Do Electric Cars Save Money?

Driving an electric car is better for the environment than driving a regular gas-powered vehicle. And in some cases, such as in California and other areas with clean energy incentives, there’s also a potential financial benefit to choosing an electric car. Do electric cars save money? The answer generally depends on how far you drive and what kind of car you choose.

Electric Savings: Gas vs. Electricity Prices

According to the US Census Bureau, Americans drove their cars approximately 13,476 miles per year in 2015. On average, this adds up to 38 miles per day (13476/365 = 38.01). This number varies depending on the driver’s age, location, and whether or not they own (or rent) their home. It also fluctuates significantly by state. People who live in cities like Los Angeles, Chicago, and New York with excellent public transportation might drive less than those who live in areas where driving is more necessary.

What’s the Cost Difference Between Gasoline and Electricity?

According to data from EIA, as of September 2017, prices for one gallon of gasoline nationwide averaged $2.49. The average cost for a kilowatt-hour As (kWh) is 12 cents. As a result, 38 miles per day would amount to about 29 kWh per day. At an average price of 12 cents per kWh, the annual cost of driving a car that distance would be approximately $358.

In average conditions, an electric car could end up saving drivers more than $300 annually. In regions where electricity is more expensive (like Hawaii or New York), people might find that they save even more money with an electric vehicle. But if you live in a state where electricity is less expensive – like Mississippi – you’d lose money by not using gasoline.

How Much Does it Cost to Acquire an Electric Car?

If you want to save money by buying an electric car, it’s important to consider the acquisition costs. A new Tesla Model S P100D might cost close to $150,000 before federal and state incentives are factored in. If you’re lucky enough to live somewhere with wealthy neighbors who can help defray those costs or help you finance the purchase through a rent-to-own program, then an electric vehicle could be worth it financially. But if you live in a more modest neighborhood where cars are paid off quickly, electric cars might not make much sense for your family at this time.

A Taxing Calculation

Live in an area where electricity costs are relatively low. Your city or state government might offer clean energy incentives that help offset the purchase price of buying an electric car. For example, California provides a Clean Vehicle Rebate worth up to $2,500 for new qualifying vehicles (see below). The rebate can be combined with other incentives like the federal tax credit of up to $7,500. This helps lower the cost of purchasing a new electric vehicle considerably. If you buy a used electric car instead, you can also take advantage of other available state and local programs to encourage people to drive cleaner cars.

How Electric Car Saves Money?

An electric car can save money differently. There are lots of benefits of using electric vehicles.

  1. The cost savings on gasoline –  Electric cars can provide you with a huge amount of money on gas. This is because electric cars do not require the same type of gas and instead use electricity.
  2. The cost savings on maintenance and repairs – Electric vehicles have fewer parts than gas-powered vehicles, which means that they generally require less maintenance and replacement parts to stay running. No oil changes, no transmission fluid changes, etc.
  3. Less carbon emissions – Most electric cars get their power from an electrical grid that gets its energy from renewable sources like solar or wind power without releasing any harmful emissions into the environment. The clean air benefit helps everyone.
  4. Battery Life & Cost – Large banks of rechargeable batteries power electric cars. Batteries lose their ability to hold a charge over time, but if you need to replace them or the battery pack itself, it’s usually significantly cheaper to do so.

 

Do electric cars save money? The answer is, Yes.  Based on all the above information, we can understand the benefits of using electric cars. Electric cars can cost more to purchase than gasoline-powered vehicles, but they can save you money in the long run based on how much you would have spent on gas and the wear and tear under typical driving conditions.