric tons per year.
Residential EV owners versus per taxi operator may not appear to save much money per month. But the number of residential gasoline vehicle operators or future buyers is greater than the 21,000 gasoline taxi operators, and as such GOJ positive stance towards EVs may see the EVs along with Micro Solar Power Plants and or Solar Car Ports contributing significantly to the Jamaican economy.
The first 50,000 residential EVs replacing gasoline cars, would translate to $14,000 x 50,000 = $700 million per month in disposable income based on savings of buying and operating a gasoline car at today’s rate. This translates to $8.4 billion per year in disposable income making its way into the economy.
From an environmental perspective this amounts to a reduction of 5.1 metric tons of CO2 x 50,000 = 255,000 metric tons of CO2 per month or 3.06 million metric tons of CO2 no longer being emitted into the atmosphere. An introduction of an economical efficient electric public transportation such as the e-Buses, e-Trams will no doubt lead to less gasoline cars being imported into Jamaica.
Carbon Credits value would equal at a premium of US$20 as not only is gasoline not being used in these cars but likewise the homes have gone solar power. As such 3.06 million metric tons of CO2 x US$20 per metric ton = US$61.02 million per year in Carbon Credit as GOJ moves towards an eco friendly EV policy.
The Carbon Credits that GOJ can derive from an eco friendly & 100% duty and tax free EV policy far outweighs all arguments against it. As any projection on tax derived from EV would not materialize as the tax would make owning an EV prohibitive. Thus GOJ would not collect from what was not bought along with the fact that EVs has a 4:1 advantage ratio benefit for the economy when compare to GVs based on the multiplier effect.
The GOJ should enact a mandatory policy for all new and used car dealers to switch from the importation of gasoline vehicles such as cars and busses and to that of total electric vehicles once a national plan is in place to accommodate EVs. With the right incentive and implementation of technology, along with the fact that EVs are now affordable. The GOJ can reap major economic and environmental benefits in the short and long run.
Technology such as Micro Solar Power Plant – Patent REF# 1/18/5221 and economic market process such as Public Utility Product/Public Utility Service Market Process – Patent REF# 1/18/5242 all provide the competitive edge for Kingston Venture Capital.
Considering that EVs first commercial introduction is that of e-Taxi and e-Cabs. GOJ favorable response for EVs introduction to the Jamaican streets could not come at a better time, especially in light of the fact that taxi operators are calling for fare increase because of rising cost in gasoline and tough times in the economy.
Economics and Energy for all nations is a matter of national security. Government of Jamaica not adhering to a positive Electric Vehicle policy beneficial to the consumer and the environment, along with paving the way for economic growth for the country. Is tantamount to a dereliction of duty or treason. Failure is not an option.
Mr. Rodger McKenzie
2012 Jamaica’s Environmental Action Awards Nominee
Founder / CEO Kingston Venture Capital
Founder IPO2.0 & (Diaspora IPO2.0)
Founder Public Utility Product/Public Utility Service Market Process
Founder Micro Solar Power Plant