2011 Nissan Leaf

Why electric cars are cheaper to drive than gasoline cars

Many look to electric cars not for ecological reasons, but because of greater efficiency, they're cheaper to drive.

Among the benefits of electric cars is cheaper fuel costs, that is the cost per mile for fuel to run the vehicle. A couple weeks ago Consumer Reports released a report comparing gasoline and electric cars, showing electric car fuel cost was a fraction of gasoline car fuel cost. A recently released video from an electric car fan, Peder Norby (below), claimed his electric car (a leased Mini-E) costs 30 cents per gallon equivalent in fuel costs, giving us an excuse to go over the figures.

Consider that companies around the country with delivery truck fleets are buying electric trucks. This isn't even primarily for for ecological reasons, but because electric trucks cost less to operate than do equivalent diesel trucks. Fleet owners know to the penny what it costs to operate their truck fleet, and know that switching to fuel efficient or electric trucks saves money helping their business bottom line. The key is lower fuel and maintenance costs, adding up to a lower cost of ownership, so long as the electric trucks' range fits delivery route distances.

Retail vehicle owners don't have quite the same need to minimize costs. Lord knows there are many factors going into why someone buys one car or another, but we, the retail car consumers, could still benefit from the savings.

To make one thing very clear, this comparison is looking solely at the operational cost to drive an electric vehicle, and not at the total cost of ownership.

Let's compare two hypothetical cars, one is electric having a 24 kilowatt-hour battery pack and a 90 mile range (essentially the Nissan Leaf), the other is a similar sized gasoline sedan getting a typical 30 miles/gallon. Traveling 90 miles in the gas car requires 3 gallons of gasoline, costing $10.50 if gasoline is $3.50 per gallon, while the electric car would require 20 kilowatt-hours (or more) costing $2.20 for the electricity if electricity is 11 cents a kilowatt-hour. Same distance traveled, quite a bit less cost. A 90 mile daily trip is more than the typical daily commute because most people drive less than 40 miles/day commuting.

That's all well and good, but how do we convert this to a cost per gallon equivalent? On the gasoline car we know the cost per gallon, it's whatever we're paying at the pump this week. Electric cars get their fuel by the kilowatt-hour which is not directly comparable to cost per gallon. The standard conversion is the Gallons Gasoline Equivalent chart published by the EPA which says it takes 33.41 kilowatt-hours of electricity to equal the energy content of a gallon of gasoline. Which means our 24 kwh electric car has the equivalent of 0.72 gallons of gasoline on-board, which begs the question of how it can go 90 miles on that small a quantity of energy. The answer is that electric drive trains are hugely more efficient than gasoline. As Peder Norby points out in his video, the noise and heat given off by gasoline engines are symptoms of inefficiency, while the quiet smooth ride of an electric car is a symptom of their efficiency.

In the gasoline car we're comparing with 90 miles requires 3 gallons, 30 miles requires 1 gallon, while in the electric car the 20 or so kilowatt hours consumed gives 90 miles, meaning it takes 6.7 or so kilowatt hours to equal the range of one gallon of gasoline (in our comparison car). This adds up to 75 cents (or so) per 30 miles, which roughly speaking means a 75 cent cost per gallon equivalent. For whatever its worth, the figures Consumer Reports published said the Leaf costs $1.05 per 30 miles. That is, defining "gallon equivalent" as the energy required to travel the distance in which an equivalent gasoline powered car consumes a gallon of gasoline, rather than the EPA Gallons Gasoline Equivalent meaning of "gallon equivalent".

Despite having climbed out on a shaky limb, the $0.75 or $1.05 per gallon equivalent is pretty good. It's a lot less than the cost of gasoline these days, but Norby claims his cost is 30 cents per gallon. How could he be making this claim?

It would have to be the solar panels on the roof of his house. His cost for electricity is not the retail price charged by his utility, but is instead an amortization of the cost of the solar panels. It's well known installing solar panels creates electricity cost savings that pay for the solar panels over a few years. A person owning both solar panels and an electric car would have an even faster payback period for solar panels, because they're offsetting the cost of fuel to power their car.

