Want to save money on driving? Running the numbers on a surprisingly simple solution.
Saving $1,400 annually in fuel costs and dramatically reducing vehicle emissions may be easier than you realize – it takes just a small upfront investment that will pay back its value in a year or two.
Electric vehicles (EVs) may not be the right choice for everyone, but for drivers in the hydro-electric power-happy Northwest, owning an EV could make sense for your pocketbook, and for the environment. Wondering how?
- An IRS tax credit of $7,500 on the purchase price.
- A Washington state sales tax waiver worth thousands.
- Low-cost power means you could spend as little as $300 a year on EV “fuel.”
- Lower maintenance costs and less maintenance time.
- Peace of mind from a zero-emissions daily drive – there isn’t even a tailpipe.
- A savings of $1,400 per year in fuel for the average driver – even before gas prices go back up.
Types of EVs available
Though there has long been interest in EVs, 2010 saw the introduction of two mass-market, major manufacturer plug-in electric vehicles: the Nissan Leaf and the GM Chevrolet Volt. The Leaf, a five-door hatchback, is all-electric. The Volt is a “plug-in hybrid” vehicle that combines an electric motor with a gasoline engine for extended driving range.
Both vehicles now have a lot of competition. Kelly Blue Book lists 12 all-electric and 15 plug-in hybrid vehicles currently on the market, with several more of each type planned, as well as prior model years still available for purchase on the used market.
Costs of buying an EV
The sticker price of a new EV can range almost as widely as gasoline vehicles, from just under $24,000 to a cool $1.15 million.
Many all-electric vehicles qualify for a $7,500 federal income tax credit, while some plug-in hybrids qualify for credits ranging from $2,500 to $7,500. These credits apply only to new vehicle purchases. Many states also have incentives for electric vehicles. Washington waives all sales and use taxes for electric vehicles. For Spokane County buyers, this amounts to an additional 8.7 percent discount. Idaho does not yet have special incentives for EV drivers, though it does exempt electric vehicles from emissions testing, and some Idaho insurers provide 10% discounts for EV drivers.
The list price of a 2015 Chevy Spark with a gasoline engine is $14,765. The plug-in electric version of the same car is listed at $25,170. Taking the federal tax incentive into account, there’s still a $2,905 price difference to buy the electric. In Spokane County, the waived sales tax would save you another $1,285, bringing the difference down to $1,620.
The bottom line: Your final purchase price for an EV will likely be a bit more than an equivalent gas vehicle.
So what do you get for that very small additional upfront investment?
Comparing vehicle fuel costs
An average gas engine costs 12.6 cents per mile to fuel, an average EV costs 2.2 cents per mile.
The cost of fuel will depend on how much you drive, as well as when and where you fill up. The Federal Highway AdministrationThis link opens a third-party website that is not affiliated with STCU. estimates that, on average, drivers put about 13,500 miles on their vehicles each year, or about 37 miles per day.
Assume gas costs $3.25 a gallon, which is low for the Inland Northwest, where gas prices have ranged from $2.95 to $3.78 in the last year. With the EPA estimated average economyThis link opens a third-party website that is not affiliated with STCU. of 25.4 miles per gallon, your cost would be about 12.6 cents per mile, or $1,700 for an average year of driving.
An EV’s “tank size” is expressed in kilowatt-hours (kWh). The Nissan Leaf, for example, has a 24 kWh capacity, and averages 84 miles on a full charge. Washington and Idaho have some of the lowest electricity rates in the nation, at around 8 cents per kWh, depending on location and time of day. This means that the cost would be around $1.92 per charge, or 2.2 cents per mile. This works out to about $300 per year to drive that same 13,500 miles.
For plug-in hybrids, the numbers get a bit more complicated. Most plug-ins have between 12 and 25 miles of “electric only” range before the gas engine kicks in. Depending on driving habits, our average driver would likely use around one gallon of gasoline per day, plus the electric charge, for a total cost of about $1,200 per year of driving.
The bottom line: The average driver in the Northwest would likely save about $1,400 per year on fuel costs. A gas engine costs 12.6 cents per mile to fuel, an EV costs 2.2 cents per mile.
Additional costs of EV charging
You can plug EVs into standard 110 wall outlets using the charger included with your car. Or, you may want a charger that plugs into a 220 volt outlet and usually reduces charging time by half. Purchasing a “Level II” charging station can range from $400 to $1,000.
Many cities and businesses (including STCU’s South Valley Branch) offer free electric vehicle charging. Charging station sharing app PlugShareThis link opens a third-party website that is not affiliated with STCU. reports over 26,000 available charging stations in the United States, mostly free.
Costs of maintaining an EV
The U.S. Department of Energy says EVs require far less maintenance than similar cars with internal combustion engines. The AAA estimates that average annual cost for maintaining a traditional vehicle at about $800 per year. Owners of plug-in hybrid vehicles will have some of those same expenses.
The biggest possible maintenance cost for EV owners is a replacement battery, and they all need to be replaced eventually. Warranty coverage varies from one carmaker to another, but they all cover batteries to some extent. Nissan, for example, warranties the battery for 5 years or 60,000 miles against capacity loss.
Upfront battery replacement costs currently range from around $2,000 for the Civic plug-in hybrid to $5,500 for a Nissan Leaf. Nissan also now offers a battery replacement program with $100 monthly payments for replacing your battery at any point.
There are still unanswered questions about how those used batteries might be disposed of or (more likely) recycled, and what kind of impact those batteries may have. There are a few commercial enterprises already developing the capacity to recycle these batteries, but the relatively low current volume of batteries to be disposed of means that some questions still need to be answered.
The bottom line: EVs require far less day-to-day maintenance. Replacement batteries do need to be considered, but some programs are available to control the cost.
Is an EV really practical?
For most Americans with a daily driving average of less than 40 miles, electric vehicles have plenty of range.
The biggest consideration for many drivers is the question of range. Electric-only cars currently on the market have an EPA reported range of between 60 and 85 miles per charge, possibly up to 110 miles if you’re a conservative driver. For most Americans with a daily driving average of less than 40 miles, electric vehicles have plenty of range.
The fastest charging stations publicly available will charge batteries up to 80 percent in about 30 minutes. But such high-power chargers are not common (in the Inland Northwest, there are high-power chargers in Coeur d’Alene and Ritzville) and can reduce battery life if used regularly. So you’ll need to leave your car sitting, plugged in, for several hours a day. That shouldn’t be a problem since the most recent numbersThis link opens a third-party website that is not affiliated with STCU. from the U.S. Department of Transportation show that most vehicles are driven just 1.2 hours per day.
Just like you wouldn’t purchase a two-door sports car if you’re planning on regularly hauling sheets of plywood, a car that relies solely on electricity may not be practical if you regularly drive long distances. Tesla and Chevrolet have both promised sub-$35,000 four-door EVs with ranges of 200-plus miles by 2017. Until then, a plug-in hybrid or traditional gasoline vehicle may be a better bet for long trips, but for most drivers, an EV is worth seriously considering.