If you’re like most people, you’re probably someone who is interested in learning how to save money any way you can. Buying an electric-powered car like a Tesla is going to cost a pretty penny as far as an upfront cost is concerned, but will it save you money in the long run?
Electric vehicles (EV) are guaranteed to save you money over filling up your tank with gas in the long run. That much is obvious. But what about everything else? What about maintenance cost, upfront cost, and everything in between? If you want to learn how to save even more money then we’ll teach you everything you need to know about saving money with electric cars.
Fuel Cost VS Electricity Cost
Regardless of if you drive a gasoline-fueled vehicle or an EV, there’s going to be some costs associated with driving. The average amount an American spends on a vehicle that’s powered by gasoline is around $1,120 a year, compare that to the cost of driving an EV, it’s closer to $485 a year. Driving an electric car would save you more than twice what you would spend if you were to drive a conventional gas-powered vehicle.
Fuel Cost – The national average for fuel right now is $2.54 per gallon. Depending on how good of gas mileage your vehicle gets, that’s going to be one of the determining factors that tell how much money you’ll have to spend on gas every year. If you’re getting 20 mpg and on average you drive 1,000 miles (1,600 kilometers) in a month. You’ll be paying $127 every month. This is just an average example of what to expect, different factors will come into play when trying to calculate your mpg.
Electricity Cost – Depending on where you live, you’ll have to pay a given rate for the amount of electricity you use. Certain cities will be cheaper than other cities, for example, electricity cost in Seattle, WA is 11.2 cents per kWh and in Spokane, WA it’s 5.71 cents per kWh. About half the price yet it’s still within the same state.
In order to find out how much your EV costs you per mile, you’ll need to find out two different pieces of information.
- You need to know much your marginal electricity rate per kilowatt-hour (kWh) is.
- You need to know how much kWh of electricity your EV uses every 100 miles (kWh/100 miles).
In order to find out the cost to charge your electric car at home, you multiply your vehicles kWh per 100 miles by your electricity rate for the time of day.
The other way to do it would be to take how many kWh it costs to completely recharge your depleted battery and multiply that by your electricity rate. For example, if your EV requires 50 kWh and you pay 0.12 cents per kWh then 0.12 x 50 = $6 to fully charge it’s battery life.
There are also a lot of other variables that come into play when you have an EV. You might want to ask your electricity company if you can sign up for a TOU (time-of-use) rate if you don’t already have one. With TOU, it will make using electricity cheaper at night and more expensive during the day. You’ll have to do a comparison to see how you can save the most money; TOU rates will also make it more expensive to use electricity for the rest of the house as well if you use a lot of electricity during the day.
Operating Costs
Another thing we have to take into consideration is the operating cost and the maintenance cost of using an EV. The good thing about driving an EV is that the operating costs will be cheaper. If you haven’t already figured it out now, the cost every mile you drive is going to be dramatically cheaper no matter what rates you pay for your electricity bill (just make sure not to charge too much during the day if you’re on a TOU rate).
If you want to really save money when it comes to operating cost you can always look at buying solar energy panels, this is a great solution for getting free energy to charge your car. Regardless of if you have solar panels or not, there are massive savings that you can receive through driving an EV.
There are government grants, rebates, incentives, and tax breaks that you can receive for having solar panels, so if you own an EV you might want to look into some of the benefits that come along with owning them. If you have the money for it you should definitely think about investing in solar panels, they’ll save you a lot of money over time.
Depending on what country you live in, insurance rates for driving an EV could be lower as well. Something you should always take into consideration before deciding if you want to buy an electric car over a combustible gas engine car.
Maintenance Costs
Since there aren’t as many components to an EV, there’s less of a chance your EV experiences some type of malfunction. That’s not to say they never have any problems, but typical problems are generally with the charger or one of the other half moving parts that make up the motor. Maintenance cost repairs for an EV is on average 1/3rd the cost of what it takes to fix a gas-powered engine.
One of the biggest downfalls of owning an EV is that the batteries depreciate over time and don’t hold charges as long. Luckily, technology is rapidly advancing at an exponential speed and they’re constantly working on making more efficient batteries at a cheaper cost, but so far that hasn’t translated to making electric cars more affordable.
Maybe in the next 5 – 10 years, we could see a big drop in price, but right now the savings we make from driving them are well worth the price. If you don’t think so you can always try leasing one instead.
Potential Savings
If you’re looking at buying a brand new EV the average price is between $30,000 – $35,000 per car. The average price of a sedan is closer to $20,000. Depending on how much you pay for electricity and if you own solar panels or not (we’re assuming you don’t), then you should expect to save around $860 for every 15,000 miles (24,140 kilometers) you travel.
Now at first this might not seem like a lot of savings, but when you factor in other things such as, less time and money spent on fixing the car, being able to cut back on even more expenses with rebates, incentives, and tax breaks, it makes it easier to potentially save an incredible amount of money by owning an EV.
Battery Life
The most important part of an EV is its battery life. Since they run on lithium batteries, the charge will depreciate the longer you use it and the more times you charge it. Depending on how much life you charge your battery at, it can have serious implications on the lifecycle of the battery later on. Research has shown that it’s best to charge the battery between 25% and 85% capacity. Charging the battery between these two numbers will give your battery a great balance between working capacity and battery life.
There’s also a correlation between fully charging your battery and leaving it unused for an extended period of time. If you charge it to 100% and store it in temperatures above 77° F (25° C), then battery degradation will occur without even using the battery. So if you live somewhere hot where the temperatures are high, you should think twice about leaving your EV fully charged for an extended period of time without using it.
Conclusion
As critics everywhere agree, you’re absolutely going to save money when it comes to driving an electric car. However, there will be a myriad of other things that will determine exactly how much money you can save. From the amount of kWh/100 miles your car gets, your current energy rate, your TOU, if you own solar panels or not, etc. you can see that there are a lot of variables that come into play when figuring out exactly how much you’ll be saving.
Electric cars are becoming more popular as we head further into the future, however, the upfront price can deter a lot of people from purchasing them. The best thing you can do when trying to decide if you should purchase an EV or not is to calculate everything ahead of time.
Check out how much you pay for electricity, call your electric company and ask about TOU plans, and do some research into different types of electric cars. You’re guaranteed to save money over the long run, exactly how much you’ll save will depend on a lot of different things but generally speaking, you should be able to save a substantial amount.
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