How Much Does an Electric Car Really Cost?
Hey Everyone,
I’ve just been reading up on the Chevy Volt, Nissan Leaf, and other electric based vehicles that are going to be rolling out soon. Since I recently got rid of my car and currently am car-less, I’ve been curious about the cost differences between gas based cars and electric cars in regards to many things, such as how many miles can I go on the warranty, how many leisure miles do they give me, are the gas savings worth the premium on electric cars, and much more.
First, I used these as my values going in:
For this, Nissan says it will cost on average about $2.75 to charge the Leaf’s batteries to full. This is of course a big difference to gasoline where if we assume gas costs $3.00 a gallon, then to fill a 12 gallon car to full will run you $36. For the miles can travel before you get to empty, I assumed you run until you can’t move anymore, but obviously you won’t go 360 miles before you fuel up.
Nissan also gives a range on its miles it can go from 138 miles to 63 miles, I decided to take a really conservative look since 138 miles before needing to recharge is under super ideal conditions, and as you discharge and charge a battery multiple times, it will not hold as full a charge as when you first started driving. Also, when I was doing the calculations, I assumed New England weather, which has 4 seasons where with the Leaf, you would be using the air conditioner and heater during its life frequently.
Nothing too surprising there, of course electricity is cheaper than gasoline.
Fuel Savings?
Getting back to the actual money you save by using electricity to power your car rather than gasoline, I broke it down this way by using the values found in the first table I posted:
Using the same restrictions of refueling a gas car each every 360 miles for $36 and refueling the leaf for $2.75 every 75 miles for a total of 160,000 miles, you end up saving $10,133.33 on fuel costs. It is definitely evident that there are cost savings associated with driving an electric car vs driving a gas car.
Now let’s look at the cost of buying the car:
Nissan states that you can get a maximum $7,500 worth of rebates by buying an electric car. Using that as comparison to an average price of two 30+ mpg gas cars, the Ford Fiesta and the Honda CR-Z, you find that the base price for the most basic model of the Leaf is $9,635 more than the cost of the average price of the two 30+ mpg cars. Going back to the assumption that you’re driving the car for 160,000 miles, and you save $10,133.33 over using electricity rather than gasoline, we find that the net of the premium of buying electric and the fuel cost savings only net you $498.33 in savings.
This calculation surprised me the most. I thought the premium cost of buying a hybrid, electric, or other kind of non-gasoline consuming vehicle was offset by the fuel consumption savings. I was expecting this value to be much higher than the low $500.
The next calculation I did assumed that there was no tax rebate whatsoever:
This one again returned a surprising value to me. It turns out that the fuel savings of buying an electric car did not offset the premium of buying electric rather than buying a gasoline powered car. Buy choosing electric, you actually lose $7,001.67 on your decision (Again, assume driving 160,000 miles).
To put it graphically, these are the two options showing with or without the tax savings:
Driving Less than 160,000 Miles:
That case was with driving a hefty 160,000 miles over the life of a car. Let’s say you just drive the car 100,000 miles, how do the charts play out?:
What does it all mean and other notes:
Do not buy an electric car to save money on fuel costs. The premiums on buying an electric car over a regular gasoline powered car are simply not worth it unless you are planning on driving the car many miles (160,000+). Government rebates may not always be there for electrical cars, so that’s why I did the two extremes. Rebates help out immensely with the premium of an electric car, but still the premiums are very high. The calculations did not take into account switching from an SUV or other low MPG vehicle to an electric vehicle. A lower MPG vehicle would result in more savings from the fuel efficiency.
Also, there are other costs associated with running an electric car and running a gasoline car besides simply fuel costs. Gas powered vehicles have intake, exhaust, and engine systems which all have their associated maintenance and upkeep costs. An electric-powered car is not without its costs either. You have to recharge more frequently, may have charges associated with installing a charging station in your home (Nissan estimates it at least at a cost of $2000), possible premiums if you plan on using a charge station rather than using a home charge station ($2.75 to fuel up full at home compared to a higher price at a charge station), and battery replacement costs (How much will Nissan sell replacement batteries?).
The costs associated with having an electric car vs a gas-powered car also did not take into account resale value. Obviously you can recoup some of the premium you paid on an electric car by how much you resell, but there is no data on how much you can actually get on an electric car after x number of years. Just remember that it is a depreciating asset like all other cars and you should never buy a car thinking it is an “investment” of any kind.
Thanks for reading! I also posted the excel spreadsheet I used for your own purposes. If you see any mistakes, just let me know. I made the spreadsheet in about 15-20 minutes so I may have skipped on using the best cell references, etc.
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