Power Institute Study: Total Cost of Ownership Cheaper for Electric Cars

By · June 13, 2013

TCO for Chevrolet Volt

Earlier this week, the U.S. Department of Energy released a fuel price calculator that illustrated how much cheaper it is to refuel an electric car compared to a gasoline one. But what about the total cost of ownership (T.C.O.), from driving it off the dealer’s lot to paying for annual servicing, fuel and other consumables? Does paying a high sticker price for a new electric car pay off over time compared to a conventional gasoline car?

The answer, according to the pro-EV non-profit Electric Power Research Institute, is a resounding yes, at least for those who hold onto their car for a significant amount of time. In an exhaustive new study published yesterday, E.P.R.I. examined the T.C.O. of the 2013 Nissan LEAF and 2013 Chevrolet Volt against conventional gasoline and hybrid cars. Rather than assume cars were purchased outright, it factored in a five-year (50 month) finance package into its calculations.

Assuming identical finance packages and an average gas price of $3.62 per gallon, the Volt proved marginally cheaper to run over a five-year period compared to a conventional gas or hybrid car, despite having the highest sticker price of any car in the survey. Meanwhile, the LEAF proved as much as $7,000 cheaper to run over five years compared to gasoline or hybrid cars.

Charging, Driving, Key Factor

For both cars, the study looked at two separate driving pattern scenarios: one in which 83 percent of driving days were less than 40 miles in total; and another where 53 percent of all driving days were less than 40 miles. The study assumed both cars would only be charged at home, negating the real-world impact of public or at-work charging. Consequentially, it assumed LEAF owners needing to drive beyond the range of a single charge would need to hire a back-up vehicle with an assumed gas mileage of 24 m.p.g. Over the course of five years, the study has factored $4,000 of rental or replacement car fees to the LEAF’s T.C.O. calculation.

By making the assumption that LEAF owners are resourceful enough to charge away from home, and live in an area with an abundance of Level 2 and rapid charging stations, the LEAF’s T.C.O. over the five year period falls by another $4,000, making it $11,00 cheaper over the five-year period than its cheapest competitor.

Californian influence

Things get even better for Californian drivers, with incentives dropping the T.C.O. even further for both the Volt and LEAF. As a consequence, the study concluded the LEAF has a T.C.O. $10,000 less than its gasoline counterpart, even accounting for $4,000 of replacement car hire for days requiring more than the LEAF’s E.P.A.-approved 75 mile range. Use public charging and never hire a replacement car, and the cost benefits rise to an astonishing $14,000.

Of course, both LEAF and Volt TCO figures are affected by rising and falling gas prices. Even with a $1 drop in the price of gasoline however, both vehicles still remain within 10 percent of the TCO figures for gasoline and hybrid cars. Raise the price of gasoline by $1, and the cost benefits rocket, making both cars between $10,000 and $15,000 cheaper to run than comparable gasoline or hybrid cars.

Comments

· · 4 years ago

This is hardly scientific, but I will say that our EV is almost free to operate. My wife and I are on our local electric company's Budget Plan. In almost 5 months we have put on more than 4K miles. To date, our Budget Plan has not raised even one cent, not one penny! Now, yes, I understand that things get recalculated and at some point the "you know what" will hit the fan, so to speak. However, it's looking awfully good for us on the costs to run this baby. Naturally, none of the usual costs that we always had to pay in past years with our ICE's: oil changes, fuel filters, Oxygen sensors, all kinds of stuff. So, the cost of the lease is offset by the savings in fuel. I can honesly say that we are more or less driving for free. I can't complain...

Lou

· · 4 years ago

@Lou,

No offense, but being on the Budget Plan means that you are completely unqualified to comment on operational fuel costs on your car. Unless you told your utility that you bought an EV, they have no reason to re-evaluate your payments.

Even on the standard pay-as-you-go plan I'm using, it's hard to pinpoint the cost of the Leaf just from my electric bill. My bill fluctuates so much, that the increase due to the Leaf is in the noise. My closest guess is based off of Carwings' data on how much the car uses, combined with calculating my incremental electricity costs. Based on that, I calculate that my Leaf saves me about $35/month. Not huge, but that's because 1) it's compared to a hybrid (what I would actually be driving instead) and 2) I choose to pay a little more for wind power rather than the standard mix.

· · 4 years ago

Brian:
No insult taken, and I realize that there HAS to be a cost to operate the EV. FWIW, I did tell my utility that I was driving an EV(as they had a program for owners, qualified for $50 rebate---which as someone leasing I didn't qualify for). I guess at some point we'll see an increase in the bill. All else being equal,( and nothing else changed in our basic electric useage) we should eventually see some sort of increase. But the point I was making is that our bill has stayed the same for 5 months now...whenever we do get re-rated I will be curious to see how much it increases. I don't have Carwings(not a LEAF) so I can't really chart the electricity it uses so easily.

Lou

· · 4 years ago

This is rather a heart warming study for us EV enthusiasts. But so much depends on the price of electric power vs. gasoline cost. If the US attacks Syria such as Hillary Clinton wanted (she always needs to be the biggest warmonger in the room), then Gas prices will skyrocket.

I was against the Libyan war also (and the genocide of Black Libyans, something a totally white president couldn't get away with), so I'm definitely not advocating deposing one of the few remaining independent Nation States, but without war the current trajectory is toward increasing electric prices and stable gasoline prices, at least in the States. I would rather tolerate this than have the politicians start a war with Russia.

