Electric cars have benefits, but likely won't save you money

February 7, 2018 by Dee-Ann Durbin
Electric cars have benefits, but likely won't save you money
In this Tuesday, Sept. 5, 2017, file photo, the 2018 Nissan Leaf is on display during an unveiling event in Las Vegas. Electric car prices are falling, but they still cost more than equivalent gas models because of their expensive batteries. (AP Photo/John Locher, File)

Electric cars have a lot of perks: zero emissions, a quiet ride and instant acceleration. But can they save you money? Probably not.

Electric car prices are falling, but they still cost more than equivalent gas models because of their expensive batteries. A $7,500 federal tax credit—which survived the recent tax overhaul—helps erase that gap, but not entirely.

After that, the math gets more complicated. Some states and utilities offer incentives for electric vehicle owners. Plugging in an electric car is generally cheaper than filling up a gas-powered one, but that depends on the local price of gas and electricity. Some people can charge their at work, but others need to add a charging station to their garage.

For Ronald Montoya, a consumer advice editor with the car shopping site Edmunds.com, the bottom line is price. With gas prices averaging $2.56 per gallon, it's hard to make up the price premium of an electric vehicle—which can easily top $10,000—within a three-year lease period, he says. Electric car drivers are more likely to lease than gas car buyers; for example, 57 percent of Nissan Leaf electric cars are leased, compared to 30 percent of cars overall, Edmunds says. (Edmunds regularly provides content, including automotive tips and reviews, for distribution by The Associated Press.)

Still, electrics have benefits, both tangible—like lower maintenance costs—and intangible. Owners can drive them in high-occupancy vehicle lanes, for example, or simply feel good that they're causing less pollution.

"We are still a car culture, and some of our personal identity is tied up in our cars," said David Friedman, director of cars for Consumers Union, the policy division of Consumer Reports.

Here's a comparison of the 2018 Nissan Leaf electric car and the 2018 Honda Civic, a comparably sized small car.

COST: The Honda Civic four-door sedan with an automatic transmission starts at $19,640. That's $10,350 less than the starting price of the Nissan Leaf, which is $29,990. Electric cars are eligible for a $7,500 federal tax credit until an automaker has sold more than 200,000 in the U.S.; Nissan has sold around 150,000 Leafs, so buyers can still get that credit. Some states also offer incentives for electric vehicles; California, for example, will mail a $2,500 rebate check to electric car buyers, while Colorado offers a $5,000 tax credit. Friedman and Montoya say leasing is smart, since technology is changing so rapidly, but there is still a significant difference in monthly lease payments: $229 for the Leaf or $169 for the Civic for three years.

FUELING: Electric cars are cheaper to fuel. It costs $600 per year to charge a Leaf, according to the U.S. government, which assumes drivers travel 15,000 miles per year and pay the national average of 13 cents per kWh for electricity. By comparison, you'll spend $1,050 on gas to fill up the Civic. Those figures fluctuate depending on where you live; in Honolulu, for example, electricity is double the national average but gas is also expensive—79 cents higher per gallon than the national average. There are other costs to take into consideration as well. If you're a first-time electric car buyer and you can't charge at work or at a public charger, you'll likely want to install a 240-volt charging port in your garage. Expect to pay $1,500 to $2,000 for a charging station as well as installation fees, Montoya says.

MAINTENANCE: Because they don't have gas engines, electric cars don't require regular oil changes or engine filter replacements. Brakes get less wear, too, since the electric motor steps in to help slow the vehicle down. But some maintenance is the same, such as tire rotation or adding wiper fluid. Edmunds estimates owners will spend $3,543 over five years on maintenance and repairs for the Leaf, and $447 more—or $3,990—for the Civic. But electrics do have one significant looming cost: Battery replacement. The Leaf has an eight-year, 100,000-mile warranty on its battery, but if you keep the car past that time, you could be facing an expensive repair. Nissan currently charges $5,499 for a replacement battery if you turn in your old battery; installation is a few hundred dollars extra.

