Costs and Benefits of Solar Powered Cars

A new start-up company has developed an electric car that charges while you drive. The German company, Sono, largely funded development of the car through crowdsourcing. The vehicle is almost entirely covered with solar panels, which allows the car to charge while driving and parked outside. A benefit to constant charging is that it eliminates one of consumers’ biggest concern with purchasing fully electric vehicles: limited driving range. It also eliminates the need for electric charging stations (although this is still a charging option for the Sono vehicle), but it does mean the car is only available in one color: solar panel black. (The Ford Model T was also famously only available in black.) Priced at around $30,000, the manufacturers are hoping to compete with the Volkswagen ID.3 electric vehicle.

While electric vehicles help the environment through reducing carbon emissions, there are some other potential negative effects to a solar powered car. First, to charge, solar powered cars must be parked outside. If solar powered cars become widely adopted, cities and towns would have to devote much more space to surface parking. In most large cities, parking is already strained beyond its capacity. Also, solar powered and other electric vehicles rely on large batteries to store energy, which require metals and minerals like zinc and nickel. The mining industry is notorious for creating large amounts of pollution. Efforts to make mining operations clean and sustainable may prove to be very costly, pushing the price of electric vehicles out of reach of most customers, thus reducing the viability of a solar powered vehicle industry.

Questions/Discussion

1. Given that Sono intends to compete with Volkswagen, explain why economies of scale might present a significant barrier to entry. What strategies might Sono pursue to overcome these challenges?
2. Discuss some of the similarities and differences between the types of pollution caused by vehicle emissions and mining operations. What are some of the political/economic challenges associated with reducing each of these? [Hint: Consider the scope of where these types of pollutions are produced vs. whom they affect.]

Sources: Bloomberg Businessweek: “The $30,000 Sedan Covered With Solar Panels That Charges on the Go”; Goodreads “Henry Ford Quotable Quotes”; Freakanomics: “Parking Is Hell (Ep. 118)”; ST. CROIX 360 “Mining exploration near headwaters streams causes pollution concerns”; Bloomberg Green: “Mining Rare Earths for a Renewable Green Future”