While the upfront costs of purchasing an electric car remain higher than your average gasoline or diesel vehicle—though likely not for much longer—the financial benefits of ownership begin to accrue pretty much as soon as you switch it on.
That means buying an EV is fast becoming a win for one’s wallet, the U.S. Natural Resources Defense Council says in a recent blog post, citing several recent independent studies.
While studies casting EVs as less affordable than internal combustion engine vehicles (ICEV) continue to circulate, they typically focus on very narrow time frames—as little as four months, in some cases—and overlook factors fundamental to the true cost of ownership, namely, maintenance costs and fuel.
But the financial benefits of owning an EV begin to accrue pretty much the moment its owner starts driving it, NRDC writes. A May 2022 study by San Francisco-based Energy Innovation found that in most U.S states, “financing and owning an EV is cheaper on a monthly basis than financing and owning an equivalent gasoline car.”
That helps explain why California’s Advanced Clean Car II standards are being increasingly adopted by other states, as policy-makers recognize that EVs “not only zero out pollution but also significantly reduce consumer transportation costs, the second-largest household expense category,” the blog post states.
NRDC cites a 2020 survey by Consumer Reports that compared the fuel and maintenance costs for nine of the most popular, least-expensive (EVs on the market in 2019, all of them below US$50,000, with their gas or diesel equivalents. “The average EV owner paid half as much for maintenance compared to ICEV owners and $4,700 less for fueling over the first seven years of ownership.”
According to an August, 2022 post by Car & Driver, US$550 will power the electric Kia EV6 (2023 baseline price: C$47,995) through 15,000 miles—provided all charging is done at home. The gas-powered Kia K5, by contrast, will set the owner back US$1950 to travel the same distance.
Even in the worst-case scenario of being forced to use public fast chargers exclusively, the EV6 is still cheaper to fuel, though not by much. Using an Electricity America rate of $0.43 per kilowatt-hour, Car & Driver puts the annual fueling costs of this scenario—which it describes as “extremely unlikely”—at $1,850.
A December, 2022 post by Australia’s The Driven projects a much larger cost savings, even under the worst-case scenario of exclusive public charging. At $2 per litre, an ICEV would run its owner an annual A$2,200 in fuel costs, as compared to the most expensive charging network at $900. For home charging, The Driven estimates a cost of $450 and $225 per year and peak and off-peak power, respectively.
Back in the United States, more and more EV drivers sit poised to benefit from off-peak charging opportunities as “more utilities across the country adopt or propose time-of-use (TOU) rates,” writes NRDC.
Also poised to improve access to public charging, and hopefully affordability, is the US$5 billion the Biden administration had pegged to finance the buildout of 500,000 EV chargers.
With the passage of the U.S. Environmental Protection Agency’s most stringent ever tailpipe emissions regulations, “average lifetime fuel and maintenance savings of EVs will reach US$12,000,” writes NRDC.
Meanwhile, the price of EVs continues to tumble, and “could potentially reach parity with ICEV prices as soon as this year.” Contributing to this levelling will be “a nearly 90% decrease in EV battery pack costs from 2008 to 2022.”