A new study conducted by Carnegie Mellon University says that plug-in hybrids with 40 miles of all-electric range are less cost-effective than hybrids with smaller battery packs.

“Forty miles might be a sweet spot for making sure a lot of people get to work without using gasoline, but you’re doing it at a cost that will never be repaid in fuel savings,” said Jeremy Michalek, an engineering professor who led the study, in an interview with Bloomberg. The study was funded by the National Science Foundation and was accepted for publication in the journal Energy Policy.

PGE Plug-in Hybrid

The Carnegie Mellon study is an attempt to test how prices and driving habits may affect consumer choices between current hybrids and future plug-in hybrids that run on a combination of gasoline and household electricity. Specific models were not named in the study. The Chevrolet Volt plug-in hybrid, scheduled for introduction in late 2010, is designed for 40 miles of all-electric driving, while Toyota’s plug-in Prius prototypes use smaller battery packs for an electric range of about seven to 10 miles.

Carnegie Mellon researchers used an electricity charging cost of $0.11 per kWh and retail gasoline price of $3.00 per gallon. The base battery cost is assumed to be $1,000 per kWh and a future low cost of $250/kWh case was also examined.

“The best choice of PHEV (plug-in hybrid) battery capacity depends critically on the distance that the vehicle will be driven between charges. Our results suggest that for urban driving conditions and frequent charges every 10 miles or less, a low-capacity PHEV sized with
an AER (all-electric range) of about 7 miles would be a robust choice for minimizing gasoline
consumption, cost, and greenhouse gas emissions. For less frequent charging, every 20-100 miles, PHEVs release fewer GHGs (greenhouse gases), but HEVs (conventional hybrids) are more cost effective. An increase in gas price, a decrease in the cost of usable battery capacity, or a carbon tax combined with low carbon electricity generation would increase PHEV cost effectiveness for a wide range of drivers.”

From Summary of Carnegie Mellon Study

The Carnegie Mellon is only the latest in a series of recent reports questioning the real-world mileage and benefits of plug-in hybrids. In its February issue, Consumer Reports road-tested a plug-in version of the Toyota Prius and concluded the cost was “more than you could ever expect to recoup in gas savings.”

“When we say we’re going to get 100 or 150 miles per gallon, then that’s setting expectations way too high. It just leads to disappointment. We need to deal in reality.”

Tom Turrentine
director of the Plug-In Hybrid Electric Vehicle Research Center

Earlier this week, the Seattle Times reported that the City of Seattle’s fleet of plug-in hybrids—designed to run for 30 miles exclusively on electricity—is averaging 51 miles per gallon. The search company Google has nine plug-in Prius hybrids used by its employees, and they are achieving an average of 54.9 mpg. These relatively low mileage numbers are partly attributed to the fact that Seattle and Google models were converted to plug-ins from conventional Priuses. Purpose-built plug-in hybrids will benefit from coordinated and optimized systems designed to minimize use of gasoline. In fact, industry observers question if miles-per-gallon is a useful measure of efficiency for vehicles that run entirely or mostly on electricity.

The Risk of Overpromising and Picking Winners

Plug-in hybrids are not expected to reach auto dealerships for another two years—while the 2010 Toyota Prius and 2010 Honda Insight, selling for about $25,000 and $20,000 respectively, will arrive in showrooms in April 2009. Toyota expects the new Prius to be rated by the EPA at 50 miles per gallon. Journalists testing the Prius and Insight have been able to achieve mileage above 60 miles per gallon. (As usual, your mileage may vary.)

The economic stimulus bill that was signed into law last week provides consumer tax credits for plug-in vehicles—offering more money to plug-in hybrids with bigger battery packs. The law does not provide consumer incentives to conventional hybrids. The stimulus package also provides $300 million for federal fleets to purchase high-mpg vehicles. In addition, automakers are vying for $25 billion in low-cost federal loans for retooling to produce high-efficiency vehicles. Government officials are now determining what kind of efficient vehicles will be purchased for fleets and what kind of technologies will be supported by the loans set aside for retooling. President Barack Obama wants to put 1 million plug-in hybrid vehicles on US roads by 2015—but some observers believe it is better for the government to set efficiency or emissions targets rather than choosing specific technologies or fuels.

“I think we all need to be more careful,” said Tom Turrentine, director of the Plug-In Hybrid Electric Vehicle Research Center, in Davis, Calif., in an interview with the Seattle Times. “When we say we’re going to get 100 or 150 miles per gallon [with a plug-in hybrid], then that’s setting expectations way too high. It just leads to disappointment. We need to deal in reality.”