How Long Does it Take to Recoup the Extra Cost of an Electric Car?
From a cost perspective, buying a plug-in vehicle is an investment that pays off the more you drive. In the United States, the additional purchase cost of a battery-powered vehicle is offset to at least some degree by a $7,500 federal tax credit, but even with that credit most electric cars still cost more than their most popular internal combustion competitors.
In many cases though, this added cost is more than made up for by fuel savings over the long term. Electricity isn’t free, but electric costs per-mile pale in comparison to even the most efficient comparable gas vehicles.
So just how long does it take to recoup the “plug-in premium?”
It depends on the vehicle. Here we look at seven of the leading electric vehicles and compare them to their closest gas-fueled equivalents. Using current average electric and gas prices we calculated fuel costs per mile for each model and added them to the post-credit MSRP of each vehicle over time—or “miles” as the case may be.
Under this simplified approach (and without factoring in maintenance costs), nearly every one of these plug-ins recouped its premium and then some during the normal lifespan of a vehicle—with some offering significant cost-of-ownership savings over time.
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Nissan LEAF vs. Honda Civic
The base-level 2016 Nissan LEAF is a low-cost compact EV with a big enough range to handle the vast majority of daily consumer and fleet demands on a single charge. The Honda Civic is one of the most popular and well-reviewed compacts on the market, but it doesn’t take long before the LEAF starts paying fuel cost dividends.
Chevy Volt vs. Volkswagen Golf
The Volt is an extended range electric vehicle, meaning it can run on gas as a hybrid once its battery is depleted. But for many consumers and fleets, it’s possible to go almost entirely gas-free thanks to the Volt’s substantial 53-mile electric range. Unfortunately, the added freedom of a gas engine comes at a cost, making the Volt’s hefty price premium compared to the Volkswagen Golf difficult to offset.
BMW i3 vs. Audi A3
The BMW i3 is a small compact electric vehicle with a range of 81 miles. For its internal combustion analogue, we chose the Audi A3, whose mix of stylishness, performance and size appeal to a similar demographic of buyers.
Tesla Model S vs. Mercedes-Benz CLS-Class
Not may cars can compare to the Model S in terms of performance or luxury, but the CLS-Class is one of the few cars on the market that puts up a fight. On a cost basis, the Model S starts out roughly $3,400 cheaper than the CLS thanks to the $7,500 federal tax credit and offers luxury buyers huge fuel cost savings the very first time they take it for a spin. Over the course of 100,000 miles, the Model S costs more than $12,000 less to own than the CLS-Class, which requires expensive premium gasoline.
Smart ED vs. Smart ForTwo
You don’t have to look far for a solid comparison point for the Smart ED. The diminutive Smart ForTwo had already become in fleet applications when, in 2013, Smart released an electric version of the two-seater. Unfortunately, it’s hard to compete with the original ForTwo’s sub-$13,000 MSRP. The Smart ED is still a very low-cost vehicle to drive, but you’ll have to drive it almost 120,000 to reap any savings from its electric drivetrain.
Ford Focus Electric vs. Ford Focus
Another obvious comparison can be found in the Ford Focus and its zero-emissions sibling, the Focus Electric. In this case, the plug-in variant comes at a very reasonable starting price, making its path to ownership savings a relatively short 52,752 miles.
Tesla Model X vs. Porsche Cayenne
The Tesla Model X only recently began selling at high volumes, and the 75-kWh variant of the electric SUV was announced just months ago. Still, the lowest priced Model X looks to be a great value proposition compared to other luxury performance crossovers. The Porsche Cayenne S, which is considered to be one of the best luxury small SUVs on the market, starts out slightly cheaper than the X 75D. But in less than a year, its fuel costs start to really add up.
Unpredictability Complicates Purchase Decisions
These kinds of analyses can help give us some perspective on long-term ownership costs that don’t get included in sticker price, but they’re always changing. The average price of a gallon of unleaded gas in the U.S. today is just $2.36, but exactly three years ago it was hovering around $3.60 per gallon.
For a sense of how significant that difference is, if we were to plug gas prices from June 2013 in and compare them against the Chevy Volt, the Volt would recoup its premium over about 60,000 miles—a little more than half its current cost recovery distance versus the VW Golf. Electricity prices, resale values, available discounts and incentives can also fluctuate wildly, often leading consumers and fleet managers to delay purchasing plug-ins out of uncertainty.
The key making an educated investment in electric drive—one that is almost certain to pay off in the long run—is knowing your needs and finding the car that best matches them. How many miles do you drive each year, and how often do you travel outside of the range capabilities of low-cost EVs like the LEAF? How much does gas and electricity cost in your area compared to other parts of the country? In states like California, gas prices are often more than 20 percent higher than average.
Predicting the trajectory of fuel prices at a given moment is a task even the experts frequently fail at. Understanding your driving patterns and how to maximize efficiency and fuel savings from your plug-in can be the difference in providing the additional clarity needed to take the plunge and reap the rewards of driving gas-free.