Mach-e for Road Trips just sucks. Not even close. More expensive than gas

[Old_Norm]

No, I’m just pointing out the basic macroeconomics for oil.

Oil drilling, transporting and refining are all fixed costs.

Demand going down doesn’t change these costs. If anything, it can make them go up due to less economies of scale.

When you’re talking about “supply and demand,” that’s more about the ability to price products in the market, it has nothing to do with the supply side costs and efficiencies that matter for oil.

Oil and gasoline prices rarely have followed normal supply/demand rules any ways for lots of reasons-

1. OPEC completely manipulates the market. They control supply and pricing

2. Consumers don’t have much of a choice. When gas is $4/gallon I use about the same amount as when it’s $2/gallon.

3. like I mentioned above, what it costs to get the stuff out of the ground and refine it isn’t really affected by supply/demand

There are more I’m sure, but those are just a few off the top of my head.

I'll just address the 3 points you made.

1. The market controls the price of oil. If OPEC really did control the price, crude oil wouldn't have dropped from $145 a barrel in 2008 to $87.01 in 2024. If you factor in inflation ($145 in 2008 = approx. $212 in today's dollars) that is a $125 a barrel drop.

2. Actually consumers as a whole do have a choice and exercise it when gas prices are very high.
" For the months of August, September, and October, from 07 to 08, the percent price increases were 36%, 32%, and 12%. These price increases resulted in the largest monthly, year-over-year declines in U.S. vehicle miles traveled (VMT) since record keeping began in 1942."
https://www.fhwa.dot.gov/policy/otp...ases resulted in,record keeping began in 1942.

3. the cost of "getting the stuff out of the ground" depends on demand. Economies of scale figure into that cost as demand increases or decreases. Extracting one barrel of crude oil might make the cost per barrel to be hundreds of thousand of dollars. Extracting 500K barrels would reduce the cost per barrel significantly.

One last punch to the dead horse. "Oil drilling, transporting and refining are all fixed costs." is incorrect. Fixed costs remain the same regardless of production output. They are things like lease and rental payments, insurance or interest payments. Variable costs change based on the amount of output produced. Variable costs are things like utilities, labor (oil drilling), commissions, and raw materials; the cost of materials used in production (oil drilling, refining).




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[Old_Norm]

But it will cost hundreds of billions to recapitalize refineries to change the product mix. It can't happen overnight.

Not sure if that cost estimate is accurate, they change the mix now and still make billions of dollars. I agree, it will take a lot of time. But I believe that period will correspond to the time it takes for the number of ICE vehicles to become negligible (I just may not be around to see it ?)

 

[Mach1E]

I'll just address the 3 points you made.

1. The market controls the price of oil. If OPEC really did control the price, crude oil wouldn't have dropped from $145 a barrel in 2008 to $87.01 in 2024. If you factor in inflation ($145 in 2008 = approx. $212 in today's dollars) that is a $125 a barrel drop.

2. Actually consumers as a whole do have a choice and exercise it when gas prices are very high.
" For the months of August, September, and October, from 07 to 08, the percent price increases were 36%, 32%, and 12%. These price increases resulted in the largest monthly, year-over-year declines in U.S. vehicle miles traveled (VMT) since record keeping began in 1942."
https://www.fhwa.dot.gov/policy/otps/innovation/issue1/impacts.cfm#:~:text=These price increases resulted in,record keeping began in 1942.

3. the cost of "getting the stuff out of the ground" depends on demand. Economies of scale figure into that cost as demand increases or decreases. Extracting one barrel of crude oil might make the cost per barrel to be hundreds of thousand of dollars. Extracting 500K barrels would reduce the cost per barrel significantly.

One last punch to the dead horse. "Oil drilling, transporting and refining are all fixed costs." is incorrect. Fixed costs remain the same regardless of production output. They are things like lease and rental payments, insurance or interest payments. Variable costs change based on the amount of output produced. Variable costs are things like utilities, labor (oil drilling), commissions, and raw materials; the cost of materials used in production (oil drilling, refining).




