Above and beyond their ability to reduce local air pollution and carbon emissions, electric vehicles are also starting to make a lot of sense financially as well.
The transition to a cleaner transportation system based on electricity instead of gas and diesel has met with more than a few bumps on the road, most notably the higher initial costs of electric vehicles, as well as the comparatively short driving ranges possible before having to stop and recharge. However, early electric car adopters were willing to overlook those perceived shortcomings in favor of a car that had zero tailpipe emissions, which made for a more eco-friendly transportation option. And because it turns out that many drivers' regular transportation needs could easily be met with an electric vehicle that didn't have a massive range (and a correspondingly high cost), and that "range anxiety" mostly exists as a manufactured fear, not reality, those barriers to EV adoption aren't nearly as high now as they were just a few years ago.
Entry-level electric car prices are dropping, driving ranges are growing, and EV charging infrastructure is beginning to take off in many cities, so choosing to drive an electric car isn't such a compromise anymore, and it turns out that it can actually be a smart financial route to take. Earlier this year, an investment firm found that cost parity between gas & diesel cars and electric vehicles could be reached in 2018, and a recent report from the Union of Concerned Scientists (UCS) suggests that for many people in the 50 biggest US cities, driving an EV already costs much less than a conventional vehicle. In fact, EV drivers in the US can save between $440 and $1070 per year, "depending on the electricity provider, the choice of electricity rate plan, and the local cost of gasoline."
"While the cost of electricity varies across service providers and rate plans, using electricity to power a vehicle is almost always cheaper than using gasoline. Electricity prices are also less volatile than gasoline prices, and they are less sensitive to supply disruptions and international market movements because generation is distributed among many facilities and fuel types." - UCS
For its Going From Pump to Plug 2017 report, the UCS analyzed the costs to refuel gas vehicles and to charge electric vehicles in 50 big US cities, and compared them using average fuel efficiencies for both EV and new gas vehicles. The report found that in every one of those cities, electricity rate plans exist that could save the average electric car driver a significant amount of money each year, with the median savings being about $770. Although charging at standard electricity rates can still deliver savings, the savings are more pronounced when coupled with the lower time-of-use (TOU) rates for charging during off-peak hours that some utilities offer.
One common misperception about electric cars may stem from the fact that we're very well versed in gas prices, but not in electricity pricing, as stated by the report's author, David Reichmuth to CityLab. "Most people know how much gas costs - if you drive a car, you drive by gas stations, you see the costs - but a lot of people don’t think about how electricity is priced."
The report states that because most cars are parked at home overnight, TOU plans are "a good fit for most drivers," and that charging with TOU rates can deliver fuel costs "at least $1 per gallon equivalent lower than the current cost of gasoline." However, there is one major weak point to that, which is that these overnight charging regimens don't mesh very well with renewable energy production timing, according to UCS.
"Off-peak charging benefits the service providers by lessening peak electricity demand, but off-peak periods may not align with the availability of low-emission sources of electricity like wind and solar power. In areas with higher amounts of intermittent renewable generation, it may be important to coordinate electric rates for EV charging with the availability of renewables, both to reduce the cost of charging and to minimize emissions from EV recharging." - UCS
In addition to the reduced
fuel energy costs for an EV, drivers can also save money on maintenance costs, as electric cars don't need their oil changed, or their spark plugs or fan belts or timing belt replaced, and they have no emissions control devices that can fail, all of which add up over time. However, and it's a big however, one of the major financial incentives for buying a new electric car, the $7500 US EV tax credit, could be eliminated, which could throw a huge monkeywrench into the whole works.
The UCS rounded out the report with a number of policy recommendations that could help accelerate the electric vehicle transition, including advocating for "federal and state purchase incentives that are vital to making EVs an affordable and competitive option."