Do Electric Cars Really Save You Money?

Whether an electric vehicle (EV), which is 100 percent powered by electrical sources, or a plug-in hybrid EV (PHEV) that runs on a mix of electric power and conventional gasoline, it seems every car manufacturer has a model on the market or is developing one.

Those who are environmentally conscious, and/or are hoping to save on fuel costs and/or who just think an EV or hybrid would be really cool to drive are jumping on the band wagon. However, when you consider factors such as the higher cost of the vehicle and the additional electricity cost used to keep it charged—other than the environmental benefits, which are unquestionably valuable, does it make financial ‘cents’?

Here are 5 things to consider:

1) Cost of Vehicle

This is where your luxury preferences come into play. You can go for the no frills, not too many thrills vehicle (new) for around $27K. But if you like all the bells and whistles and power equally as impressive, you could spend nearly and maybe even over $100K. And don’t forget that the more you pay for a vehicle, the more you pay in sales tax, insurance and registration fees.

The upside is that some states offer tax incentives, federal tax credits and rebates that can offset the cost of the vehicle.  However, these incentives vary from state-to-state and sometimes from county-to-county, so be sure to double check before you buy. Incentives may also be offered on a limited basis.

2) Cost of Gasoline vs. Cost of Plugging in

As we all know, gasoline prices fluctuate. When they are high, EV/hybrids make even more sense. But when they are lower and particularly if you don’t drive your car a lot, you won’t be saving all that much.

The cost of electricity does fluctuate depending on where you live but isn’t nearly as volatile as gasoline prices. Currently the average cost of residential electricity in the US in May 2018 was 12.8 cents per kWh[1].Therefore, the average person driving the average EV (which drives 3 miles per kWh) 15,000 miles per year, pays about $640 per year to charge it. By comparison, a gasoline powered car that gets 25 miles/gallon would cost $1704 to drive 15,000 miles assuming the U.S. average gasoline price in July 2018 of $2.84/gallon[2].

3) The Value of Your Time

Charging stations are popping up in apartment buildings, businesses and along roadways across the country with limited space availability. However, many charge a fee for the charge, which can also fluctuate depending on the speed of the charge. Each charge station owner sets fees according to their business model, i.e., as an employee, customer or tenant perk or simply as an additional income source. Charging an EV can take as little as 30 minutes or up to 12 hours depending on the size of the battery and the speed of the charging point. Just how far that charge will take you depends on the model you have selected as well as the speed, acceleration, wind, temperature, terrain, cargo, tire condition, accessories and other driving factors. Several EV models on the market have 200+ miles of range but you will pay more for those.  Therefore, if time is money, you need to calculate that in. You may not only need to add in the time it takes to charge the vehicle but how many times you’ll need to stop along the way to do so.

4) Cost of Maintenance

Because there are less moving parts in a true EV, the maintenance costs are less. Hybrids still carry the same maintenance costs as a gasoline powered car because they do have all the moving parts. It is important to check the warranty on the EV or hybrid you’re considering with regard to battery life though. If the warranty is limited and yours goes on the fritz, you could face a hefty bill to replace it. In fact, most experts agree a replacement battery can range anywhere from $1,000 to more than $6,000, depending on the year and model of car, and that doesn’t include labor costs.

5) Environmental Benefits

In general, EVs produce fewer emissions that contribute to climate change and smog than conventional vehicles, however unless you are powering your car with a renewable energy source that you can generate at home (such as solar, wind, or geothermal energy), you are still producing emissions, albeit less.

Emissions from all vehicles derive from the production, processing, distribution, and use of whatever powers the vehicle, commonly referred to as the “Well to Wheel” process. To obtain gasoline, petroleum must be extracted from the earth, refined, distributed and eventually burned in vehicles, sending CO2 into the air through the vehicle’s tailpipe.

EV emissions are factored by the electric power plants that produce them, and emissions associated with the extraction, processing and distribution of the primary energy sources they use for electricity production. The exact amount of these emissions depends on your electricity mix, which varies by geographic location. For example, in New York State, emissions associated with EV’s send an average of approximately 1,800 pounds of CO2 into the air per year, as compared to 11,400 pounds of CO2 for gasoline powered vehicles[3].

Therefore, the only way you can go 100 percent green is by powering your car with renewable energy. Many energy providers, including BlueRock, have options to purchase electricity from renewable resources. For more information about renewable energy options for your home, click here.

There’s much to consider when purchasing an EV or PHEV, but by contemplating moving away from gasoline powered vehicles, you’re obviously thinking ahead—as EVs are most definitely the ride of the future. Any and all of the EV downsides mentioned above will be worked out through advancing technology, making our decision easier.

[1] https://www.eia.gov/electricity/monthly/epm_table_grapher.php?t=epmt_5_6_a

[2] https://www.eia.gov/petroleum/gasdiesel/

[3] https://www.afdc.energy.gov/vehicles/electric_emissions.php

 

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