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You’re talking about oil prices and costs like it’s theoretical, I’m talking real world.

There is no world where an oil company is extracting “one barrel of oil.”

I won’t bother with my resume, but let’s just say that I studied this in school. I’m not talking about fixed vs variable business expenses nor need an explanation on how those things work.

When I said that extracting oil is a “fixed cost,” for the sake of this argument, what I meant is that the cost of extraction doesn’t care what the demand for gasoline is.

If it’s $75/barrel to drill offseas or $50/barrel to drill on land, that cost doesn’t change based on market demand. If anything at some point of low production, like we both have stated, that cost will go up!

There is a point where they stop drilling because the cost to drill is more than what they can sell the oil for. We have seen this with offshore drilling in recent years.

Why was I making this point? You stated that if gas demand goes down that the costs would go down for oil companies. Simply not true. Those drilling costs would be unchanged (ie fixed).

Just keep in mind, I was trying to simplify this point to show that you were wrong about that one point and wrong in the OPPOSITE direction. Not talking about minor cost changes etc. I realize that things can be changed slightly. But either way, I believe you were saying that costs would go down and they would in reality either stay the same or go up depending on the amount of demand drop.

And “cost” for the manufacturer isn’t the same as “price” for the consumer. Something that it seems you were confusing with your “supply and demand” argument earlier.

 

[Tampamike]

Just a price point on 19 Sep 2024. Valdosta Ga EA price was $.56 WITH the pass. FPL in St. Augustine at Gates was $.33. I will be avoiding EA as much as possible.

Yeah, FPL is winning the price war. I regularly use one in Naples that is across the parking lot from a Tesla and about 10 miles away from an EA that has been historically bad on operability. The FPL is the cheapest and is very reliable. I’ve seen a broken one once or twice but they seem to get fixed quickly. The only drawback is that they are a little slower. They max out at 80kw. They have some higher power units at other locations though. FPL is $0.30, EA with a membership is $0.42 and Tesla varies between $0.43 and $0.49.

 

[Old_Norm]

You’re talking about oil prices and costs like it’s theoretical, I’m talking real world.

There is no world where an oil company is extracting “one barrel of oil.”

I won’t bother with my resume, but let’s just say that I studied this in school. I’m not talking about fixed vs variable business expenses nor need an explanation on how those things work.

When I said that extracting oil is a “fixed cost,” for the sake of this argument, what I meant is that the cost of extraction doesn’t care what the demand for gasoline is.

If it’s $75/barrel to drill offseas or $50/barrel to drill on land, that cost doesn’t change based on market demand. If anything at some point of low production, like we both have stated, that cost will go up!

There is a point where they stop drilling because the cost to drill is more than what they can sell the oil for. We have seen this with offshore drilling in recent years.

Why was I making this point? You stated that if gas demand goes down that the costs would go down for oil companies. Simply not true. Those drilling costs would be unchanged (ie fixed).

Drilling costs are not fixed, that is a fact (e.g. labor costs are never fixed). I've supplied you with factual citations and you have supplied opinions. Hard to come to a consensus when only one participant supplies third party confirmation of their position.

 

[Mach1E]

Drilling costs are not fixed, that is a fact (e.g. labor costs are never fixed). I've supplied you with factual citations and you have supplied opinions. Hard to come to a consensus when only one participant supplies third party confirmation of their position.

Trying to avoid teaching an economics class on a car forum here.

None of what you posted have supported your statement that drilling costs would go down if gasoline demand goes down.

You’ve even now in recent posts pointed out that they would go up.

I just explained what I meant by “fixed,” but I’ll try again.

If it costs $75 per barrel to drill oil in the Gulf of Mexico, it still costs $75/barrel whether gasoline demand is high or low. It still costs $75/barrel if oil prices are high or low.

