Plug-in Car Economics

The cost of charging your plug-in vehicle can vary widely depending on when and where you plug-in, but no matter what, it will be much cheaper than filling up on gasoline.

The U.S. national average rate for residential electricity at home is 11.7 cents per kilowatt hour (kWh). Since electric vehicle batteries are also conveniently measured in kWh, the calculation is straightforward. The Chevrolet Volt batteries require 16 kWh to go from empty to full, or a total average cost of $1.81. Put simply, that's less than a gallon of gas. Sweet, right? Based on this estimate, driving on electricity costs about 75 cents per gallon of gas equivalent.

However, a full explanation of individual charging cost has more "other hands" to consider than a poker game. The cost of electricity from state to state varies precipitously. For example, someone who lives in Pennsylvania pays nearly 12 cents per kWh, while neighboring West Virginians pay 30 percent less (8.28 cents per kWh).

Folks in Hawaii pay by far the most for electricity, while Washington leads the nation not only in lattes consumed, but also in the cheapest power. This chart shows how the differences in regional pricing translate to fully charging a Chevrolet Volt (16 kWh batteries) and Nissan Leaf (24 kWh) every day for a month.

Time to Consider Time of Use

But wait, there's more. If your state allows utilities to charge different rates at different times of the day (known as time of use pricing), you could pay less by charging at "off-peak" times when electricity is not in great demand. Off-peak rates can be 40 percent less than afternoon charging. Utilities are expected to further encourage plug-in vehicle owners to charge at night by offering special discounts on vehicle charging.

How much you'll pay if you charge away from home will range from nothing to a multiple of your home charging cost. Employers, government buildings, and some retailers such as movie theaters will allow vehicles to plug-in for free. Parking garages and charging stations along highways are expected to charge either flat fees per charge, or for the time parked. Some utilities are expected to set up "roaming" plans that will enable you to pay the same rate you pay at home at charging stations around town and have it show up on your home utility bill. A few "rapid charging" stations will charge vehicles in under an hour for a premium that is likely to be in the 10s of dollars.

The Cost of the Car and the Real Cost of Gasoline

However, these rosy calculations of course don't include the cost of the vehicle and its expensive batteries, which in some cases will be sold or leased as a cost above the vehicle. Plug-in hybrids and electric cars ain't gonna be cheap. In fact, adding in the cost of batteries would likely completely close the gap with gasoline at current fuel prices. This is an argument for buying a hybrid car or more affordable small fuel-efficient gas-powered car.

In the long run, the cost of plug-in cars and batteries are going to come down with scale, and could relatively quickly become cheaper than gas cars, especially if the price at the pump goes to $4 a gallon or higher. Of course, the real cost of that gallon—considering the economic costs of carbon emissions and fighting oil wars—is a lot more than that. Shouldn't we drive the change we want to see in the world?