It is cheaper to drive an electric car than the equivalent gasoline vehicle on fuel costs alone. There are also a big range of maintenance costs that gasoline vehicle owners pay (like oil changes) that electric vehicle owners don't worry about. The amount of savings between electric and gasoline cars of course depend on the current price of gasoline. The price of electricity is fairly stable, and is set by utility commissions, while the price of gasoline jumps around all the time, and is set by OPEC. Over the long term as the effects of peak oil become more prominent its expected the price of gasoline will only go up, leading to even larger savings as that occurs.

Sunrise on a Brighter Future from Peder Norby on Vimeo.

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Comments

The only flaw in this argument is electric vehicles are so expensive. Compare the Nissan Leaf to the Nissan Versa hatchback (both have roughly the same amount of cubic feet of space) and then punch the numbers into Edmund.com's True Cost to Own Calculator. The cost per mile of the Leaf over 75,000 miles is 54 cents per mile vs. 51 cents per mile for the Versa. Also, I wonder about the feasibility of solar panels paying for themselves in a few years. I know here in the Northeast they cost about $25,000 for an average home (sometimes offset by grants). Even with a generous $4000 a year in electricity and fuel savings, it's still more than six years to recoup the costs assuming no interest charges accruing. Electric is a viable option when the mass of vehicles reaches a point to come down to competitive price level.
Maybe I should have called it out - but I was only looking at fuel cost, not full cost of ownership.
Great story, and pretty close to accurate. I've been driving two EVs for 9 years/100,000 miles and powering them with kWh generated from sunlight falling on my roof. As Mr. Norby points out in his video, the amortized cost of solar is quite low. I paid about $15,000 out of pocket for the 3 kW PV system in 2002. The energy it generates covers both my house and car's needs with a small left over bill of about $100 per year. I've calculated that offsetting the house's energy needs and the gasoline I would have bought to drive 100,000 miles over the last 9 years, that the PV system has paid for itself as of this year. PV systems are guaranteed for 25 years, but the effective life span can easily be 40-50 years. This means I get free energy for the rest of my life to run my house and drive my car. As for the difference in cost of an EV and a gas-burning car, I cringe when I read people comparing the LEAF with a Versa. I own a LEAF, and I've driven a Versa. These are not comparable cars at all. The LEAF is significantly better in every way. More importantly, people who buy EVs value attributes offered in an EV that no gas-burner can offer. Our cars don't pollute other people's air. We use energy that's 100% domestic. There has never been a war over electricity, and there never will be. With an EV, you have the choice to use 100% clean, renewable energy. With gas, the only choice you have is between Exxon/Mobil and Chevron/Texaco. Believe it or not, millions of Americans actually value a car that has these attributes and are willing to pay more for such a car.
Hi Paul, thank you for the excellent comment. I've been riding electric bicycles and motorcycles for years, and just recently finished an electric car conversion. I recently attended a presentation by UC Davis researchers about their EV research. One point they presented is this value argument you give. Some people look at this with a money value like I outlined in the article, but others have other values they bring to the decision. And quite frankly those of us who have done EV conversions have to see a really huge value, simply because of the sheer work involved in doing the conversion.
Good read, David... I find that using a Volt for a long daily commute, and doing so on just battery power from plugging in on each end of the commute, results in huge gasoline savings, paying well over half of the car payment. These savings will continue well beyond the term of the loan, so I expect the total operating cost to actually be quite low, and in a very modern, capable and comfortable ride for 4. The range extending engine (making this vehicle "technically" a hybrid...) completely alleviates range anxiety and ensures my ability to be responsive to family and client needs, without having to rely on a second vehicle and it's additional fixed and variable operating costs. Driving about 30,000 miles annually, I operate over 90% of those miles on stored grid power. It's all about viewing and using the engine "feature" as one for "emergency purposes only", and typically, planning accordingly...
