How do you measure return on investment (ROI) for an electric bike?

Question

As we consider an e-bike vs. a car purchase, I'm trying to assess return on investment (ROI). My cost factors are, in order of priority, time, money, and carbon footprint.

My commute

• I travel 20 miles daily, 5 days/week, over moderately hilly terrain in a temperate zone with four-season weather.
• I drive a ten-year old car that gets 45 mpg and has low annual maintenance costs.

Car costs

• The car trip takes 20 minutes on avg., so time cost is 40 minutes/day, 178 hours/year, or 37 days in 5 years.

• At a fuel cost of $2.30/gal, daily fuel cost is $1.02, or $267/year.

• To buy another car like the one I own, according to Kelly Blue Book, I would pay $3,250. For sake of argument, I'll assume the car will last five more years.
• Insurance costs are $552/year.
• Maintenance costs include oil and filter changes and unexpected repairs. On average this has been about $800/year.

• Cash outlay the first year is $4,869. Subsequent years would be $1,619. Estimated five-year financial cost is $11,345.

• Estimated carbon footprint is 2,296 lbs of C0₂, or 11,480 lbs in 5 years.

E-bike costs

• Testing e-bikes, trip time is ~40 mins. Daily packing prep time, a shower, and a clothes change add 25 mins. Normal time cost is 105 minutes/day or 467 hours/year.
• Because of weather, I can't bike-commute daily. Of the 267 work days/year, I'll Uber on 30 of them. At 20 minutes per trip, Uber time is 20 hrs per year.

• Adjusting for Uber, annual time cost is 435 hrs, or 90 days in 5 years.

• With moderate motor assist, I consume approximately 300 Wh of electricity daily. Cost per kWh is $0.13, so fuel cost is $0.04/day or $10/year.

• Speaking to local bike shops, the high side of annual maintenance costs is ~$150.
• The e-bike I'm considering costs $3,000. Adding high quality waterproof panniers ($150), a pump ($20), tube ($5), seat post bag ($10), rain jacket ($100), lock ($50), and clothing ($300) brings the kit cost to $3,635. I will not add additional insurance.

• Uber costs $22/trip, so 60 trips per year (30 days) is $1,320.

• Adjusting for Uber days, cash outlay the first year is $5,115. Subsequent years would be $1,480. Estimated five-year financial cost is $11,035.

• For the bike alone, estimated carbon footprint is 110 lbs of C0₂/year. Adjusting for Uber rides (265 lbs/yr), that translates to 363 lbs/yr, or 1,813 lbs for 5 years.

Over 5 years, the car is >2x better in terms of time. The e-bike + Uber mode breaks even with the car in terms of money. The e-bike + Uber mode produces less than 1/6th the CO₂.

I'm not surprised about the time or carbon footprint, but I thought the finances would look more attractive. Where am I making incomplete or unsafe assumptions, and how should I modify these calculations?

Answer 1

Summary: I think your calculations are correct for the most part, but unfortunately ignore the health benefits which might actually be staggering but hard to quantify.

Main Thoughts

1. Consistent daily exercise is definitely a positive that should be factored in.

   • Do you exercise when you drive? If not, the health costs of not getting cardiovascular exercise needs to be factored in.
   • Over your lifetime this positive externality from regular daily exercise could translate to a huge financial savings (if you do not have good medical coverage) as well as quality of life. I would suggest this is a major component being missed
   • Cycling to work: major new study suggests health benefits are staggering

     We found that cycling to work was associated with a 41% lower risk of dying overall compared to commuting by car or public transport. Cycle commuters had a 52% lower risk of dying from heart disease and a 40% lower risk of dying from cancer. They also had 46% lower risk of developing heart disease and a 45% lower risk of developing cancer at all.

     Original journal article: Association between active commuting and incident cardiovascular disease, cancer, and mortality: prospective cohort study

2. I think the bicycle maintenance is underestimated. I would be surprised if a battery pack will last 5 years. Depending on the batteries used you have anywhere from 300-1000 full cycles. If you need to charge daily you will do about 200-230 full battery cycles a year. This could mean 1-4 batteries over 5 years depending on the quality of the battery that comes with the bike. The cost of a new battery pack can be as high as $800.

3. I think your car maintenance is underestimated. Most years may be $800, but once in a while you get a $2000 repair bill (e.g., new clutch). This is why most car calculators use a higher value for yearly maintenance.
4. In terms of lost time, do you not shower when you before work if you drive? If so you should subtract that from the bike time cost.
5. In terms of trip time on the pedelac you said it is a 28 mph (45 kph) pedalec, yet your average speed is down at 15 mph (24 kph). I would have figured it would be 21 mph (35 kph) average for a per trip time of 27 minutes (54 minutes per day). Lets call that 1 hour to be conservative. Do you spend at least 20 minutes a day exercising if you drive? If so you are already even on the time spent.

Other Thoughts

For the e-bike + Uber option, Uber is costing you $6,600 or 59.8% of the total cost ($11,035). That is crazy for 30 days. Are there other options such as car pooling?

I think your sunk cycling costs are right (despite comments that suggest otherwise). Even if you found cheaper e-bike, lets say half of $3000, that is still only 10% of the total outlay.

Bicycles are relatively simple machines, but cycling is not necessarily a cheap activity.

Answer 2

It's only so expensive because you are going for the most expensive bicycle option on the market. One could easily buy an $800 bicycle and spend $1000 on retrofitting a motor and battery and end up spending a lot less on the bike, or you could just ride the $800 bicycle without the motor, and save even more money. You're spending as much on the bike as it cost you to buy a car, plus you are using Uber when not on the bike. Most bicycle commuters will use public transit (bus or subway) when the weather doesn't permit riding. You aren't going to save much money when you spend $3500 on a bike and related accessories.

Answer 3

I started questioning your assumptions in the comments, but then realised that was what you were looking for in an answer.

To me (regular bike commuter over similar distances) a lot of your estimates seem high, and some low. Reckon more on tubes, but that's way too much on clothing. I suggest cheap hiking trousers (the quick drying sort or gym shorts, and gym tops. You may anyway have some. If you're into lycra that's fine but you don't need to spend a fortune on bike specific stuff. A bike rain jacket can be had for probably $30. What weather stops you riding? Why? How did you get to 30 days? Why Uber on those days?

25 minutes /day is a lot on prep /showering. Without a shower I reckon <5 minutes to get my bag ready, <5 minutes to get changed. A shower - if you need one - only adds 5 minutes to the changing time. I've often been able to start my work PC up then get changed while it's useless - it depends on the workplace.

Reckon on doing some maintenance yourself. Little at first but more later. It can save time compared to getting the bike to a bike shop (unless you're lucky with where your bike shop is). This will save money.

Would you be able to get rid of the car completely? Shopping? That's an expensive e-bike. Consider what happens if you don't get on with it - resale value? How high is the risk of theft with just a $50 lock where you are?