Should You Buy an EV?
Buying an electric vehicle today seems like a no brainer, it’s good for the environment and it will save you money on gas. And that last point seems like a given, gas is expensive, especially these days, and electricity costs cents on the dollar, essentially free - how can you argue with that?!
But a few things are missing from that equation, the efficiency of an EV to yield mileage, for one, and the fact that energy prices can move quite a bit. So I decided to run the numbers myself, and see how much more economical EVs can be, and the answer was a bit of a surprise.
TL;DR Don’t buy an EV just yet. I made a simple “electric or gas” calculator you can use to find out for yourself.
To compare electricity to gas, we need to evaluate with a common unit, cost per mile. For gas vehicles,
cost per mile = cost per gallon / mpg
cost per mile = cost per kwH / kWh per mile
While one half of the equation focuses on the efficiency of the vehicle, the other half is highly dependent on energy prices. Here’s a table comparing car ratings from www.fueleconomy.gov, calculated with the current prices in SF ($5.89/ga and $.34/kWh).
What stands out is the most efficient EVs are the most economical, hands down. However it’s very often the average and best performing hybrid cars are just as economical as an EV. By that I mean the magnitude of “fuel” savings with an EV is quite small - less than $300 per year historically, and ~$500 per year with today’s unprecedented gas prices. That’s surprising to me, I would have expected a much larger gap given the premium being paid for EVs. Lastly, the calculation is highly dependent on your geography, i.e. local energy prices, because they can vary widely and change the equation. So use the calculator to figure out what makes sense for your situation.
So should you buy an EV?
Not so fast. On average, and on variable cost alone, yes. But if you live in a high cost area, i.e. Northeast or the West Coast, I’d double check.
And if you walk back my assumptions and start to include the fixed costs of the car (purchase price, rebates, etc.), then your best bet is a hybrid vehicle, especially a plug-in hybrid, which gives you the flexibility of using gas or electricity, which may come in handy during these volatile times.
Personally, I’m waiting until EV technology gets better. If you look at the last 10 years, Tesla’s cost per mile has improved 36%, compared to 20% for hybrids. If that trend continues, then it’s only a matter of time (~5-10 years) until EVs are the clear favorite.
