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Early Contenders for the Automotive X-Prize
longacre writes "With the official entry period for the $10 million Automotive X-Prize contest just around the corner, Popular Mechanics offers a preview of the most promising entries. Among the 100-mpg vehicles that Detroit (and Japan) have claimed impossible to build comes a hybrid designed by a class of inner-city high school students in West Philadelphia. Also displayed is a futuristic-looking electric model with a range of 300 miles. We discussed the beginning of this contest earlier this year."
Try to argue that, say, the Aptera is something that "some kids cobbled together". 45" crumple/deflection zone (designed to ride up and over in an accident, extending deceleration time). In-seatbelt airbags, like are used in small planes and are being used in some new luxury cars -- instead of exploding toward you, they explode upward from your lap, between you and the dash, and shield your whole body. F1-style roll cage (with only a couple hundred pounds of weight in the batteries and a composite skin, it's obvious that the frame comprises a large chunk of the Aptera's 1500lb weight), with double the NTSB standards for roof and door crush strength (and yes, they've tested it with a crush rig). It's been digitally crash tested from the beginning (like BMW and many other auto makers do nowadays), and will be physically crash tested this fall. Yes, they're not required to do crash testing, since it's a three wheeler; they're doing it anyways. ~7' wide front wheelbase and low-mounted batteries for rollover resistance, combined with aerodynamics to produce downforce at high speeds. And of course, tadpole trike configuration, not delta (which tends to produce oversteer).
Sure, it's not for everyone. With only 2+1 seating, it's not a "family car" (although their next model will seat more people); it's a commuter car. But as far as commuter cars go, I think it's a beautiful design. I can't wait to test drive it (test drives and factory tours are to start this summer).
"99 dead duelists of Dios on the wall. 99 dead duelists of Dios! Take one's ring, pass it around..."
I assumed anyone at slashdot could take the math the rest of the way and apply it to their situation but apparently you need some help with yer figuring.
Clearly you're not in finance. All of these mathematical calculations are wrong in the face of finance. By finance I'm not talking the terms banks and lenders throw around as a verb, I'm talking about the finance department of any company to compute the feasibility of a project or investment. For example everyone likes to use the "pay back period" as a financially sound way to compare two projects when it ignores a critical factor: the time value of money.
So now you claim the original post not to "take the math the rest of the way" when you've clearly got some issues in your math. To settle this, I'll do a decent job in taking the math all the way by giving you a fairly sound financial computation on net present value. I'm no finance person, but I've been in accounting and finance classes to know that your calculations are wrong and there are better ways. So since you asked, here is your math problem solved correctly.
There are two common ways to compare to streams of cash flows financially: internal rate of return, and net present value. The easier one to understand (and also with fewer math issues) is net present value. All net present value is is taking a stream of cash flows and calculating their values in dollars at the current point in time. As you know, a dollar today is not worth the same amount as a dollar next year due to inflation and other things. Net present value accounts for this by introducing the risk free interest rate into the equation so that you can get two sums of money to compare at a single point in time.
Before I go further, I need to say that dividing the fixed investment cost and time zero (today) over the lifetime of the investment is wrong for time value of money reasons. That is when you buy a car in pure cash today, you cannot receive the benefit of reinvesting that cash because it is gone! What you can do is say you spent X dollars at time zero and if at the end of the useful life, you sell the asset, then you will receive some money back but quite a bit less due to depreciation and market value at the point of sale.
In order to compute the net present value, all you have to do is take the present value of each year or month's cash flow and compute the present value of that item. So for example let's assume the risk free rate is 2.5% and because we don't care about the rate of return (this is not really an investment to make money, but to save money and fill a need), all we care about is the risk free rate. So today a dollar is worth $1. Next year the same dollar invested today will be worth $1 * (1.025 ^ 1) = $1.025. (You can also think in the other direction and say that a dollar in the future by one year is worth $1 / (1.025 ^ 1) ~ $0.97561 today.) As you might guess, a dollar invested today will be worth $1 * (1.025 ^ 2) = $1.050625. If we keep doing this for 5 years, the factors for each year are:
So let's do the real financial math to compare costs. In order to do this, we need to compute how our cash will flow for each investment. I will reduce the calculations to years since it is easier to show, but you could also do the calculations compounded by month if you wish by dividing the interest rate by 12 and recomputing the multipliers on a monthly basis (or use Excel's net present value function hint hint). We will also assume that both cars depreciate at a rate of 20% a year so in 5 years, they will be worth (1 - 0.20) ^ 5 = 32.768% of their initial value and we will find a buyer that is willing to pay that exact value for the asset at the end of the year. That means after 5 years we will sell the econobox at $4,915 (rounding off 20 cents) and the Aptera at $8,683 (rounding off 52 cent