Guest Column

Houston expert: How to make the EV switch while factoring in impact, cost

Very often, EVs drive like new even if they’ve clocked up the miles, writes this Houston expert. Photo via Unsplash

Americans are in the midst of getting to know electric cars up close and personal. The finer points of charging and battery technology are now becoming mainstream news.

However, there’s a secret about electric vehicles (EVs) that very few people know, because very few people have driven an electric car with 50,000 or 100,000 miles on it. Very often, EVs drive like new even if they’ve clocked up the miles. No rattles and no shakes, and importantly there is no loss of efficiency, unlike gas cars which tend to lose fuel efficiency as they age. Most strikingly, battery degradation and loss of range is often minimal — even after the odometer hits 6 digits.

What does this mean? At a time when car payments, repair costs and gas prices are all weighing on consumer wallets, we are about to enter an era when it will get easier than ever before for Americans to find a great driving, longer lasting car that saves on fuel costs and needs less maintenance.

This represents an amazing source of value for American drivers to be tapped into - plus even more positive changes for the auto sector, and the potential for new business models.

Narratives about EVs have focused on fears about battery degradation and today’s models becoming dated as technology rapidly advances. The fact that we are all habituated to replacing smartphone batteries that fade within 2 to 3 years doesn’t help.

Auto manufacturers have put 100,000 mile warranties on batteries, but this may have created the perception that this is a ceiling, rather than a floor, for what can be expected from an EV battery.

EV batteries are performing much better than your last smartphone battery. We know this with growing certainty because it’s backed up by evidence. Data reveals that older Teslas average only 12 percent loss of original range at 200,000 miles — double the warranty period.

Furthermore, battery advances are happening at an encouraging pace. You can expect that newer batteries will start with higher ranges and degrade even more slowly. And even after they do, the value shorter range will increase as charging infrastructure matures.

In other words, a 2024 Volkswagen ID.4 with 291 miles of range may be down to 260 miles by the time it has put on 100,000 miles. But in the 5 to 7 years that typically takes, the buildout of charging stations means that range will have much more utility than today.

So in sum, electric vehicles can be expected to last longer with lower maintenance. Over-the-air software upgrades, and perhaps even computing hardware upgrades, will keep them feeling modern. Charging infrastructure will improve much faster than range will degrade. And crucially for the value of these cars, the drive quality will remain great much further into product lifetime.

The trend for driving older cars is already here – the average age of a car on US roads is 12 years old and rising. But now this will shift towards better quality, plus fuel savings, for more people.

New business models and services will help customers take advantage — especially those customers for whom lower cost EVs will represent a step up and savings on the cost of living.

At Houston-based Octopus Electric Vehicles, we are doing this today with something virtually unheard of: leasing pre-owned cars. With electric cars that are 1 to 4 years old, with clean histories and in excellent cosmetic and mechanical condition but depreciated relative to new EV prices, we are frequently able to offer discounts of 30 percent or more, even against heavily incentivized lease offers from automakers. And, because EV maintenance needs are lower, we can throw in free scheduled maintenance with our monthly payment, delivered by a mobile mechanic service.

The secret value of higher-mileage EVs won’t stay secret for long. There’s no replacing first hand experience, and you can probably get that the next time you order an Uber or Lyft by choosing their EV ride options. Before your ride is up, try to guess what’s on the odometer. You may be surprised to hear from your driver that the car you thought was brand new has 50,000 or 100,000 miles on it.

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Nathan Wyeth is the United States co-lead at Octopus Electric Vehicles.

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A View From HETI

Lydian Energy has secured financing for three battery storage system projects in Texas. Photo via Getty Images.

The Electricity Reliability Council of Texas’ grid will get a boost courtesy of Lydian Energy.

The D.C.-based company announced the successful financial close of its first institutional project financing totaling $233 million, backed by ING Group and KeyBank. The financing will support three battery energy storage system (BESS) projects in Texas.

Lydian is an independent power producer that specializes in the development, construction and operation of utility-scale solar and battery energy storage projects. The company reports that it plans to add 550 megawatts of energy—which can power approximately 412,500 homes—to the Texas grid administered by ERCOT.

“This financing marks an important step forward as we continue executing on our vision to scale transformative battery storage projects that meet the evolving energy needs of the communities we serve,” Emre Ersenkal, CEO at Lydian Energy, said in a news release.

The projects include:

Pintail 

  • Located in San Patricio county
  • 200 megawatts
  • Backed by ING

Crane

  • Located in Crane county
  • 200 megawatts
  • Backed by ING

Headcamp

  • Located in Pecos county
  • 150 megawatts
  • Backed by KeyBank

ING served as the lender for Pintail and Crane projects valued at a combined total of approximately $139 million.

KeyBank provided a $94 million financing package for the Headcamp project. KeyBanc Capital Markets also structured the financing package for Headcamp.

The three projects are being developed under Excelsior Energy Capital’s Fund II. Lydian’s current portfolio comprises 20 solar and storage projects, totaling 4.7 gigawatts of capacity.

“Our support of Lydian’s portfolio reflects ING’s focus on identifying strategic funding opportunities that align with the accelerating demand for sustainable power,” Sven Wellock, managing director and head of energy–renewables and power at ING, said in the release. “Battery storage plays a central role in supporting grid resilience, and we’re pleased to back a platform with strong fundamentals and a clear execution path.”

The facilities are expected to be placed in service by Q4 2025. Lydian is also pursuing additional financing for further projects, which are expected to commence construction by the end of 2025.

“These financings represent more than capital – they reflect the strong demand for reliable energy infrastructure in high-growth U.S. markets,” Anne Marie Denman, co-founding partner at Excelsior Energy Capital and chair of the board at Lydian Energy, added in the news release. “We’re proud to stand behind Lydian’s talented team as they deliver on the promise of battery storage with bankable projects, proven partners, and disciplined execution. In the midst of a lot of noise, these financings are a reminder that capital flows where infrastructure is satisfying fundamental needs of our society – in this case, the need for reliable, sustainable, domestic, and affordable energy.”

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