You're right. I was making a size comparison, not necessarily a quality comparison. However, the 2012 Nissan Versa is a fairly nice car with quality about its price level while you'd have to concede that the Leaf does not have the quality to match its price tag. Thank you for providing real-life experience on how long it takes for the PV system to pay for itself. I think it's a valuable point that conversion to solar is a long-term commitment that will not pay off for years to come but when it does, it's a great thing. Solar is the purest source of energy we have in terms of effects on the environment. I'm glad to see people making that commitment.
Keith, you said: "... you'd have to concede that the Leaf does not have the quality to match its price tag." I would never concede that! If you will go back and re-read my post, I described several attributes of an EV that I value. No gas car has these attributes. The price of the LEAF, even before the incentives, is one I would pay gladly. Getting the $12,500 in incentives was icing on the cake. A good way to look at it is to consider each attribute alone and then place a value to it based on cents per gallon. Driving a car that does not pollute. That's a characteristic of EVs that no gas car will ever have. How much is that worth to you? 1 penny per gallon, 10 cents, 50 cents? An EV uses domestic energy over which we never have to fight wars. No dead soldiers associated with my driving. That's got to be worth something to you. 1 penny, 10 cents or 50 cents or more? Being able to generate energy to drive your car from sunlight falling on your roof. How much is that worth to you? I value this quite a bit. So, if you take all these values, and there are many more, then add that to the price of gas at your station, then you can run the numbers and calculate the operational cost of driving an ICE. That's how I do it and it's why I am willing to pay a higher price for a well built EV. I am saddened that more Americans aren't running the same calculations when shopping for a car.
Paul, David, all, thanks for commenting and making the story more in depth. I feel I should explain my $0.30 to $0.40 cents a gallon equivalent comment for clarity. My overall system size is 7.5kw and that system powers both our home and car. It is a balanced energy use and energy generation solution, We generate 11,700KWH a year and we use 11,700KWH per year, about 3700kwh for the Mini-E and 8000kwh for the home. Each KW of a solar PV system cost today approximately $3700 when part of an average sized residential system. I think the main difference in Paul and my calculations are that my system installed in two parts, 5 years ago, and 2.5 years ago was cheaper per KWH. Electric cars such as the Mini-E are returning between 3.5 and 4.25 miles per kwh. The upcoming BMW i3 will be pushing the 5 miles per Kwh threshold. For this analysis, as it looks at the next 25 years of driving, we will assume a 5 miles per Kwh efficiency. One KW of solar PV will generate approximately 1550KWHs of electricity annually thus generating 38,750Kwhs over the 25 years. It should be noted that there is a slight degradation of annual generation over that time, and that one inverter replacement will most likely be needed as well. However the system will last a far greater lifetime than the 25 years of warranty so we are going to call those data points a push. 5 miles per kwh multiplied by 38750 KWHs equal 193,750 miles driven for the energy cost of $3700. It also provides certainty of energy cost, as the sun never increases it’s price. That’s 1.9 cents per mile. Using the fleet average of 21 mpg, that’s the equivalent of $0.40 cents per gallon of gas. But it gets even better. We are on a TOU rate schedule and get paid $0.30 cents per Kwh that we generate in excess during the peak hours of the day. We pay $0.14 to use the super off peak energy to charge the car at night. We calculate this to be an additional 30% savings. (weekends don’t count, summer is better than winter) thus lowering our cost to $0.25 -$0.30 cents per gallon equivalent. Cheers Peder
Paul, David, all, thanks for commenting and making the story more in depth. I feel I should explain my $0.30 to $0.40 cents a gallon equivalent comment for clarity. My overall system size is 7.5kw and that system powers both our home and car. It is a balanced energy use and energy generation solution, We generate 11,700KWH a year and we use 11,700KWH per year, about 3700kwh for the Mini-E and 8000kwh for the home. Each KW of a solar PV system cost today approximately $3700 when part of an average sized residential system. I think the main difference in Paul and my calculations are that my system installed in two parts, 5 years ago, and 2.5 years ago was cheaper per KWH. Electric cars such as the Mini-E are returning between 3.5 and 4.25 miles per kwh. The upcoming BMW i3 will be pushing the 5 miles per Kwh threshold. For this analysis, as it looks at the next 25 years of driving, we will assume a 5 miles per Kwh efficiency. One KW of solar PV will generate approximately 1550KWHs of electricity annually thus generating 38,750Kwhs over the 25 years. It should be noted that there is a slight degradation of annual generation over that time, and that one inverter replacement will most