Study: On Average, EV Fuel Costs Are Less Than Half Compared to Gas Cars

By · January 12, 2018

Researchers from the University of Michigan published a study this week about the relative costs of driving an EV versus a gas car. While it’s widely accepted that a key advantage of a plug-in car is its use of cheap electric fuel, calculating exactly how much you will save is a tricky proposition. That’s because the cost of electricity can fluctuate depending on where you live, the time of day that you charge, and even the season. The Michigan study revealed that—on average and based on recent gas and electricity rates—owners of gas cars pay 2.3 times more than EV drivers, representing average annual savings for electric cars of more than $600.

The study was specifically designed to examine the variation in savings across individual U.S. states. Based on national averages for gas and electricity prices—and average efficiency across all cars—it costs $1,117 for gasoline to travel 11,443 miles (the average distance covered by U.S. cars in 2015). That compares to an average cost of $485 to power an EV. So, based on broad averages, driving a typical electric car versus a typical gas-powered car saves $632.

What does that look like if you are paying $3.30 at the pumps, as they do in Hawaii? Driving the same distance of 11,443 miles costs $1,509—compared to $1,106 for driving an EV in the Aloha State. That makes Hawaii the least advantageous state for driving an EV from a fuel-cost perspective.

On the other end of the spectrum, EV drivers in Washington State pay on average only $372 for electric fuel—where rates are cheap—compared to $1,338 for gasoline. That’s a saving of nearly $1,000 for those same miles.

California, the biggest market for electric cars in the United States, is somewhere in the middle. The Michigan study indicates the California-based EV drivers save about $879 per year by dumping the pump.

Assumptions

These numbers, of course, should be used as a general indicator rather than a promissory note for how much you will save. The researchers made several key assumptions. Their findings are based on the average number of miles traveled by a light-duty vehicle in 2015—or 11,443 miles. The mileage of a gas car was pegged at the national average, which is 25 miles per gallon. And EV fuel consumption is based on the average efficiency of today’s EVs, which is 33 kilowatt-hours per 100 miles or about the equivalent of 102 miles per gallon. The national average gas price is $2.44 a gallon, and the average cost for a kilowatt-hour of electricity is $0.1284. (Many EV drivers, especially those with solar, pay significantly less than $0.12 per kWh.)

The relative savings for swapping an EV with a 25-mpg car versus a fuel-thirsty gas-powered SUV obviously would be higher—while trading a plug-in car for an efficient gas-powered conventional hybrid would be less. Critically, most EV drivers don’t cover 11,443 miles per year, so light drivers would annually save less on fuel than heavy drivers.

Despite all the assumptions and variations, the study, Relative Costs of Driving Electric and Gasoline Vehicles in the Individual U.S. States, by Michael Sivak and Brandon Schoettle—provide several useful key findings. (See abstract.)

On average, the fuel for a gas-powered car is more than double that of an EV. And the required fuel economy that gasoline vehicles would need to exceed for driving them to be less expensive than driving an electric car is 57.6 mpg in the United States. Where EV rates are low and gasoline prices are high—as in Washington—you would need a 90-mpg gas car to match the low cost of charging an EV. (No such car exists.) However, where the EV advantage is less pronounced, like in Hawaii, a gas car offering 34.1 miles per gallon would bring parity.

The study only looked at fuel costs and did not examine the other compelling energy, environmental, and performance benefits of electric cars. It serves as a good rule of thumb and a reminder that EV advantages are based on many factors, including regional influences. Of course, when gas prices inevitably rise from their current modest levels, the cost-benefit of EVs looks even better.

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