Wednesday, October 28, 2020

EVs Offer Big Savings Over Traditional Gas-Powered Cars - A Consumer Reports study shows that total ownership cost savings can more than make up for an electric vehicle's typically higher purchase price

When it comes to buying an electric vehicle, many consumers might like the idea, but they sometimes balk at the purchase price, which is typically higher than that of an equivalent gasoline-powered vehicle. However, new research from Consumer Reports shows that when total ownership cost is considered—including such factors as purchase price, fueling costs, and maintenance expenses—EVs come out ahead, especially in more affordable segments. (Download a PDF of the fact sheet and the complete report.)

The savings advantage can be compelling in the first few years and continues to improve the longer you own the EV. Our study shows that fuel savings alone can be $4,700 or more over the first seven years.
When comparing vehicles of similar size and from the same segment, an EV can cost anywhere from 10 percent to over 40 percent more than a similar gasoline-only model, according to CR’s analysis. The typical total ownership savings over the life of most EVs ranges from $6,000 to $10,000, CR found. The exact margin of savings would depend on the price difference between the gas-powered and EV models that are being compared.

For lower-priced models, the savings on ownership costs over the lifetime of the vehicle (200,000 miles) usually exceed the extra money paid for a comparable EV. For example, a Chevrolet Bolt costs $8,000 more to purchase than a Hyundai Elantra GT, but the Bolt costs $15,000 less to operate over a 200,000-mile lifetime, for a savings of $7,000, our study found. In the luxury segment, operating cost savings are often aided by a tighter price differential. The Tesla Model 3 is priced lower than the gas-powered BMW 330i, and priced only about $2,000 more than an Audi A4. But the savings on operating costs for the Model 3 are about $17,000 when compared with either of the popular German gas-powered sedans....
Says Chris Harto, CR’s senior policy analyst for transportation and energy, and the leader of the study. “As battery prices and technology improve, prices come down, and more attractive models hit the market, it’s only going to get better.”

Fuel savings: The study shows that a typical EV owner who does most of their fueling at home can expect to save an average of $800 to $1,000 a year on fueling costs over an equivalent gasoline-powered car.
Maintenance and repair: The study also found that maintenance and repair costs for EVs are significantly lower over the life of the vehicle—about half—than for gasoline-powered vehicles, which require regular fluid changes and are more mechanically complex. The average dollar savings over the lifetime of the vehicle is about $4,600.

Depreciation: CR’s analysts also found that newer long-range EVs are holding their value as well as or better than their traditional gasoline-powered counterparts as most new models now can be relied on to travel more than 200 miles on a single full charge. As with traditional gasoline-powered vehicles, not all EVs will lose value at the same rate as they age. Class, features, and the reputation of the vehicle’s manufacturer all have an impact on depreciation.

Currently, EVs and plug-in hybrids account for less than 2 percent of overall new vehicle sales, although that number has been on the rise since the first viable EV models began to appear on the market almost a decade ago. EVs have been forecasted to constitute anywhere from 8 to 25 percent of the new-car market by 2030. Falling manufacturing costs for the lithium-ion batteries used to power EVs and plug-in hybrids has also brought down prices, although many consumers may still balk at the price difference between EVs and the most fuel-efficient gasoline-powered cars. Tesla announced this month that it would introduce a $25,000 EV within the next year, signaling that EV prices could be falling in the near future.

To be sure, total cost of ownership can vary depending upon region, electricity-service rates, access to charging, and a number of other variables. For example, someone who lives in an extremely cold region with high electricity rates and low EV incentives from state and local government agencies will pay more over the life of the vehicle than someone who lives in an area with a mild climate, inexpensive electricity, and favorable tax incentives.
Some states—such as Arizona, Texas, Alabama, and Arkansas—impose high fees on EVs that could hurt the economics of EV ownership. Also, some EV models are eligible for a federal tax incentive of up to $7,500.

The amount of money a consumer can save on fueling depends on the size of the vehicle and length of ownership, according to the study. Car owners could save an average of $800 the first year, whereas pickup owners could save $1,300 in the same period. Savings in the SUV class falls in between. After seven years of ownership, an EV in the car category will save its owner $4,700, while overall savings for electric pickup owners balloons to almost $9,000. Savings over the lifetime of a vehicle approach $9,000 in the car category and $15,000 for trucks.
By Benjamin Preston
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October 08, 2020

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