Do Electric Cars Really Save Money? HybridCenter Explores!

Electric cars have been all over the news lately. They have been heralded as the future of the automotive industry. With companies like Tesla helping to publicize their technology and pushing technical boundaries. It’s not a surprise that electric cars are getting so much attention.

Societies and governments are starting to realize how detrimental vehicle pollution is from regular diesel and petrol cars. They are not just bad for the environment, but also bad for people’s health. As our population grows rapidly, and more people are looking for transport. The automotive industry has to find a quick solution to tackle these issues.

Electric cars first gained attention in the late 1990s with the introduction of hybrid vehicles such as the Toyota Prius. The Prius was the pioneer for all electric vehicles, and sole-handedly created the market for hybrids in the US.

Supporters of electric vehicles have touted a myriad of benefits for electric vehicles. They are cleaner, have potential to be more efficient than gasoline vehicles and require less maintenance than regular cars. But, the main reason electric vehicles have gained so much popularity over recent years is the claim that they can lower fuel costs and save you money.

So, do electric cars really save you money? That’s quite a difficult question to answer. There are many different types of electric vehicles with different technologies. Which means they will have their own specific costs that are incurred in their manufacture and operation. For example, with plug-in hybrids and full-electric vehicles such as Battery Electric Vehicles, you need to consider the cost of electricity for charging the battery. But, for conventional hybrids, you don’t need to think about electricity costs. Because their batteries don’t need to be charged via an external source, like in the case of BEVs and plug-in hybrids.

So, whether electric cars can save you money will depend on the type of electric car you’re considering.

Costs to Consider For Electric Cars

Apart from the cost of the vehicle itself, there are other costs and benefits you need to consider when purchasing an electric car:

Upfront Cost

First up is the actual cost of the car. Electric cars tend to have quite high upfront costs because some of the technology is still relatively new, such as battery packs.

‘Fuel Costs

Depending on the type of electric vehicle you are going for, you need to consider the cost of recharging or refuelling. For ones that need charging, like Battery Electric Vehicles (BEVs) and Plug-In Hybrids, you need to consider the cost of electricity. If you’re considering buying a Fuel Cell Electric Vehicle (FCEV), then you need to consider the cost of hydrogen fuel.

Taxes or Subsidies

Depending on where you live, certain countries have lower taxes and purchase subsidies for electric vehicles to encourage people to buy them.

Additional Supporting Costs

Certain types of electric vehicles will need specialized equipment to keep them operating. For example, BEVs and plug-in hybrids are quickly chargable using EVSEs (Electric Vehicle Supply Equipment) which you can purchase for your home, so that you don’t need to go to a service station to charge your car.

Replacement Part Costs

You also need to consider how much replacing a certain part of the car will cost you. In almost all electric vehicles, one of the most important replacement costs you need to consider is that of the battery. Especially if you are considering a BEV that is entirely dependent on a battery pack for power, you need to research how expensive that would be to replace.

Also, not all types of EVs use the same kind of batteries. There are different types of batteries used in EVs such as Nickel-Metal Hydride, Lithium-Ion and Lead Acid Batteries that all have different costs. For example, BEVs mainly use Lithium-Ion because they offer the best power-to-weight ratio but are also the most expensive to replace. So, the battery replacement costs for a BEV can be costly since they solely rely on them for power.

Cost of your Efforts and Time

Though not an explicit cost, it is an important thing to consider if you’re busy. Some EVs like BEVs and Plug-In Hybrids need to be charged regularly and charging EVs isn’t the most convenient. It can take several hours for the car to reach full charge

Measures to Compare Vehicles

One method to effectively compare the fuel costs between vehicles is to look at their fuel economy. Fuel economy is simply the maximum distance that can be travelled per gallon of fuel, known as miles per gallon (mpg). This can be used for FCEVs (miles per gallon of hydrogen fuel) and regular petrol and diesel cars.