The cost per barrel to drill is in that manner “fixed.”

Now the part that you are confusing (because they’re different uses of the word “fixed.”) is fixed vs variable expenses.

And the expense of drilling (not cost) actually is a variable expense (not cost) for the company.

X amount of barrels drilled times $75 per barrel = the variable expense for the oil company.

Since you brought up labor costs, I’ll use that analogy as well. I could say the labor costs per hour are “fixed.” IE $50/ hour. If the union has a $50/hr contract. That number won’t change. But yes, labor is a variable expense. $50/hr is unchanged (fixed), but the amount of hours is variable.

But for the sake of the point I was making, is the $75/barrel to drill that is fixed (or actually can go UP).

It doesn’t go down like you previously stated with lower demand for gasoline.

Separate point I was making was when you brought up supply/demand. That is about consumer prices not manufacturers cost. And gas prices don’t follow those rules. If they did, gas would get cheaper just because we drive less. Instead, it’s driven not by consumer demand, but by so many factors outside our control. We drive slightly less when prices skyrocket…….but that doesn’t lower prices for us.

 

[Mach1E]

Cost vs price vs expense

fixed vs fixed vs variable

This is just an example of why the English language is so complicated.

Because of our use of synonyms and homonyms, it takes 3 pages to explain which version of the same word you meant due to context. ?

 

[bbulkow]

All of the discussions here about supply and demand and economics miss the actual point.

The reason free-to-air ICE is cheap, in any system, is a hidden cost is "free" - polluting to the atmosphere.

In general, we have gummints to cost the hidden costs like this, and make regulations to create markets around these costs and fold them into the economy (when the current "western" democratic / republic / capitalist system is working well, which sometimes it does and sometimes doesn't ).

This shared resource - our atmosphere - turns out to be a crucial limiting factor. More limited than landfill space, more limited than our ability to extract fossil fuels. All science has been clear for decades - since about the 1970's when Exxon did its amazing ocean measurements and predictions that predicted climate change in 2020 correctly to a tenth of a degree - that the costs of continuing carbon emissions would be high indeed.

One of two things will happen.

Either our government - and the world governments - will fold the cost of carbon (CO2 and Methane) pollution of the atmosphere into all economic cases, in which case the free markets will work to solve the problems of carbon pollution efficiently in ways that we may not yet predict, but it'll get solved,

or,

we'll continue with the fossil fuel system pumping CO2 and Methane into the atmosphere, and we'll have grave consequences, not of all of which can currently be predicted. It will include disease, war, famine (stated crisply by the current ICCC report). Some of those consequences are already apparent - like the Ukraine war - or the increases in insurance prices in california - or the increases in drought and famine leading to higher food prices - decreases in lifespan due to increased diseases (covid) - and some are coming.

The reality will probably end up being some half-assed combination of the two cases, because humans and human unions (economies and governments) are imperfect.

Your ability to buy gas and keep your ICE cars running will depend on which path the world takes. If we take the first path, it'll perhaps be uneconomical for you to buy gas and burn it to the air, or there will be an add-on to capture the carbon, or you won't be able to afford the cost of pulling the carbon back out, or maybe you will because it's your favorite hobby. If we take the second path, what we call today "supply chain disruptions" will start hitting the entire economy, and *everything* will get more expensive (especially food), consequences like being drafted into a war may happen, refineries might shut down, leading to running your ICE vehicle being the least of your worries.

Supply and demand will happen, but pretending that our current costings will continue in the face of our clear knowledge of this shared cost is foolish. We have a "tragedy of the commons" of a limited, shared resource which is not currently priced. If the cost of carbon pollution is priced into the economy well (everywhere, including industrial transportation, steelmaking, etc) the world will be likely be a very different place than it is today.

In my opinion of course.

 

[Old_Norm]

Trying to avoid teaching an economics class on a car forum here.

None of what you posted have supported your statement that drilling costs would go down if gasoline demand goes down.

