Here’s Where Owning An Electric Vehicle Really Pays Off

MAY 9 2014 BY ERIC LOVEDAY 45

The folks over at Navigant Research recently put out this chart on “Fuel Costs Per Mile of Fuel, Select Regions: 2014.”

Though it’s not all-inclusive, it does show that wide variations exists in “fuel” costs depending on where one drives.

As Navigant states:

“One of the most attractive aspects of PEVs is that driving on electricity is significantly cheaper than driving on gasoline or diesel. While this is largely true in most markets, the price difference can vary significantly by market. The most meaningful variables in fuel cost returns are the retail price of petroleum-based fuels, the residential rates for electricity (since a vast majority of PEV charging is done at the owner’s home), and the average efficiency of new conventional vehicles compared to PEVs.”

In regards to the US, Navigant adds:

“Among U.S. states (average new vehicle mpg is now 25) the best returns are in Indiana ($0.11 per mile) and the worst are in Hawaii ($0.03 per mile). Given current government incentives, maintenance cost reductions, an annual vehicle mileage of 12,000, and an average $12,000 premium for PEVs, a battery electric vehicle (BEV) driven in Indiana nets a return in less than 4 years – twice as fast as one driven in Hawaii.”

So, yes it does matter where you live in regards to fueling costs and whether or not a plug-in vehicle is cheaper to operate than a comparable gas automobile, but by and large, the plug in wins in most locales across the globe.

Source: Navigant Research

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45 Comments on "Here’s Where Owning An Electric Vehicle Really Pays Off"

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If I lived in Hawaii, the first thing I would do is add a solar PV system to my house.

I’m really glad I don’t live in Nunavut … solar panels wouldn’t even help much there. BUT, maybe wind would be viable.

Maybe they need a seal blubber range extender.

Seal blubber is supply constrained due to environment regulations shutting down the seal blubber refineries. It would be much more convenient and affordable to run the range extender on unrefined live baby seals, seal blubber diesel if you will.

Sun never sets at summer solstice. In winter, they get Noneofit.

Nunavut consists of a few isolated Inuit communities (32,000 people), not connected by roads … I wouldn’t consider creating a market for EVs there a priority.

They’re waiting for the Tesla electric snowmobile to show up….

Actually, I seriously doubt that, since batteries are notorious for not working particularly well at -40 or -50. Not that anything is, really.

Solar PV is so popular in Hawaii that they have started to hit the issues that Germany has . . . a bit of difficulty making sure the grid is stable with so much PV added. As an engineering issue, it can be handled by reinforcing the grid in places with better transformers, storage, etc. But the real trick is that it starts to kill the utility business model.

The German grid has never been in any danger and the alarmist predictions of hell and doom that you have been reading for years have never panned out. They are nothing more than politically motivated attacks on renewable energy. Or energy companies trying to protect their monopoly. I’m sure you are familiar with the term FUD.

Adaptation is necessary, just as it was when people started buying refrigerators, tv’s, air conditioning. Did they run around in panic that they should put a stop to the sale of these appliances because they were threatening ‘grid stability’? The world is always changing and the grid has to change with it.

Here is good example that people have difficult time to understand economy as a whole. But they often look only simple one dimensional price information.

But it is wholly different thing for the economy to export oil from the Middle East than to locally produce electricity with roof-top solar panels. The price may be closely the same but the economic impact is very different.

This is one reason why price for the individual is often not very good indicator on determing what commodities are cheap and what commodies are expensive.

Other reason is environmental related external costs. The emissions from ICE cars are increasing health care spendings (diesel city buses are perhaps worst) and carbondioxide emissions are not very nice geoengineering experiment to have.

An also some people value low levels of traffic noise very high, although most people do not care about it. If you ask me I would ban the manufacturing of new diesel buses immediately due to noise pollution.

Don’t forget in the US, all of our tax $ for oil subsidies to keep those prices artificially low. And also don’t forget our huge DOD budget to make sure the oil keeps flowing in the world.

