Electric cars versus gasoline cars: which one is actually cheaper

Gas prices have increased by more than 58% compared to last year. Time to think about switching to an electric car to save money, reports CNBC.

Given that electric cars tend to be more expensive than gasoline-powered cars, and electricity has its own costs, is it really cheaper to switch to this type of fuel? The short answer is yes. But it also depends on your driving habits, where you live and the type of car you buy. You might even want to consider a hybrid vehicle with a gasoline and electric drive.

Let's compare the cost of gasoline cars and electric vehicles.

Electric vehicles have a higher initial cost

The average electric vehicle (EV) price is $ 56. That's about $ 437 higher than the industry average of $ 10, including gasoline and electric vehicles. In terms of price, an EV is the equivalent of a standard luxury car.

To save time on charging electric vehicles and extend battery life, many drivers are installing so-called "tier 2" chargers on their own, with a total cost of about $ 2000. By JD Power data, with this device it will take less than eight hours to charge your car.

Most EVs come with a level 1 charging cable. It can be plugged into a regular 120 volt household electrical outlet. It can take up to 40 hours to fully charge your vehicle. It's cheaper, but less convenient.

Tax breaks could lower the cost of an electric vehicle

Polls show that the gap in prices for electric vehicles and gasoline cars shrink in the next decade. This will depend on further improvements in battery technology, which could lead to lower operating costs.

In the meantime, customers can offset some of the premiums paid for electric vehicles through tax incentives. The federal government is offering a $ 2500- $ 7500 non-refundable tax credit for newly acquired electric vehicles produced after 2010.

On the subject: New York authorities decide to ban sales of gasoline cars in the state

However, the loan only covers the first 200 vehicles sold by the manufacturer. Tesla and General Motors have already surpassed this number, so no loans from these manufacturers are available. A list of electric vehicles that are still eligible for Federal Tax Credit can be found here.

It is possible that your state is offering its own tax credit or rebate. The Plug In America Electric Vehicle Advocacy Group has interactive map... It shows incentives for electric vehicles in each state. New York, for example, offers up to $ 2000 off.

Electric car maintenance is cheaper

Electric vehicles tend to have cheaper fuel and maintenance costs

While EVs typically have a higher starting purchase price, owners can save significant operating costs. Consumer Reports Research 2020 showed that owners of electric vehicles on average spend 60% less on fuel than cars with internal combustion engines.

This calculation includes the average use of commercial charging stations by electric vehicle owners: 11 visits for every 24 km for a vehicle with a range of 320 km. It can be two to three times more expensive than charging your car at home. Rates vary when charging at commercial stations, but the total cost for a session is roughly $ 10- $ 45 for a full charge of your vehicle's battery.

When it comes to charging at home, domestic electricity rates vary by state and a number of factors. For example, state regulations and how electricity is generated, but the average monthly costs are around $ 25 per month.

And because EVs have fewer parts than gas-powered cars (no oil or spark plugs to replace), they tend to have lower maintenance costs. A recent report from analyst firm We Predict showed that after 36 months on the road, maintenance costs for electric vehicles and light trucks were 31% lower compared to similar gasoline vehicles.

So what is cheaper overall?

U.S. Department of Energy Report confirms that in 15 years, electric vehicles will be cheaper than similar models that run only on gasoline. Consideration should be given to price, maintenance, financing, repairs, federal tax credits, and fuel costs. The electric version of the small SUV costs $ 0,4508 per 1,5 km, which is $ 0,0219 less than the $ 0,4727 per 1,5 km you get with a similar gasoline model.

Based on the average life expectancy of a car, namely 320 km, according to data Car and Driver, the cost of a gasoline car will be $ 94. A similar electric car will cost $ 540 with a difference of $ 90. Note that this amount does not include possible state tax credits as they were not included in the study.

While EVs tend to be cheaper than their gasoline counterparts in the long run, newer EVs with a battery range of more than 450 km may end up costing more in the long run. Electrical cars, covering 480 km on a single battery charge, cost four cents more for 1,5 km than similar petrol models. This is mainly because they are newer, ultra-modern electric vehicles that sell for luxury car prices.

Although EVs are cheaper, they have drawbacks.

One of the biggest hurdles for EVs is that charging a car's battery is inconvenient unless you have access to commercial charging stations or at least a Level 2 home charger. And even with the faster Level 3 chargers you found in commercial stations, fully charging your electric vehicle may take to 30 minutes.

“Time is money if you have to sit for a couple of hours waiting for your car to charge,” says Matt DeLorenzo, senior managing editor at Kelley Blue Book. "This is a competitive disadvantage of electric vehicles: they are inflexible when it comes to refueling requirements, while with a gasoline car you only have a few minutes to refuel and you are on the road again."

Since commercial charging stations total about 46 compared to 150 gas stations, potential buyers will want to make sure they have one nearby using this interactive map... And since the average range of electric vehicles is less than 320 km, you might consider a hybrid electric vehicle if you frequently travel long distances. Hybrid has electric and gasoline engines, which allows you to switch between them depending on how far you plan to travel.

“If you only have one car, in my opinion, you'd better get a plug-in hybrid,” suggests DeLorenzo. - With gasoline at $ 5 a gallon [in parts of California] you will get a car with an electric power reserve of 48-80 km. If you usually drive no further than 25-30 km, then you can use it mainly as an electric car. But if you have a long trip or a power outage, a spare gas engine will help you out. ”