back to articles | March 01, 2023 | Staci Bailey

Categories:   Tips & Insights For Car Buying    Useful Automotive Information   

EV or Gas? Which Will Take You the Furthest for the Least Money?

Most drivers can expect to pay less to fuel their EV but the actual savings of driving an electric vehicle are specific to each individual. There are multiple variables which are affected by many factors such as where you live, the car you drive, your driving habits, and lifestyle.

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Breaking the dependency on gasoline has numerous benefits. A growing number of motorists are turning to electric vehicles in hopes of saving some money at the pumps. Most drivers can expect to pay less to fuel their EV but the actual savings of driving an electric vehicle are specific to each individual.

To find an easy answer we can look to national averages. A 2020 consumer report study found that electric vehicles are about 60 percent less expensive to fuel than gas powered cars. That sounds like an impressive amount but is that really what you can expect from your electric vehicle?

Based on a study conducted by researchers at the U.S. Department of Energy’s National Renewable Energy Laboratory and Idaho National Laboratory, drivers can expect savings of $14,500 over 15 years just by switching to an electric car. This comprehensive study took into account the when, where, and how a vehicle is charged. It also considers various other factors that can affect the savings of driving an electric vehicle.

The Problem With Averages

Calculating your costs and savings of driving an electric vehicle is not simple. There are multiple variables which are affected by many factors such as where you live, the car you drive, your driving habits, and lifestyle. It’s unlikely that any average is going to exactly reflect your unique situation.

The most reliable estimates are based on national averages. In these calculations individuals do most of their electric vehicle’s charging at home using fast charging stations roughly six times per year. The hypothetical vehicle has a range of 250 miles and driving habits are averaged out. Gasoline and electricity costs have also been averaged.

The problem with averages is that they don’t account for individual variations. Unless you are the epitome of an average American these savings calculations will not be the same for you. These figures are good at providing a baseline but they will not be adequate for all.

The Cost Of Gasoline

Determining how much gasoline your vehicle burns is fairly straightforward. You can find out how much gas just about any car uses by looking at the miles per gallon you can expect to make. Additionally for most of us the only source of gasoline is at a gas station and you can clearly see how much you pay per gallon.

That being said, gas prices tend to be volatile. What it costs you to drive to work today may be drastically different than what it will cost a few months or years down the road. Gas prices also vary significantly based on geographic location. These factors make it difficult to accurately determine the savings of driving an electric vehicle.

The Cost Of Electricity

The price of electricity tends to be more stable than gas. However, these prices fluctuate over the course of a day making it rather difficult to determine the overall savings you may expect. Electricity is less expensive during off peak hours so charging your vehicle at night will cost you as much as 30 percent less than doing so in the middle of the day.

Much like gasoline the cost of electricity can vary substantially by region. While the average cost per kilowatt hour is 15 cents, you could be paying as little as 8 cents or as much as 27 cents depending on where you reside. That could translate to a difference of thousands over time.

Investing in renewable energy sources such as solar panels is one way to take control over your electricity costs. If you charge your electric car with the use of solar panels you can have an annual return of as much as 30%. That means you can recoup the cost of installation within eight years making solar panels a much more lucrative investment.

Electric Vehicle Efficiency

Gasoline power vehicles vary in their fuel economy and electric vehicles vary in their efficiency. The efficiency of an electric vehicle is measured in kilowatt hours of electricity consumed per 100 miles of driving. This demonstrates how far two different vehicles can go on the same amount of electricity. Electric cars are not created equal so compare makes and models carefully when assessing the savings of driving an electric vehicle.

Overall electric cars use far less energy than internal combustion cars. Gasoline powered vehicles can lose as much as 75% of the energy to things like heat while electric vehicles can lose as little as 10%. That’s because electric cars use technologies such as regenerative braking to recuperate more energy back into the battery.

Chargers Are Not Created Equal

Where you charge your electric car will also impact your electricity costs. Charging at home is usually less expensive than using public charging stations. Generally the faster the charger the more expensive it is so while you may be able to find free level 1 trickle charging at a grocery store you are likely to pay a premium at a DC fast charging station.

The average cost of charging, estimated at 15 cents per kilowatt hour, is based on an individual doing 81% of their charging at home, 14% at a public station, and 5% at a DC fast charging station. These figures are, once again, based on national averages but may not represent your individual needs. Doing all of your charging at a fast charging station could potentially eliminate your savings.

Not only do charging stations have various pricing they also bill in different ways. Some charge per minute of charging, some by kilowatt hour, and others charge a flat hookup fee. You may even encounter additional fees such as penalties for staying hooked up after the battery has reached full charge.

If your cost of electricity falls close to the national average and you do most of your charging at home then the cost of running an electric car will probably come close to the equivalent of paying $2 per gallon of gas. For most people this will be substantially less expensive than the price at the gas pump. Factoring in the volatility of gas prices the savings of driving an electric vehicle will likely only increase.

Ready to make the switch? We can help! Visit myAutoloan and get pre approved for financing on your electric car.