EV skeptics are quick to proclaim the
higher upfront costs of electric vehicles and their limited range compared to
gas powered cars. But while these arguments may have been true when the first
electric cars hit the market a few years, they no longer pass muster today.
Today’s EV landscape is vastly different
than the one three years ago, with technological innovation, improving
infrastructure, and higher fuel prices making them an increasingly viable
consumer option. In fact, if one were to take a life cycle analysis of electric
vehicles, they pay for themselves by applying basic laws of economics.
In this article, I’ll provide a brief
cost-benefit analysis of electric vehicles in an attempt to shed some light on
the long-term economic benefits associated with buying an EV.
The
Financial Cost of Electric Vehicles
Upon first glance, it may seem that
electric vehicles have a higher upfront cost than the average gas powered car.
And while this is certainly true in many cases, it doesn’t account for the host
of subsidies or the life cycle savings inherent to electric vehicles.
Take the Ford Focus Electric. With a price
tag of $32,490, it is a whole $9,000 more expensive than the gas powered
version. However, when you factor in the $7,500 federal tax credit, the Ford
Focus becomes $24,990. Many states also have their own subsidies available. For
instance, in
the state of Colorado, the state chips in another $6,000, making the price
almost $4,500 cheaper than the gas powered Focus overall. If you buy the car in
Illinois, the price decreases by $4,000, and in California the price decreases
by $2,500 due to state
subsidies.
Therefore, anyone interested in buying an
EV right now would likely not have to shell out much more than if he/she were
to buy a similar model gas powered car.
On top of the initial subsidies available,
electric vehicles can save consumers a huge amount of money over the car’s
lifespan. Now, of course the price of electricity changes depending on where
you charge up your car. But regardless of where you decide to charge your car,
the price of electricity pales in comparison to refueling a gas powered car. An
often quoted average is $2-3 per charge, but many places will have rates
hovering around $1.50.
On top of that, maintenance costs are way
cheaper in an electric car than a gas-powered car.
Overall, you’re likely looking at an
economic savings in many cases, right from the initial purchase through to the
end of the car’s lifespan.
Should
Consumer’s Be Anxious About Range Anxiety?
One of those intangible costs associated
with buying an EV is the influence of range anxiety. Without a doubt, the
majority of electric vehicles have lower range than most other cars. The Ford
Focus electric gets about 74 miles per charge, the Nissan Leaf gets about 73
miles, and the BMW i3 gets between 81 to
91 miles of range. The standout amongst electric vehicles of course is the
Tesla Model S with a range of 265 miles.
However, statistics on how far consumers
typically drive reveal some interesting insight. The average American drives
roughly 30
miles per day, which is well within the range of all of the above electric
vehicles. Longer trips over 300 miles constitute less than 5% of all trips that
current drivers might need to take. According to the Union
of Concerned Scientists, roughly 42% of Americans could make the switch to
electric without having to alter their driving habits.
Lifespan
Costs of EVs Will Decrease Over Time
Finally, the lifespan costs associated with
EVs will drop over time – these are benefits even consumers who buy an EV today
will experience.
First there’s the obvious savings of
avoiding fossil fuels. The price of gas has already gone up considerably over
the past 10 years and shows no sign of slowing down. The overall trend is
towards higher fuel prices, and thus higher expenses attributed to driving
around in a gas powered car.
Secondly, improvements
in battery technology will make replacing EV batteries cheaper in the
future. Presently, battery technology is improving by 6-8% every year. By 2020,
this could mean batteries would cost between $5,200 and $6,500, far less than
their current price tag of around $12,000. While critics often highlight the
high prices associated with replacing the battery down the road, they fail to
take into account the considerably lower prices for these batteries in the
future.
Conclusion
Electric vehicles are far cheaper than many
people realize when one accounts for subsidies available, lower maintenance
costs, higher fuel prices, and improving technology. The lifespan savings
inherent to an EV are its key selling feature when looking exclusively at their
financial viability over the long-term.
However, on top of the economics, there are
also the environmental benefits associated with choosing an EV. Environmental
benefits are incredibly difficult to account for in a cost-benefit analysis in
any tangible way, but they are certainly important.
One of the reasons I haven’t relied on the
environmental benefits associated with EVs is because they are by now quite
obvious, and are probably the biggest selling feature of EVs. However,
hopefully I’ve proven that EVs make sense purely on an economic level for a
consumer that is looking to save money over the long-term while also
contributing to a sustainable future.
Joseph
Tohill is a freelance writer and online communications specialist for
organizations in the sustainability sector. He has a B.A. in
Interdisciplinary Studies from the University of British Columbia and
spent most of his academic career studying sustainable urban
development; namely the interdisciplinary relationship between built
form and natural environment.
Labels: electric vehicle charging station, ELECTRIC VEHICLES, EV, Ford Focus Electric, state subsidies, Tax Credits, Tax Incentives
