A Look At The U.S. Cities Where Electric Cars Make The Most Dollars And Sense

NOV 10 2015 BY MARK KANE 19

Georgia Power rolls out new fleet of EVs, pictured here in front of its Atlanta headquarters

Georgia Power fleet of EVs

The International Council on Clean Transportation (ICCT) analyzed the household financial perspective of buying an all-electric car in the 25 largest U.S. metropolitan areas.

The graph is not up-to-date, as ICCT took policies in place at the end of 2014 to be consistent with previous reports, but it sure provides us with the general outlook.

According to the report, despite $5,000 to $15,000 higher costs compared to non-electric cars, fuel and maintenance savings supported by incentives brings effective cost of six-year ownership below ICE cars in at least several places in the U.S.

“Our recent paper on electric vehicle promotion activities in U.S. cities quantified various direct and indirect benefits of owning and operating BEVs. Since publishing that paper we’ve continued analyzing the total operating costs of BEVs. One thing we’re finding is that over a six-year period a typical BEV requires about $5,000 less in fueling costs than a non-electric counterpart (i.e., charging from the grid versus filling up on gasoline). This valuation is based on a few key assumptions: typical BEV fuel economy (miles per gallon-of-gasoline equivalent) is more than three times greater than comparable gasoline models, and average 2014 fuel prices are 11 cents per kWh of electricity and $3.48 per gallon of gasoline. We are also finding that over the same timeframe, a typical BEV requires about $1,700 less in maintenance costs, largely due to the simplicity of electric powertrains.”

Besides fuel and maintenance savings, there are other direct and indirect benefits:

  • federal tax credit up to $7,500
  • state rebates up to $5,000 (Colorado)
  • exemptions from annual taxes or registration fees
  • home charger installation support
  • public charging infrastructure
  • carpool lane access
  • local parking benefits

Some states introduced rebates several years ago, others launched them recently or ended them (like Georgia, which earlier pushed Atlanta to first place).

The best situation was in Atlanta, Denver, Los Angeles, and San Francisco, where cost of EV ownership were second to none.

“The other 21 cities have total six-year ownership costs that are higher than the comparable non-hybrid, but lower than that of the hybrid. Clearly, policy incentives play a major role in reducing the cost differential between electric and non-electric vehicles.

To date, technology development and fuel costs have helped reduce the total cost of owning and operating a BEV, which is now less than that of a comparable gasoline model in some cities. Studies suggest that BEV costs may fall further; battery and manufacturing costs, which make up a significant share of total vehicle cost, are decreasing at about 6% each year, according to the National Research Council and other recent research.

But public policy support has also been crucial to achieving that cost parity, or superiority, as the chart shows. And extension of federal, state, local, and public utility BEV promotion policies will be crucial for continued growth through 2020. That’s one reason why the recent formal launch of the International ZEV Alliance – a consortium of governments which aims to accelerate global adoption of electric and other zero emission vehicles by setting ZEV targets, sharing data and best-practice government actions, and increasing education and awareness – is such an encouraging sign.”

Source: ICCT

Categories: General

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19 Comments on "A Look At The U.S. Cities Where Electric Cars Make The Most Dollars And Sense"

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Can anyone help me understand that graph? It appears that driving a 34MPG gas car is cheaper per mile than driving a 50MPG hybrid.

Hybrids are still a bit more expensive to buy and that cost is probably amortized over the 6 years. No mention of maintenance costs…

Never mind, they do mention them 🙂

vdiv is correct. They aren’t using the median gas vehicle for the non-hybrid vehicle that would get around 25 MPG.

Instead they are using smaller, cheaper vehicles. Ones that average around 34 mpg. So think of vehicles like this:

Toyota Yaris
Honda Fit
Chevy Spark
Mazda 3
Toyota Corolla
Ford Focus
Dodge Dart

Vehicles that are priced significantly lower than EV’s. They also likely don’t have anywhere the same standard features that most EV’s have either….

If they actually also listed a theoretical median vehicle of $30K with 25 MPG, the effective cost of ownership would be much higher. But I think they wanted to avoid trolls attacking their study by saying that typical US EV’s are smaller than the median vehicle in the US.

This analysis is fundamentally flawed. As someone who’s been driving an EV since 2011 I can tell you that buying a new EV is stupid. The technology is getting better and cheaper every year and the re-sale value on EVs is horrible.

It’s much cheaper to operate an EV if you lease it. If you MUST buy an EV, buy a used one. They are all low mileage. People who love their EVs keep them. People who simply can’t overcome their range anxiety usually trade within 6-8 months of driving one. Their loss is your gain, as most EVs after a year or two are 1/2 to 1/3 of their original price. Mathematically buying one used is better than buying one new and taking the credits.

+1

The analysis is also fundamentally flawed because it doesn’t use the actual electricity rates in each city, and it uses the 2014 average price, $3.48 per gallon, for the cost of gasoline. They should use the actual cost of electricity in each city, for example $.31/kWh in NYC. They should also show the total cost of ownership for hybrids and non-hybrids at both the average 2014 cost and the much lower current cost in 2015.

But they just slapped this together in 15 minutes to sell an article. Doing all that would be work. 😉

I wouldn’t consider buying EV’s as being stupid. Leases do not work well for people that drive a lot of miles. I am on track to put 24K/year on my model S and did not have an option to lease with that many miles through Tesla. I also bought my 2012 Volt and paid $26K after all the incentives. I can probably sell it for $14K after owning it for 4 years, so that would be $250/month for a car with a $45K sticker. I am sure there are plenty of similar situations.

You could say the same thing about any car. A Honda Civic loses 30% of its value the moment you drive it off the lot too.

Actually, $6,000 is the maximum tax incentive. The actual incentive each individual car qualifies for is based upon the size of the battery and the initial MSRP for the base model of the car. Because of this, there are cars that won’t qualify for the full $6,000 incentive.

I’m guessing they must have taken that into account when they came up with the $5,000 tax incentive number?

Looking at the graph, it is clear that it’s based on outdated from data prior to June 2015.

eg: Atlanta great incentive on purchase that lowered cost of ownership, which was removed
eg: no mention of metro areas (states) that have added EV registration fees in 2014/15. These fees have added to the operation cost of an EV. (Seattle, Atlanta, etc)

This needs be set for real time analysis

From the original source:

“Studies suggest that BEV costs may fall further; battery and manufacturing costs, which make up a significant share of total vehicle cost, are decreasing at about 6% each year”

Consumers won’t see all of the reductions in manufacturing and battery costs as lower prices. Some of those savings will go towards larger batteries and making the vehicles profitable for car makers.

“2014 fuel prices are 11 cents per kWh of electricity and $3.48 per gallon of gasoline”

Neither is close to be true anymore thus the lower sales of EVs.

Not too many states are offering $0.11/kWh or lower in electricity cost these days.

The most recent info available at the U.S. Energy Information Agency, for August 2015, shows State electricity prices ranging from a low of 9.36¢ per kWh for Washington State, to a high of 19.20¢ for Connecticut… not counting the very high outliers of Hawaii and Alaska. The national national average is 12.93¢, and I count ten states with electricity prices lower than 11¢.

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

Assuming that Sven is correct in stating that whoever did this analysis didn’t bother to check gas and electricity prices for local areas, then the figures on the graph above are too inaccurate to be useful.

Data requires research

The comments here are hilarious. This data takes time to compile, folks. Getting it through 2014– which it clearly states — was probably enough of a headache for the ICCT. Who do you think funds this stuff? On that note, feel free to make a donation or offer other support for the ICCT. They’re the ones that caught VW with the diesel scandal, too.

+1