~kdawg+10

kdawg now has a karma level of 100…..

Oil is a global commodity with global market-based prices. US government subsidies for the US oil industry have little effect on US gasoline prices.

Our gas is comparatively cheap because our gasoline taxes are much lower than most of the world.

Our gas taxes are cheap because they use our income tax and sales tax to pay for things a gas tax should pay for.

And by oil subsidies I’m referring to the oil industry as a whole which includes providers, importers, refiners, distributors, etc. Corporate tax breaks along with subsidies = cheap gas.

I am not entirely convinced that so much of our taxes are being used to subsidize the oil industry.
In belgium one pays +- 48 % income tax and 21 % sales tax and they have no oil industry at all.

When’s the last time Belgium went to war with Iraq? And it’s not just the taxes they collect being spent, it’s the taxes they don’t collect from fossil fuel companies.

Here’s some pie chart comparing energy subsidies.

actually there were soldiers from Belgium in Iraq. UN and all

Want to compare budget #’s? How many troops are there now.. or for that past 2 decades policing?

http://en.wikipedia.org/wiki/List_of_coalition_military_operations_of_the_Iraq_War

You guys need to stop buying into the left wing party line and do a little of your own thinking

Japan sent PlayStations.

I’m not sure how that wiki page is supposed to answer kdawg’s point.

Perhaps it would make more sense if I watched more Fox News? 😉

Where is this graph from?

I would love to read a researched article that does the numbers comparing subsidies for gas companies, electric companys, and plug automotives. Have any been written yet?

I’m not getting the pay off numbers.
In Indiana .12$/mile X12000miles=1440$ in a year. So that’s 8.3 years to pay off 12000$ not 4 as stated in the article.

anyone concur?

also, if you assume 2.8 mi kwh (Volt) it means electricity is 7 cents/kwh in Indiana Is Indiana a big coal user? I think so but not sure.

I think subsidies have to be deducted from the $12,000 premium. They mentioned them in the assumptions.

Here in the UK Diesel is just over $10 a gallon ! (slightly different size gallon), Solar Panels are a must if your getting an EV so the payback is huge. Not sure what the price of a gallon is now in the US ?

Dr. Kenneth Noisewater

IIRC UK also has massive subsidies for solar. I reckon anyone owning a home there should put as many panels as they can fit on the roof or a patio in the back garden.

3.70 here in Florida

Are they comparing average car efficiency using gas to high-efficiency electric mode cars? That isn’t really a fair comparison. Nobody currently makes inefficient EV-mode cars or trucks. I think most PHEVs get at least 35mpg in gas mode.

If you are looking at fuel costs, you should compare the cost of driving cars with similar non-powertrain efficiencies. You should compare the Leaf to the Versa, not some average car. The PHEVs have an obvious comparison, because the same car can use both fuels.

Using my actual costs for my plug-in Prius, it costs about $5.20/100 mile in EV mode and about $7.00/100 mile in gas mode. This is for Massachusetts, where electricity is relatively expensive (almost $0.18/kWhr). Even so, electricity costs about 25% less than gasoline for driving.

I agree that averages aren’t the best, but neither is comparing a Leaf to a Versa (or a Volt to a Cruze as others have suggested). I have driven both Nissans and the difference is night and day. At least compare it to a car that drives/handles similarly.

Take into account maintenance cost differences and you make your money back even faster.

“Given current government incentives, maintenance cost reductions,”

Navigant leaves lots of room for slush, and there is no other explanation for how out of ratio some of the Petrol numbers are, vs. known gas costs.

Would you pay $400 to $1000 per gallon to fuel a US vehicle?

No joking, true story: http://thehill.com/homenews/administration/63407-400gallon-gas-another-cost-of-war-in-afghanistan-

So if you divide the $12,000 battery premium by the $0.11 per mile operating savings (in Indiana), you get to break even in only … 109,000 miles. Yeah, I think I’ll wait til battery costs come down a bit more.

