Yesterday I relaxed my $0.40 per kWh electricity price constraint to see if the two EVs and one PHEV would be more attractive at a lower cost of electricity. It turned out that the Nissan Leaf did become a more attractive option provided that gas prices were high and the owner travels more than 10,000 miles a year.
Today I will examine the impact of a hypothetical carbon tax on each ton of carbon dioxide a Prius and a Corolla emit annually. Since I have already ruled out all EVs and PHEVs based on my high marginal electricity cost, I only performed this analysis for the Toyota Prius.
It turns out that a carbon tax of $25 per ton only makes the Prius marginally more attractive relative to no carbon tax. The result is similar at $50.
Below are the results of this analysis along with my initial analysis from Should I Buy a Hybrid or an Electric Vehicle? (Part V).
With no carbon tax, the Toyota Prius’ premium has the following payback periods over the price of a Toyota Corolla.
©2011 Reflections of a Rational Republican
The following chart shows the payback periods for a $25 per ton carbon tax.
©2011 Reflections of a Rational Republican
This last chart shows the payback periods for a $50 per ton carbon tax.
©2011 Reflections of a Rational Republican
And so concludes my series on evaluating the economic feasibility of replacing a standard ICE automobile with an HEV, EV, or PHEV.
It seems buying a Prius makes sense only if I think gasoline prices will stay above $4 and that I will drive more than 20,000 miles per year.
