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See Inside November 2010

Window Shopping for Electric Cars: How to Compare Conventional and Plug-in Vehicles

How consumers can compare plug-in vehicles with their gasoline-powered cousins



Courtesy of Tesla Motors

The U.S. Environmental Protection Agency has an electric car problem. Federal law requires that new cars be sold with a label that includes the vehicle’s fuel efficiency as measured in miles per gallon. Yet beginning next year, gallons will start to give way to watts, prompting the EPA to redesign their window stickers.

In an attempt to smooth the transition, the EPA has adopted a new unit called miles per gallon of gasoline-equivalent (MPGe). Basically, it is a conversion factor that measures the electricity required to run the car (usually expressed in kilowatt-hours) in another unit of energy: gallons of gasoline. An all-electric vehicle should get somewhere north of 100 MPGe, even though it will never use a drop of gas.

The new figure doesn’t clear up the apples-to-oranges problem, however. Consumers tend to use the old-fashioned MPG metric as shorthand for many things—including how green the car is and the cost of driving—that don’t jibe neatly with MPGe. For example, the carbon footprint of an electric vehicle strongly depends on local electricity sources [see “The Dirty Truth about Plug-in Hybrids,” by Michael Moyer; Scientific American, July].

With so many factors to consider, the EPA created two sticker prototypes. One throws together all the information a consumer could possibly want to know in one place. The other takes the opposite approach. It is dominated by a single letter grade—A+ through D (there are no failures here)—which encapsulates all those factors in one score. Unfortunately, this simple measure would score 88 percent of all vehicles between a B and a C. “You need sufficient resolution to allow customers who say ‘I want a minivan’ or ‘I want a midsize SUV’ to meaningfully cross-shop vehicles that are similar,” says John M. DeCicco, a senior lecturer at the University of Michigan’s School of Natural Resources and Environment. “Letter grades fail on that score.”

A closer look at that sticker reveals a more important figure: how much the car will cost to operate compared with the average vehicle. Critically, the EPA adds up five years’ worth of driving. “It takes differences that are small and that you might ignore and makes them substantial but not in a misleading way—five years is an amount of time you’re likely to spend with your car,” says Richard Larrick of Duke University’s Fuqua School of Business. Larrick and his colleagues have shown that simply scaling up numbers influences consumer choice. For example, students, offered an option of two movie rental plans, were more likely to choose an extended plan when the number of movies in the plan was tallied by the year, not the month. Similarly, the EPA stickers should have the effect of promoting vehicles that are less expensive to operate, like electric cars. Good-bye gallons, and good riddance.

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