The cost of Electric Vehicles is a subject of some controversy, extending even to testimony before Congress. Automakers tend to lead with higher-priced luxury EV models, while the promised “affordable” models come later and tend to rise in price.
Yet still, according to research by San Francisco-based NGO Energy Innovation Policy & Technology LLC, owning an EV is still more economical than a comparable internal combustion vehicle, when accounted over the service lifetime of the vehicle. This should not be news to anyone following EV development — but there are wrinkles. Among the variables are the relative cost of gasoline, and what state you’re charging your EV.
Energy Innovation’s research looked at the average residential electricity rates by state, and then cross-referenced that information with EPA MPG equivalent (MPGe) ratings and estimated average annual mileage for drivers in that state.
Average electricity rates around the country range from a low of $0.10 per kilowatt hour in Washington and Idaho to a high of $0.33 per kWh in Hawaii. The vast majority of states enjoy electric rates at or below $0.15 per kWh. California, Alaska and the Northeast are above average, with prices ranging from $0.19 to $0.23 per kWh. Texas is a unique case because while the average cost of electricity is $0.12 per kWh, the state’s power providers can charge dramatically higher rates in periods of great demand.
Even in states with higher electricity prices, the value proposition of an EV is commensurately better in those states because the price of gasoline is also higher than average. California, for example, saw an average gas price of $5.76 per gallon in May, according to the Energy Innovation study.
Hawaii came in second with an average price of $5.27 per gallon. Georgia was lowest at $3.75. Consequently, when average gas prices are factored in, owning and driving an EV is the most advantageous, if not the lowest absolute price, in California, Colorado, Florida, New Jersey and New York.
Do you really need that Level 2 charger?
Energy Innovation also found that the vast majority of Americans can do their daily driving and recharge their vehicles adequately on basic 120-volt household outlet current, known as Level 1 in EV parlance. This is critical because about 80% of EV owners do their charging at home.
“The average single-car American household drives about 30 miles per day,” states the Energy Innovation paper, authored by Robbie Orvis. “Level 1 chargers can charge about five miles per hour, meaning just six hours of charge each day with a Level 1 charger could recharge an EV for an average daily drive. Even on a day with double the average distance, a 12-hour overnight charge would be sufficient.”
For those with longer commutes or shorter charging windows, a 240-Volt Level 2 charging solution can be installed in most single-family homes.
How much does it really cost to charge up?
As mentioned, the cost of operating an EV varies from state to state according to the electricity price, and the overall savings varies by average gas prices. It’s worth mentioning, though, that there are many free charging options, at least in the near term, around the country.
But, for the 80% of EV owners charging up at home, the most expensive EVs to charge are predictably those with the longest range and largest batteries. The Tesla Model S with 325 miles of range comes in as the most expensive, with an average full-charge price of $14.63 based on national average electricity prices.
The Tesla Model Y and Model X are second and third in the same estimation. By comparison, the least expensive option available in the US is the Nissan Leaf with 145 miles of range and an average full-charge price of $6.01.
Comparing apples to apples, the Energy Innovation paper states that in California the estimated monthly total cost of ownership of a Ford F-150 Lightning is $851, versus a gas-fueled F-150 XL at $1,021. This calculation includes the MSRP difference between the vehicles. The F-150 Lightning was estimated to be cheaper to own than the XL in all 50 states and the District of Columbia.
Similarly, the estimated monthly cost of owning a Nissan Leaf in California is $585 versus $620 for a comparable Nissan Versa. However, in low-gas-price Georgia, the Leaf costs $581 per month, versus $565 for the Versa. The difference is entirely attributable to the price of gasoline in the two states. In high-gas-price and high-electricity-price Hawaii, it would cost an owner $641 a month to drive the Leaf, compared to $600 to own the Versa.
The Energy Innovation paper details the relative costs of several comparable EV and gas-fueled offerings from Ford, Hyundai, Kia, Nissan and Volvo, by state. Bottom line: It’s not always cheaper to drive an EV in every state, but that has mostly to do with the variance in the price of gasoline.
OK, let us bill the BEV owners for the missing Road Taxes collected at the gas pump, and the lost sales tax collected at the pump, and reimburse us ICE folks for the tax money spent on public charging infrastructure. Let’s play on a level field here. Show us the cost of recharging at an unsubsidized recharging station, if you can find one owned, and operated by a private firm. There also needs to be a weight penalty tax on BEVs that weigh as much as 25% more than a comparable ICE vehicle, since the BEVs will beat up the roads more than their counterparts. While we’re at it, factor in the cost of winter tires since those super hard low rolling resistance tires have terrible cold weather traction, or do we factor in the added base vehicle cost for AWD just to get back to some modest level of traction in any weather. One more consideration: Since most BEVs will be charged outdoors, how much additional energy be consumed by the cold & hot weather climate controls that will prep the cabin to a pleasant temperature before a trip begins. Let’s add $1 / day for that convenience. Last time I looked, a Pelonis portable heater consumes up to 1.5kw. Hmm…. $300/year? Once again, lets consider all the costs.
Okay, Joe, let’s address the various points you raise:
1) A growing number of states now add new fees to cover lost taxes. I paid substantially more to register my new F-150 Lightning than you would have for a conventional F-150. In fact, several studies have concluded that such fees generally MORE than cover the estimated lost taxes;
2) There’s also growing interest in finding a more uniform road tax system that would eliminate fees at the pump and instead charge by the mile owners log. Tracking mileage would be extremely easy with OBD II sensors or the more advanced tech going into the latest infotainment systems;
3) Should we charge taxes based on weight v fuel consumption? So, a motorist using an F-150 Hybrid which is far more fuel-efficient but heavier than a comparable pickup model with a V-8 should pay more? This opens up a lot of challenges.
4) Taxes help pay not only for roads but other expenses. And that includes health and environment issues. So, on the flip side, can we come up with numbers that gas and diesel owners should have to pay to reflect the higher burden their emissions create?
5) The U.S. subsidizes the oil industry to a significant degree. Exxon pays virtually no taxes, certainly not for the size of its profits. And, if I recall, it gets something like $19 billion annually in subsidies. Should gas vehicle owners be specifically responsible for such expenditures? What about the estimated $200 billion in military funding that is, by general estimate, spent to protect our access to global oil?
6) And there are plenty of other ways that our dependence upon oil comes out of our taxes, whether or not we drive, whether we operate an ICE vehicle or an EV.
You might need to be careful as you could wind up owing money to your neighbor with the EV. And I haven’t even factored in the potential costs of continue to foster climate change. Just along the East Coast, cities like New York, Miami, etc., could be in for $100s of billions to avert the cost of rising ocean waters.
Do be aware, America has long subsidized new forms of transportation when it was deemed in the public good. That started with wagon trails and canals and, later railroads, air and, yes, automobiles.
Paul A. Eisenstein
Publisher, TheDetroitBureau.com