You’ve even now in recent posts pointed out that they would go up.

I just explained what I meant by “fixed,” but I’ll try again.

If it costs $75 per barrel to drill oil in the Gulf of Mexico, it still costs $75/barrel whether gasoline demand is high or low. It still costs $75/barrel if oil prices are high or low.

The cost per barrel to drill is in that manner “fixed.”

Now the part that you are confusing (because they’re different uses of the word “fixed.”) is fixed vs variable expenses.

And the expense of drilling (not cost) actually is a variable expense (not cost) for the company.

X amount of barrels drilled times $75 per barrel = the variable expense for the oil company.

Since you brought up labor costs, I’ll use that analogy as well. I could say the labor costs per hour are “fixed.” IE $50/ hour. If the union has a $50/hr contract. That number won’t change. But yes, labor is a variable expense. $50/hr is unchanged (fixed), but the amount of hours is variable.

But for the sake of the point I was making, is the $75/barrel to drill that is fixed (or actually can go UP).

It doesn’t go down like you previously stated with lower demand for gasoline.

Separate point I was making was when you brought up supply/demand. That is about consumer prices not manufacturers cost. And gas prices don’t follow those rules. If they did, gas would get cheaper just because we drive less. Instead, it’s driven not by consumer demand, but by so many factors outside our control. We drive slightly less when prices skyrocket…….but that doesn’t lower prices for us.

Again opinions, not facts supported by citations. Unfortunately you are equivicating, i.e. you claimed people didn't cut back on gas usage when prices rise. I showed you they did and you switched to gas prices not going down when consumption is reduced. You have confused fixed cost with variable costs, then try and excuse that error with rhetoric about cost pre hour. As the saying goes, you are entitled to your opinions but you are not entitled to your facts. Get back to me when you can back up your opinion with verifiable facts.

 

[RickMachE]

Just a price point on 19 Sep 2024. Valdosta Ga EA price was $.56 WITH the pass. FPL in St. Augustine at Gates was $.33. I will be avoiding EA as much as possible.

EA app shows Valdosta at 56 cents BEFORE the 25% pass discount, which would bring it to 42 cents. I looked it up because I have never seen EA higher than 64 cents, which is 48 cents with discount, so your 56 cents grabbed my eye.

I have charged at a few FPLs in our travels. The one at Wildlight had no restroom or anything, but they were building a Wawa there. Chargers had smashed glass every time we went.

 

[YeOldeTraveller]

I interrupt the amazing commentary to respond to the original post (and some comments directly related to it.)

On my return trip from Colorado, I was running into some strong winds in Nebraska. I was running at 75 mph, and the winds were 25+ mph. The Trip efficiency for the segment most directly into that wind was 1.9 miles/kilowatt-hour. This is a 2024 MME Rally, so it will be a bit more impacted by wind than most other MME.

Assuming 80, or so, mph in Texas with a head wind, and 1.9 mi/KWh is to be expected.

 

[bbhaag]

So getting back OT.......I just completed a 950 mile trip from Peoria IL to Cleveland OH and back for work . The week before I did a 545 mile trip from Peoria IL>Galena IL>Wisconsin Dells>back to Peoria. This is only a few of the longer trips I've taken so I'm WELL versed on it but even I have to admit that longer trips can get tiresome because of the charging and need to plan ahead.

BlueCruise helps mitigate some of that but only does so much before you're just ready for it to be over. Using ABRP and PlugShare is definitely helpful and should be used by everyone taking an EV on longer trips but even then you have to account for the unexpected like inoperative or full charging stations.

I'm not saying I agree with @Riotous wholeheartedly but I can certainly empathize with his frustrations.

 

[heisnuts]

@RickMachE



This post is entirely the point. Here's a Mach E owner that's had the car a while, and despite that, had a poor road trip experience. That's an experienced EV owner. The average consumer doesn't want to have to do all the nerd math like us big brains. They want to get in the car and go. If you think you're gonna reason with the average consumer on a vehicle purchase, you got another thing coming.