Incidentally, this same phenomenon is why I can't see H2 becoming any more than a curiousity, in view of its much higher price. I wish instead of promoting, and giving tax breaks to "hydrogen highways", we could get our state gov'ts to waste $2000 and install a single level 2 charger at each rest stop on the thruways. They have the juice there already. Just need a cheap EVSE on the wall with a long enough cord to reach the car. And option it so that it works with a Tesla Roadster.

· · 4 years ago

"And option it so that it works with a Tesla Roadster."

Which public L2 chargers don't work with a Tesla Roadster if you bring your own J1772 Mobile Connector?

· · 4 years ago

Tesla has a J1772 adapter in every Model S delivered that let's it use any J1772 EVSE.

· · 4 years ago

My solar panels solve one problem. My greatest savings has been the $1,000.00 a year service charge by the Toyota dealer for routine service.
I will save more from services charges than from gasoline, well, maybe about the same.

· · 4 years ago

Anyone with some decent math skills would have known this already.

With the recent Volt disocunts and ultra low leasing price of the Leaf, they are no brainers...

· · 4 years ago

For those who would like to know exactly how much power they are using in their EVs, I suggest purchasing a Kill A Watt Meter (google it, the spam filter doesn't allow links). Our charger plugs into a regular outlet in our garage so we plug in the meter and then plug in the charger. You can check each day or you can let the meter monitor for a longer period of time to see how many kWh you are using. The meter also allows you to calculate the cost based on your electricity rates in your area. You could also estimate your costs by looking at the capacity of your battery pack and and approximating the the percentage of battery depletion before you charge. Either way, you can easily calculate your charging costs so you don't get hit with unexpected increases in your electric bill.

· · 4 years ago

@Mike I

Does Not work: All 3 outside Aerovironment Charger docks at LeBrun Nissan, Audburn NY.

Works: The outside Aerovrionment Charger at Burdick Nissan, Cicero, NY.

What's the difference? I asked the service manager at LeBrun to see if he could find out.

I left there last sunday with all 3 red trouble light pilot lights flashing.

· · 4 years ago

@Mike I

Also, I've tried a Fisker L2 charger (actually rebranded Pass & Seymour LeGrande) 16 amp charger does not work.... It just sits there constantly negotiating but never starts charging.

None of the Schneider things will work even though they say they will.

(I have a schneider at home but I had to redesign it).

Supposedly the SPX 24 amp thingy won't work with a Rav4EV or a Roadster.

The 120 volt VOLTEC doesnot work (constantly negotiates), but Brian Schwerdt's 240 volt 15 amp Voltec works just fine.

· · 4 years ago

For one who is looking for a bargain, I own a Mitsubishi i-MiEV.
It is a few thousand cheaper than the Leaf (which is cheaper than the Volt) to buy.
And, the best part, it is more fuel efficient than the Leaf or Volt. And, of course, no ICE car can come close.
Last year I drove 10,078 km (~6300 miles) using 1134 kWh, costing $76.54.

· · 4 years ago

@rjr54

Those must be $Canadian dollars.... I would bet you are penalized for using too much Hydro due to your Imiev and your normal rate would be more like 5 1/2 cents. Under 7 cents per kilowatt-hour is rare in the states and becoming more so. Its 12-13 cents (varies)/kwh across the border from Fort Erie, or Niagara Falls.

· · 4 years ago

The study has a couple of flaws. One is they assume the batteries will not have to be replaced over a 12 year period. Second, the comparison vehicles used to compare against a Leaf are far overpriced, by about $7000 or more.

I would recommend to someone purchasing either of these two cars is to not hold the vehicles past about five years, so you don't get into hugely expensive battery replacements or accelerated depreciation. Your risk level goes way up past that point.

· · 4 years ago

@Michael:

So, basically what you're saying is that it all depends on the *actual* price of the car?

We got our SL Leaf at a Year-end sale at $7500 off from the dealer, +$5000 off from the Province, plus $2000 off from my wife's work, plus freight and PDE were included. The end result was a $27595 pricetag.

At that price, plus our cheap electricity, plus our egregiously expensive gas, I figured that the difference between our loaded leaf and a loaded Matrix (it's the same size and it's not super great on gas, I like to use it as a comparison) will be paid off in about a year.

So yeah, sometimes you can get a super deal and it really makes sense.

· · 4 years ago

We got our Plugin Prius for $27,700 before the tax credit and took out a loan for the full amount at 0% interest. I estimate the interest free loan saved us another $1800 dollars over a five year period. life time fuel economy is over 160 mpg. Compared to the car it replaced the PIP saves us $700 to $800 dollars per year or up to $4,000 over five years at current cost for energy. Our PIP cost the same as a std. Prius. I estimate we will save $350 per year in fuel cost (cost of both gas and kWh) compared to a std. Prius.
No way we will have this car by the time the battery warranty runs out in 10 years.

· · 4 years ago

@BraveLittleToaster,

Sounds like a great buy on your Leaf, and, yes, with a low price, you really can save money with an EV, especially if your drive a decent number of miles per year. Gasoline is not a trivial expense anymore.

· · 4 years ago

This study is very misleading. Many modern conventional cars are kept on the road well beyond 5 years and suffer little in the way of increased maintenance costs. On the other hand, electric car batteries will generally have to be replaced somewhere between 5 and 10 years. When you look at the cost of either replacing the electric car or even just the battery, total cost of ownership of electric cars far exceeds that of conventional cars for longer time frames. Also, the article and some commentators seem to treat government subsidies as though they were free. They represent a transfer of tax money and are a cost to someone if not the electric car owner. Eventually, they will have to disappear and that will further increase the TCO of electric cars.

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