Mercedes S-class PHEV subsidy follies

Companies will continue to do what is in their best interest. No different from when Tesla built one swapping station to receive hundreds of millions in extra zev credits.

Around 20 miles of pure EV range seems like a common amount for PHEV's, excluding the Volt. Probably enough to get an exemption from congestion charges as those spread to more European cities.

jdbob said:

Around 20 miles of pure EV range seems like a common amount for PHEV's, excluding the Volt. Probably enough to get an exemption from congestion charges as those spread to more European cities.

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I think that's exactly what it is. I believe the requirement there is at least 50 km - per NEDC, which is a rather optimistic standard (the first generation Volt was rated at 52 miles there vs 35 EPA miles.)
Walter

hpham007 said:

Companies will continue to do what is in their best interest. No different from when Tesla built one swapping station to receive hundreds of millions in extra zev credits.

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Hundreds of millions?? Do you have some citation for this?

mspohr said:

Hundreds of millions?? Do you have some citation for this?

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The current average price is about $4000 per credit.

All Model S cars are currently eligible for "200 mile" range credit at 4 credits per car = $16,000 per car.

The former credit value for a "300 mile" range car (85kWh) with battery swapping was 7 credits = $28,000 per car.

The former credit value for a "200 mile" range car (60kWh) with battery swapping was 5 credits = $20,000 per car.

Let's just say the aggregate was $26,000 in credits per car (weighted to more 85kWh sales), and now all cars are worth just $16,000, therefore $10,000 LESS is earned per car today in credits.

I don't know how many cars were sold in qualifying states, but let's say 30,000.

30,000 cars * $10,000 = $300 million

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TexasEV said:

My point is there is no reason for federal subsidies to encourage purchasing a car such as this.

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Those credits are NOT federal anything. It's California rules.

TexasEV said:

Mercedes sold 10 of its S-class plug-in hybrid in the U.S. in July according to InsideEVs.
First New EV For US In 2015 Finally Arrives: Mercedes Delivers The S550 Plug-In

This car has all of a 8.7 kWh battery giving a whopping 18 miles of electric range. So basically it's a fancy PiP. For all the venom directed at Tesla buyers getting the $7500 EV tax credit, why does no one mention that buyers of this Mercedes get more than half that amount for buying a car that will do almost nothing but occupy EV charging spaces in place of EVs which need them? I was amazed to find how little battery it takes to qualify for most of the federal tax credit. The base is $2500, then it's $417 per kWh up to a maximum of 16kWh, or a total of $7500. The Mercedes S-class gets a federal tax credit of $4700, or more than half of the credit that a Tesla gets with batteries almost 10X as large that can actually get you somewhere.

For the conspiracy theorists out there, the 16 kWh battery size for qualifying for the full $7500 credit just happens to be the battery size of the first GM Volt.

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That'll still be ~15-18 electric miles a day for the buyers of that car, plus regenerative braking most all of the time for further fuel efficiency gains. And I believe a consistent theme in surveys and interviews with plug-in vehicle owners is that their next vehicle will have more electric miles than the last one, or will be all electric. There are any number of people for whom a plug-in is an intermediate step in their own comfort and willingness (we know they have the ability) to go all electric.

So I agree with your unstated premise that the tax credit isn't as efficient as if it had gone to a Model S purchase - Mercedes could do more and it would be highly desirable for them to do more.


I also don't have a problem with this. My starting premise is that every electric mile is a good mile, and these are drivers that will be getting some electric miles every day (given of course, that they plug their car in over night ). And they'll be daily experiencing the joy of electric drive. With luck, some of them live close enough to work that they can reasonably get through some days on pure electricity. All of these owners will be one step closer to being all electric, and they will be contributing electric miles today.

The overall size of the problem that I see is so big, that I'm loathe to complain about any positive step towards improving the problem, and I see this as a positive.

TexasEV said:

Mercedes sold 10 of its S-class plug-in hybrid in the U.S. in July according to InsideEVs.
First New EV For US In 2015 Finally Arrives: Mercedes Delivers The S550 Plug-In

This car has all of a 8.7 kWh battery giving a whopping 18 miles of electric range. So basically it's a fancy PiP. For all the venom directed at Tesla buyers getting the $7500 EV tax credit, why does no one mention that buyers of this Mercedes get more than half that amount for buying a car that will do almost nothing but occupy EV charging spaces in place of EVs which need them? I was amazed to find how little battery it takes to qualify for most of the federal tax credit. The base is $2500, then it's $417 per kWh up to a maximum of 16kWh, or a total of $7500. The Mercedes S-class gets a federal tax credit of $4700, or more than half of the credit that a Tesla gets with batteries almost 10X as large that can actually get you somewhere.

For the conspiracy theorists out there, the 16 kWh battery size for qualifying for the full $7500 credit just happens to be the battery size of the first GM Volt.

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After reflecting on the subject and reading adiggs reply, I think I would take the opposite perspective - limiting the rebate to 16 kWh makes sense, and if anything it should be front loaded to give more credit per kWh to smaller packs. Here's why:

The purpose of the tax credit is to get more electric miles driven, either for reduced carbon dioxide or less dependence on foreign oil, right?