Until infrastructure is so ubiquitous as to be able to DC without having to plan your stops, you're going to get arguments like the OP's and the people he's referencing.

On that end, the fuel cost is merely a defensive excuse. It's not grounded in reality. The real reason is the need to plan and pivot because of the infrastructure. It's like when gas goes up and people go trade in their paid off car to save money on gas. Most of those people don't want to save money on gas, they want a new vehicle and are using the fuel economy as a bridge.

One day we'll get there, but that day is not right now.

The post above is spot on. At least once a year my wife and I do a road trip 400 miles each way. We have done this trip in our Tesla Model 3 and Lexus RX350. I do not mind the planning and 2 stops (one in each direction and full charge at the hotel), but my wife much rather prefers the Lexus due to the planning and stops needed.

To me the cost difference is not a big factor. The biggest factor for me is the comfort and convenience. The Tesla is a lot more convienet to me vs the Lexus due to the self driving functionality and preconditioning feature (just to mention the top two). Our destination was in Idaho where temps were in the high 90's. I cannot tell you how nice it was with the Tesla to come to a cooled down car after being out on the water.

The funniest part of our last trip where we took the Lexus to appease the wife, is when we were still 3 hours from home and the check engine light came on (which turned out to be for a VVT solenoid). The time we had to take to have the codes read and get back on the road just about equated to what a charge stop would have been on the Tesla. That and the wife would not have been concerned for the last 3 hours of the trip with the check engine light solid on the display with warning messages flashing as well. Naturally, I pointed out we would not have had such a problem with the Tesla, but that did not go over too well .

 

[Mach1E]

Again opinions, not facts supported by citations. Unfortunately you are equivicating, i.e. you claimed people didn't cut back on gas usage when prices rise. I showed you they did and you switched to gas prices not going down when consumption is reduced. You have confused fixed cost with variable costs, then try and excuse that error with rhetoric about cost pre hour. As the saying goes, you are entitled to your opinions but you are not entitled to your facts. Get back to me when you can back up your opinion with verifiable facts.

That isn’t what I’ve said nor what I’m saying at all.

And no, I didn’t say that people didn’t cut back on driving when gas prices rise. (They did, a little).

My point on that subject was that people cutting back when gas prices rise doesn’t make gas prices automatically fall.

It was on the list of points as to why gas and oil don’t follow normal supply/demand rules.

These aren’t just opinions, these should be well known facts at this point.

And no, I’m not going to spend hours citing sources. You could spend years studying the oil market and still learn something new every day.

I’ve explained what I meant, explained as simply as I can that if gas demand goes down, that it WILL NOT make it cheaper to drill for oil.

If you disagree with that last sentence, we will have to just agree to disagree. Feel free to research the why behind it if you are still curious.

 

[Mach1E]

One more thing. Here's an example of how your opinions are not factual. You said, "And gas prices don’t follow those rules. If they did, gas would get cheaper just because we drive less."
Gas does get cheaper the less we drive.
U.S. gas prices falling due to weak summer travel demand, experts say.
https://www.pbs.org/newshour/nation...-due-to-weak-summer-travel-demand-experts-say

Did you read the article or just the headline?

This is just another example of a headline that disagrees with the article.

The article lists a whole bunch of factors that impact gas and oil prices with cause and effect……. that aren’t demand based.

They say “fewer drivers MAY be hitting the road…. Other contributing factors COULD be the increased number of fuel-efficient cars, as well as electric vehicles”

The “May” and “could” are important. Because those are opinions and you want facts.

Then they did add facts like the Biden admin releasing the supply of oil and “Oil prices can be volatile and hard to predict because they’re subject to many global forces. That includes production cuts from OPEC and allied oil producing countries, which have previously contributed to rising energy prices.”

Remember what I said about OPEC earlier?

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