Once again, don’t look at averages for any individual use.

In my case, our alternative car was a Subaru Impreza. At $22,000, it’s right at $10,000 less than we spent on our leaf.

Take the $7500 tax credit and the difference is only $2500.

The Impreza would average about 30mpg and we drive about 18,000 miles per year. That’s 600 gallons per year and the current price of unleaded here is $3.99/gallon for an annual fuel cost of $2,394.

The Leaf is rated at about 3.5 miles per kilowatt hour, and we pay $0.06 per kwh to charge overnight (let’s be really generous here and say we charge a lot more during the day than we actually do, bringing the charging cost to $0.08 per kwh. Using the same mileage numbers, we use 5,143 kwh per year and have an energy cost of $411.50.

I picked up the car at the beginning of October 2013. By my numbers, the fuel difference alone will have made up the price difference by January 2015. After that it’s gravy.

I also don’t expect you to accept a darn thing I just said, since you’re just here to reinforce how terrible EVs are in your mind.

Actually, I don’t think EVs are terrible. I think they are technological marvels, with a bright, probably inevitable, future. They are just not right for me yet. You also should not assume that anyone that has an opinion different than yours is obviously an idiot. Nonetheless, I’m glad they work for you in your situation.

I wonder what maintenance costs per year would be? Everyone knows it’s around 1k a year on average for an ice. I am sure it’s less than 1/3 of that, if that, for an ev. Just a no brainer to get an ev. But if you have no brain, well then just get an old technology, expensive to maintain, loud, polluting, and just plain uncool, ice. I understand the hybrid, but here, now you have even more things that can go wrong.

So what you are saying is that, 99.9% of car purchasers have no brain?

Here is my simple math:
ICE Rav4 = 32,000
EV Rav4 = 54,000

54000-32000 = 22000
22000/$4gal = 5500 gallons
5500g*22mpg = 121,000 miles before payback

Now, factoring in oil changes/tuneups, lets say 100k miles.

So, basically, until EVs come down in price, there is no real financial incentive for the average buyer.

They need to lower ev prices across the board to create “true” market movement/migration.

RAV4 EV actually retails for around $50K, minus federal and state incentives comes to around $40K. With only $8K difference, your calculations would come to 2000 gallons, or 44K miles. That’s a three year break even point, without counting reduced maintaince. EVs make sense, even when manufacturers don’t stand behind them.

These studies are interesting academic exercises, but that’s about it. Oil is going up. On average, year-over-year, it will continue to do so. Environmental damage (including resulting health issues) from the extraction, transport, refinement and end-use is not appreciably improving, nor is it reasonable to expect it to.

The bottom line is, if you can afford it, go electric.

It’s the economical and future-proof thing to do.

There was a interesting concept I was thinking about idea for a fan fiction having to do with EV’s Such as there is a mental picture I have about what if EV’s were able to come across a vast land mass with no gasloin powered cars or gas stations. Such as the biggest things EV’s face right now is a well built up infrastructure of gas stations and gas refineries along with oil wells. What if EV’s had a chance to roam free in a vast landscape were oil infrastructure was never built. A example of this would be you have a vast land mass that is 5000 miles across with towns and cities full of people who don’t own cars or trucks or have never seen them before. You have a aggressive company like Tesla who finds out about this place which is a dream come true no cars and no gas stations or oil industry. Along with no car dealers. Which basically you have a prefect salutation for the EV’s to take over with no natural competition. This happens in nature all the time when you introduce a species into a area it’s never been to before with… Read more »

Well I for one started making my money back as soon as I bought my Spark EV. I put down $9K which was paid back by selling my old ICE for $4,200, the CA State rebate of $2,500 and county rebate of $3,000 (notice I made $700 there, which I used to install a L2 EVSE) My payment for the Spark is less than I was paying for gas before PLUS the increased cost of electricity for charging it. I’m ahead about $.10 a month on that deal. And oh yeah, I haven’t even gotten the Fed tax credit yet.