likely be needed as well. However the system will last a far greater lifetime than the 25 years of warranty so we are going to call those data points a push. 5 miles per kwh multiplied by 38750 KWHs equal 193,750 miles driven for the energy cost of $3700. It also provides certainty of energy cost, as the sun never increases it’s price. That’s 1.9 cents per mile. Using the fleet average of 21 mpg, that’s the equivalent of $0.40 cents per gallon of gas. But it gets even better. We are on a TOU rate schedule and get paid $0.30 cents per Kwh that we generate in excess during the peak hours of the day. We pay $0.14 to use the super off peak energy to charge the car at night. We calculate this to be an additional 30% savings. (weekends don’t count, summer is better than winter) thus lowering our cost to $0.25 -$0.30 cents per gallon equivalent. Cheers Peder
just one additional point. In many of our Pacific Northwest and mountain states, hydro is the primary source of electricity. The utilility cost are at around $0.06 - $0.08 cents per KWH. In those places they can drive an electric car like the Leaf or ActiveE using clean renewable utility supplied energy for the equivalent of $0.40 cents per gallon just buy pluging in to the existing grid. Cheers Peder
All of the above comments, especially costs, are valid and believable. But has the replacement cost of batteries been factored in? Electricity costs would seem to be fairly stable compared to gas / diesel, and including the replacement costs of batteries, electric vehicles still come out on top for cost per mile. Great discussion.
"The price of electricity is fairly stable, and is set by utility commissions, while the price of gasoline jumps around all the time, and is set by OPEC." I totally disagree with the last part of your statement. OPEC certainly does influence the price of oil and the various oil products including fuels. Far worse than OPEC (which is bad enough on its own account) are the international oil companies also known as big oil. These SOBs are at liberty to do whatever they like and when they like; their lobbying expertise ensures them governmental protection for whatever they desire to do. This is an excellent example of legalized theft, corruption, coercion, blackmail and more of the like.
When comparing EV vs Versa, we must consider how automobiles are used for each individual. EV at this point is neither for everyone nor every occasion, especially the ones who drive long distance. However, for short driving it definitely beats the traditional gas vehicles in every ways. Even in the total cost of ownership, EV certainly requires less maintenance which further pollute our environment besides air. It is not reasonable to compare car vs car but it must include all downstream costs which will add higher costs in our overall lifestyle. If we want better environment and better world, perhaps we must accept that EV does certainly contribute to that cause.
Hi - I, too, have been driving a (DIY converted) EV for a couple of years. Only, I'm in the UK where the current unleaded price is *US$7.84 per US gallon*. This is more than twice what you are paying in the US but believe me, this price will be coming to a gas station near you in the near future. It has even come down a bit in recent weeks from an $8.08 peak. Premium (super) unleaded is now $8.31, standard diesel much the same. These are all average UK prices, mind. The max price currently in the UK for premium unleaded is US$9.26! At that gas price, owning an EV or Volt-like hybrid starts to look like a 'no brainer' as you Americans say. I would still be driving my van now the 40 miles round trip to work each day (and loving it) but some loon in a 4x4 caused its early demise. I have another EV in the offing though... wwwdotevalbumdotcom/2092 Regards, MW.
It's always been a bit ilxepnicable to me how much of the rest of the world has managed to put $3-4-5 tax on gasoline but in this country we've not even been able to index the existing Federal one to inflation although several States have.It's been more than 20 years that the Fed tax has been adjusted for inflation as well as a number of statesAs a result after paying for maintenance and operations there is very little money left over for new projects.More and more new projects will be toll projects including HOT Lanes in the congested urban areas.HOT Lanes are thought by many to be a "better" direct user fee than gas taxes which don't differentiate where and when you drive - which also has a cost - congestion which is computed out at a cost in time.The other "innovation" in toll roads is that of late - a given toll road does not have to stand alone on it's toll revenues.It can be subsidized by other, more lucrative toll roads.The more lucrative toll roads are also being used to subsidize transit as the Dulles Toll Road in DC is being used as a cash-cow to finance the METRO extension to the airport and the HOT lanes on the beltway and I-95 will use tolls to fund METRO and other mass transit such as commuter rail.