So I have always wondered is an EV actually affordable? This has been hard to answer because so many things are changing constantly and I can say with confidence as the market grows the consumers (us) will benefit. But how does one go about determining when to make the switch? What key metrics do we keep an eye to help drive our decisions?
To answer these questions Driveway Enthusiast decided to dedicate some time to understand what matters when buying an EV. The idea is to narrow down to the items that provide the biggest benefits and what you can look for when shopping. To add some perspective we compared a Nissan Leaf to a Prius hybrid and an old commuter Mercedes (cause we actually had one with the data we needed).
How does it compare to a hybrid or gas car?
It’s important to look at operating costs since this will be the largest expense during the time of ownership so let’s do some back of the napkin comparisons. First, we need to make some assumptions. Here we assume that your commute is 20 miles one way and you make this trip five days a week for around 10,400 miles a year. Gasoline costs $6 dollars a gallon. A kilowatt hour costs $.28 cents charging the car at home during off peak hours. A Nissan Leaf averages about 3.33 miles per kilowatt hour. So given the assumptions the cost for electricity would be about $874 per year. A 2014 Toyota Prius can average 50 miles per gallon. So, here given the assumptions the annual cost for fuel would be about $1,248. This does not include the two oil changes at minimum or any scheduled maintenance. Now, my 1995 Mercedes E320 on a good day can average about 21 miles per gallon. Again, given the assumptions the annual fuel cost would be about $2,971. Here too we ignore the oil changes and any scheduled maintenance.
So, let’s look at the numbers for operating these cars for five (5) years. Again, just for the cost of the fuel or electricity. The Nissan Leaf would be about $4,372. The 2014 Toyota Prius would be about $6,240. Finally, the 1995 Mercedes E320 would be about $14,857…ouch! So just roughly the Nissan Leaf as compared to the 1995 Mercedes E320 could be a savings in operating costs of well over ten thousand dollars for the five years.
So we can see that over 5 years of ownership the Nissan Leaf wins in operating costs, but the price of new EVs are considerably higher than a new hybrid or are they…
How much does an EV really cost with rebates?
We can see the potential savings operating our EV example. So how much does one actually cost. That will depend on the list price as well as any dealer markup. Then there are the rebates which can be Federal, State, Local, regional and even the manufacturers may provide some too. These are somewhat complicated as some depend on your income. I can share, at the time of writing this article, that a Nissan Leaf was sold in Santa Cruz, California for $36,879 with a range of about 150 miles and the total of all the rebates available were approximately $18,250. So, net of the total possible rebates put the car at a cost of about $18,629 and that includes all sales tax, license, and registration fees. There are not many new cars in this cost range to even consider. Another point is that rebates are not taxed to our knowledge. You may even be able to use the commuter lane too. A visit to your local dealership and discussion with their finance manager should be able to cover these rebate questions.
The Nissan website does say the staring MSRP is around $27,800 and as low as $20,300. So the above numbers used include the dealer markups and local economy. According to the Toyota website the starting MSRP of a Prius is $25,075 but the rebates are very minimal compared to an EV. A Prius in the same area as the reviewed Leaf were going for $33,000 – $36,000. So far the the EV is becoming more economical in this financial study.
The new EV has much lower operating costs than a hybrid or old Mercedes. Over a 5 year span it is projected to beat a Prius by about $2,000 in operating costs. The price of a new Nissan Leaf compared to a new Prius is also less by about $13k – $14k in this regional case after rebates. So if you are on the fence for buying a new car the EV does make sense with the local rebates (again be sure to look into these before buying). The two biggest factors that will contribute to your savings are in the dealer price of the car and the local rebates. For our example we used a specific location to demonstrate the effect of the rebates however if the dealership actually sold the Leaf MSRP in Santa Cruz then the actual cost of the car would be less than 10K before taxes and such. Keep in mind that you also have the luxury of charging at home while you sleep, BUT the modest EV will probably not have the range of a hybrid nor will it have an equivalent re-charge (re-fill) time.
We did not compare to the used car equivalents because the prices vary so much and maintenance will play a much larger factor in operating costs compared to new. Also you do not get rebates on buying a used EV that I am aware of.
Helpful articles on car care:
How to clean a windshield – this covers how to get a long lasting streak free finish
Road trip planning guide – thinking about a family or friends trip, check this article before you go
Photo credits: Photo by CHUTTERSNAP on Unsplash