Because you can’t measure electricity in gallons, there is a measurement – equivalent miles per gallon. This measures the amount of electricity that has the same energy as a gallon of gasoline and how many miles can be covered for this amount of ‘equivalent’ electricity.

The higher the fuel economy, the less often you will have to charge the vehicle and the more you will save on fuel costs. If the fuel economy is low, this could mean that the car doesn’t use the fuel effectively and a lot of the energy is wasted. So, you will end up with high fuel costs.

Costs of Owning an Electric Vehicle

In general, there are several ways that electric vehicles save money:

Higher Efficiency and Fuel Economy

Electric motors are inherently more efficient than internal combustion engines, so they waste less fuel as heat. EVs also employ regenerative braking which recovers energy that would otherwise be lost during braking. As a result, they have higher fuel economies which means you save on fuel costs.

Lower Cost of Electricity

The recharging cost of BEVs and plug-in hybrids will be lower than if you use that same energy in the form of gasoline. Electricity prices are more stable in comparison to the price of gasoline that fluctuates in the range $1.50-$4.0 for each gallon. To travel the same distance as a gallon of gasoline, the cost of electricity would only be around $1.20.

Tax Reliefs

Some countries such as in Scandinavia will encourage people to buy more electric vehicles by offering tax cuts and vehicle purchase subsidies.

Less Maintenance and Repair Costs

The transmission system for an EV is much simpler than that of a regular car because there is more electronic control over it. To change an EV’s speed, all it has to do is to change the current that is feeding into the motor.

This means that EVs have less moving parts and hence lower chances of breakdowns and repairs, since moving parts are the main cause for vehicle failures. This will save you maintenance and repair costs.

On average, the annual average cost of operating an EV is approximately $485. While that of a gasoline car is around $1,117. So, you definitely save up on annual operating and fuel costs.

Battery Electric Vehicles (BEVs)

These are electric vehicles that solely rely on electric power and a battery pack. They don’t have an internal combustion engine, only have electric motors and don’t use gasoline. The battery pack is the most important component in terms of cost.

BEVs are reliant solely on the battery pack, so the ones they have need to be light and powerful. This is why a lot of them use Lithium-Ion batteries, because they offer the best power to weight ratio. However, they are also the costliest battery type. The cost of replacing the battery depends on the car model and manufacturer. The battery on a Nissan Leaf, for example, costs $5,499 to replace without the installation charge.

The upfront cost of a BEV is also quite high since they use expensive Lithium-ion batteries. High range, high-end cars like the Tesla Model X costs around $85,000 and $35,000 for the Model 3. They can cover a range of just under 240 miles on a full charge. A Chevy Bolt is around $38,000. So, they’re not really the cheapest.

However, with BEVs, there is a trade-off between the upfront cost and the savings in fuel costs. They can effectively half your ‘fuel’ costs. Primarily due to the low cost of electricity. It will take years to pay off this upfront cost, so it depends on how long you own it.

For charging, you can charge a BEV at home on a standard 120V outlet at home. But, this will take hours. An EVSE is a faster method of charging because it uses a 220V circuit. They are available at service stations but it can be convenient to own one. This is an additional cost that can set you back around $700 for a good charger.

Fuel Cell Electric Vehicles (FCEVs)

If you’re going for a FCEV, the main ‘fuel’ cost will be that of hydrogen fuel. Currently, hydrogen fuel costs are almost the same as that of gasoline at around $0.13 per mile. The upfront costs are very high, however. The Toyota Mirai costs around $57,500 compared to the cost of a Prius, $23,475.

Plug-In Hybrid Electric Vehicles (PHEVs)

PHEVs can rely more on electric power because they can charge externally like a BEV. So, like a BEV, the costs here include that of electricity for charging, cost of an EVSE charger and a battery replacement. Different manufacturers use different types of batteries, so the cost can vary.

With PHEVs, you also need to factor in the cost of gasoline in addition to electricity. A plug-in hybrid can cost you upwards of $25,000 upfront.

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