DEPRECIATION: This is a big disadvantage for electric car buyers, and one reason it's popular to lease them. The value of electric vehicles falls quickly once they're driven off the lot. AAA estimates electric vehicles lose $5,704 in value each year they're owned, compared to $2,114 for small cars like the Civic. Electric cars haven't yet proven their durability, and buyers of used electrics are worried about battery costs. Used electric buyers also aren't eligible for federal and state tax incentives. But the depreciation has a bright side: it makes used electric cars much more affordable for those willing to buy them, Friedman says.

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14 comments

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Steve_S2
5 / 5 (2) Feb 07, 2018
I would have expected items published on PHYS.ORG to not allow for fake news, fud or propaganda. This article IS not only fake, it is Detroit Sponsored FUD !

Total Cost of Ownership is much lower than ICE vehicles. Thousands of less parts to fail, no constant oil, filter & consumables that go with ICE nor the general maintenance. Charging at home is cheap, at charger stations even cheaper and if at home during off-peak hours cheapest.

FACTS can be located here with info from Forbes and others included... Verifiable, Credible & Tangible sources no less.
Cost of Driving Electric Cars <50% Cost of Driving Gas Cars (US Average)
https://cleantech...h-drive/

BTW: How to use critical thinking to spot false climate claims (applies to all Green Tech & EV's as well.)
https://theconver...ms-91314
yyysguy
3 / 5 (2) Feb 07, 2018
Steve_S2: You're right that the cost of driving (fuel and maintenance) can be 50% or less, but the total financial cost includes depreciation of the vehicle, which is usually the largest cost item, by far, of vehicle ownership. The Forbes article does not mention depreciation costs at all.

As this article points out, electric vehicles currently cost much more and depreciate much faster than ICE vehicles. This may change over time, but as of now, the depreciation costs overwhelm the other savings, when we are talking about the financial aspects of ownership. Clearly, other aspects, such as environmental concerns, can be a big factor in deciding if electric is the way someone wants to go, but that doesn't make this article incorrect, by any means.

An off-lease Nissan Leaf, however, sounds like a great deal, as much of the depreciation has already occurred.
antialias_physorg
5 / 5 (3) Feb 07, 2018
I recently did the math on a Tesla Model 3 (including the extra 9000 Euros for the extended range battery pack) vs. an equivalently powered ICE car (Golf GTI) both with no extra options.
Despite the difference in starting price (Model 3: 44k EUR, GTI: 30k EUR) the EV beats out the ICE over the average lifetime of a car given average mileage by almost exactly 5000 Euros (assuming constant electricity and fuel prices).
Note that the only incentive we get in germany is a 3000EUR rebate and 10 years no car tax (which amounts to roughly another 1200EUR advantage over the ICE car)
Granted, 5000Euros is not a huge difference over all that time, but still.

If you have your own solar panels or have an above-average daily commute (in germany average is about 40km a day) you can save more, of course.

antialias_physorg
5 / 5 (3) Feb 07, 2018
...forgot: of course installation cost for a wallcharger at home for the Tesla was included in the above calcs
yyysguy
5 / 5 (1) Feb 08, 2018
Good information antialias_physorg. In Europe, with 2x higher fuel prices, or more, the electric car becomes much more competitive than the US. I think your price for the Model 3 is very low. They are not selling the $44K model here, the average price appears to be well over $50K, since they are only selling models with all options due to high demand. It appears that the price in Euros will be about the same as dollars, the increased cost for the European models accounting for the currency difference.

Most people don't keep cars for 10 years or more, but clearly the longer you keep the car, the lower the annual depreciation will be, so electric cars will appear more competitive the longer you keep them.

Also, over 10 years, you have to figure the lost use of money over that time. That extra 14K EUR could have been invested, and at a 3% annual rate over 10 years, that would earn about 5K EUR.
gkam
3.7 / 5 (3) Feb 13, 2018
It appears none of the posters here have an EV. We have two. The difference between them and the ICE car is significant, and we save thousands of dollars every year on the gasoline and maintenance we do not need.

If we paid for our power, the cars (a 2015 VW e-Golf and a 2013 Tesla Model S), would cost us 3 and 4 cents/mile for fuel respectively, but ours are powered by our PV system.

Once you get one, the contest is over.
gkam
3 / 5 (2) Feb 13, 2018
Depreciation got you? Buy a used one, or one with most of the depreciation already taken. We saved $11k by buying a new full-boat 2015 VW when the 2016s came out. With tax credits, it came to $17k. For another $12k we got the PV system to run the house and two electric cars.

