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.
Reflections of a Rational Republican 
Great job! A very interesting and enlightening read. I didn’t realize just how bad the payback period was for “alternative” energy vehicles in terms of savings. I know some will say that’s not the point, that it’s more about the mindset and behavior, but I disagree. If a paradigm shift’s going to happen we need a case for it financially as well as socially and politically. Without that, the change won’t stick – one of the reasons why trucks and SUV’s continue to sell so well.
To be fair, the Leaf looks pretty good at low electricity prices. They just aren’t low in California.
Pingback: Should I Buy a Hybrid or an Electric Vehicle? (Part VI): Fuel and Electricity Sensitivity Analysis | Reflections of a Rational Republican
In considering the “carbon tax”, did you take some time to consider, oh, I don’t know, CARBON?
Oh, let me guess – global warming is a global scientific conspiracy, right?
No. Just because I’m a Republican doesn’t mean I don’t believe in global warming.
Did you even read this post?