Plug-in for savings — How EVs can actually be cheaper than gasoline cars
By: Leanne Sun
Yes the price tag of an EV is still higher than that of a traditional gasoline vehicle. But any vehicle owner knows that the price tag is just the first expense in a series of expenses (maintenance, fuel, insurance, etc.) that you’ll pay throughout your vehicle’s lifetime. A study done by the Electric Power Research Institute researched lifetime costs* of the electric Nissan LEAF and Chevy Volt and compared these costs to traditional gasoline and hybrid vehicles. The study showed the lifetime costs of EVs performed highly competitively, and in many cases better than the average costs of conventional vehicles. Curious if you could save by going electric? Read on to find out.
Upfront Purchases
The Chevy Volt has the highest upfront purchase price at around $35,000 but with relatively low operation and maintenance costs it has the lowest lifetime costs of any vehicle, about $775 lower than the average conventional vehicle. The Volt is a great option for a wide range of drivers. It provides 40+ miles of full-electric range, then switches to gasoline power when the battery is depleted. This means that you can get the best of both worlds — the opportunity to drive on electricity AND the comfort of knowing you can take longer trips with ease.
As a 100% electric vehicle with limited range (<100mi), today’s Nissan LEAF is built for shorter trips around town. This makes it more difficult to directly compare its lifetime costs with other vehicles that can do both short and long distances. Today most people that have a 100% electric vehicle have another car they take on longer trips. The study estimated the lifetime cost of LEAF ownership was $7K lower than that of the average conventional vehicle, but if you’re considering one you’ll have to weigh the monetary savings against the cost of limited vehicle range. But don’t worry, as battery technology improves the next generation Nissan Leaf is predicted to have 200+mi range.
An increase in affordable charging infrastructure will also increase the lifetime value of EVs. Workplace charging decreased the cost of LEAF ownership by $700, and with even more access to public charging the overall costs decrease further.
Financed Purchases
In the US most vehicles are “bought” as financed purchases where the cost of the vehicle is payed over time through a stream of monthly payments. The same EPRI study also compared the average monthly expenditure across the same vehicle types to account for this common purchasing format.
In this case, the Nissan LEAF is a superstar. It has the lowest overall monthly expenditures of any vehicle due to its extremely low operation and maintenance costs. The case for the Volt becomes a bit more complicated. The average monthly expenditure for the Volt was about $110/month while it was only $70/month for a conventional vehicle. However, 20% of the monthly costs for conventional vehicles are due to operating costs which continue after the loan period is over. Although the payback period is longer for the Volt in this study, the difference in cost ($40) could be recouped in non-financial value like personal preference and increased sustainability.
Making a Decision
Despite the higher upfront cost for an EV, the savings in fuel costs and maintenance fees balance out the overall lifetime costs to make these vehicles cost-competitive with gasoline powered cars in almost all cases. Rapid developments in public charging infrastructure and reductions in battery costs further reduce the price of EVs and will amplify these savings over time.
*The total cost of ownership per vehicle was calculated based on a lifetime of 150,000 miles with fuel costs of each calculated based on fuel costs by fuel usage. Learn more about assumptions used here.