The Tesla P85 was almost five years old when I bought it, but is still in new condition, with 23,000 miles on it. The cost was about half of its original price, and because it was a high-end car, was babied the whole time.

So now, we have cars which need almost no maintenance, cost almost nothing to drive, never need tune-ups or emissions checks or trips to the gas station.
Zzzzzzzz
not rated yet Feb 13, 2018
Another poster with no EV, but I will have one soon. The elephant in the room is the cost of the emissions. There could be two parts to that, prior to user ownership and post user ownership. The above article has zero value without addressing that.
However, I also see many flaws in the zero value balance of the article. For example, the maintenance section addresses the first 5 years of ownership. Lifetime has to be the measure, of course. Otherwise a jackrabbit is faster than a cheetah. The net result is negative value article, or worse than zero.
gkam
3 / 5 (2) Feb 13, 2018
After you drive an EV with regeneration, you will hate your old car. Especially in town driving or the commute. You can have one-pedal driving, which lets you set the speed with position of your foot, and save energy at the same time by using regeneration to slow the car, while charging the battery, exchanging your momentum for charge.

The Tesla has two stages of regen, the VW four. You get to choose.
gkam
3 / 5 (2) Feb 13, 2018
Zzzz, we will all have them, the advantages are too great.

But I worry about the social upheaval they will precipitate. Too much of our economy is tied up in supporting the ICE. All the filter makers, the mechanics, the emissions shops, gas stations, parts shops, gas and oil, and all their supporting industries will be hit hard.

It will be up to us to make sure we can assist those who need cross training or re-training.
antialias_physorg
5 / 5 (3) Feb 13, 2018
In Europe, with 2x higher fuel prices, or more, the electric car becomes much more competitive than the US.

There's places in the US where the incentives are a lot higher than in germany (and of course the Tesla retails for 35k Dollars, there - not 35k Euros. Which is another 20% saving). Distances seem, on average, also to be higher in the US, which means the advantage of 'fuel' expenditures is somewhat offset...so I'm fairly certain an economic argument can be made for an EV - even in the US.

but clearly the longer you keep the car, the lower the annual depreciation will be, so electric cars will appear more competitive the longer you keep them.

Which seems reasonable to me. If you ask yourself: Why am I selling a car? Answer: Because repair costs are starting to mount up. Well...EVs don't have much in the 'failing parts' department (batteries and electric motors are very robust).
I see no reason not to keep them longer than a comparable ICE.
Zzzzzzzz
5 / 5 (1) Feb 13, 2018
I think the transition may end up being gradual enough to ease the roughness - my own plan would be to keep an ICE going in addition to having the EV. I also have an old tractor that I'll keep using, or perhaps get a new one. The ICE vehicles/machinery that remain will represent a lessening of demand for fuel (most miles will be taken by EV's, ICE's maintained for infrequent more specific uses) but a more gradual lessening of demand for maintenance parts & activities. Eventually the supply chains will transition to support the changing use/demand levels, and electric pickups and tractors will be more common and more reasonably priced.
antialias_physorg
5 / 5 (3) Feb 13, 2018
Another poster with no EV, but I will have one soon.

Unfortunately still gonna take me a while. I plonked down the 1k preorder for the Model 3 last weekend, but until they start shipping to Europe could be well into 2019.

The elephant in the room is the cost of the emissions.

Even if you get your power 100% from a coal powerplant and adding all the extra emissions EVs have during production you come out ahead. Powerplants are a lot more efficient than cars at converting fossil fuels to energy (which more than makes up for transmission losses, charging/storage losses and electric motor losses in an EV). They also can have a lot better filtration of the emissions than a tailpipe on a car (maybe even CCS if need be)
gkam
1 / 5 (1) Feb 13, 2018
Zzzz, in the transition, it could be a good time to get your hands on a super nice ICE car. Since EVs are not yet cheap, those who buy them would probably be trading in high-end cars.

I could have bought a super Maserati of the same vintage and mileage for the same price as the Tesla. But the Tesla is faster, more stable, easier to drive, and does not need a mechanic.

Re-read those last five words.

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