Given that perspective and the way people drive, having a lot of cars with little batteries will give far more electric miles than a few cars with big batteries - because the average person only drives about twenty miles per day, and over 80% of the driver-days are 40 miles or less.

Thus, getting the first mile into a car reduces usage by a mile per day pretty consistently (assuming people bother to plug it in,) but each mile of EV range is worth less to society, and by the time you're adding the 41st mile, it only reduces the usage by one fifth of a mile per day on average based on the NHTSA data.
Walter

Oba said:

The current average price is about $4000 per credit.

All Model S cars are currently eligible for "200 mile" range credit at 4 credits per car = $16,000 per car.

The former credit value for a "300 mile" range car (85kWh) with battery swapping was 7 credits = $28,000 per car.

The former credit value for a "200 mile" range car (60kWh) with battery swapping was 5 credits = $20,000 per car.

Let's just say the aggregate was $26,000 in credits per car (weighted to more 85kWh sales), and now all cars are worth just $16,000, therefore $10,000 LESS is earned per car today in credits.

I don't know how many cars were sold in qualifying states, but let's say 30,000.

30,000 cars * $10,000 = $300 million

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Those credits are NOT federal anything. It's California rules

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These are nice calculations but irrelevant to my question (and also irrelevant to what Tesla has actually received). The original assertion was:
"No different from when Tesla built one swapping station to receive hundreds of millions in extra zev credits."

So, how does one swapping station in California lead Tesla to receive hundreds of millions in extra zev credits?

mspohr said:

These are nice calculations but irrelevant to my question (and also irrelevant to what Tesla has actually received). The original assertion was:
"No different from when Tesla built one swapping station to receive hundreds of millions in extra zev credits."

So, how does one swapping station in California lead Tesla to receive hundreds of millions in extra zev credits?

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I spelled it out above. It's not the swapping station that earned them anything. It didn't. Nada. Nothing.

It was the vehicle that was CAPABLE of battery swapping and DEMONSTRATED to California regulators that got Tesla the 5/7 credits per car through last year. By my generic calculations, they earned $10,000 more per car under the current rules enumerated below. Again, about $300 million more in credits under the old rules (30,000 vehicles in qualifying US states * $10,000 per car) versus the new rules that require real bonafide battery swapping that provides for:

1) ability to refuel to 95% of full capacity within 15 minutes or less

2a) every car in the fleet has used the battery swap at least once

-or-

2b) 4% of the fleet may have 25 maximum swaps each

-or-

2c) some value between 2a and 2b that equals an average of every single car in the fleet having one bonafide battery swap, while not exceeding 25 swaps on any one car

Oba said:

I spelled it out above. It's not the swapping station that earned them anything. It didn't. Nada. Nothing.

It was the vehicle that was CAPABLE of battery swapping and DEMONSTRATED to California regulators that got Tesla the 5/7 credits per car through last year. By my generic calculations, they earned $10,000 more per car under the current rules enumerated below. Again, about $300 million more in credits under the old rules (30,000 vehicles in qualifying US states * $10,000 per car) versus the new rules that require real bonafide battery swapping that provides for:

1) ability to refuel to 95% of full capacity within 15 minutes or less

2a) every car in the fleet has used the battery swap at least once

-or-

2b) 4% of the fleet may have 25 maximum swaps each

-or-

2c) some value between 2a and 2b that equals an average of every single car in the fleet having one bonafide battery swap, while not exceeding 25 swaps on any one car

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So, I'm still waiting to see how the swapping station earned them hundreds of millions of dollars in extra zev credits.

mspohr said:

So, I'm still waiting to see how the swapping station earned them hundreds of millions of dollars in extra zev credits.

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I'm with mspohr. Oba's calculations shows that the difference between 4 and 7 credits would seem to be worth $10,000 each car, but the credits are worthless without a buyer. And over the past 2 years, Tesla's only managed to sell ~$200 million worth. Which means the extra credits had $0 value.

mspohr said:

So, I'm still waiting to see how the swapping station earned them hundreds of millions of dollars in extra zev credits.

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Ok, so we're just being a bit pedantic? Hopefully, somebody learned something from this dialog.

Oil4AsphaultOnly said:

I'm with mspohr. Oba's calculations shows that the difference between 4 and 7 credits would seem to be worth $10,000 each car, but the credits are worthless without a buyer. And over the past 2 years, Tesla's only managed to sell ~$200 million worth. Which means the extra credits had $0 value.

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Good point. I was going to do the math on Tesla's SEC filings to find the total value of ZEV credits they had, but even I remember there is no way they can fit another $300 million in there. Also I remember looking at the credit values for the Model S and there was only a very brief period that Tesla got 5/7 credits.

Doing math based on theoretical values is nice and all (I know certain journalists got a value of $35k that Tesla supposedly got for each car from similar math) but doesn't reflect the reality of the credit market.

Here is a good German engineering afterthought, for those who sell at the fleamarket it may come as a real perk though:



Quota cars are weird for sure.