EVs cost = ICE cost

Investment Analysis Clubs Macro Economic Trends and Risks
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Inside Clean Energy: Some EVs Now Pay for Themselves in a Year

July 14, 2022

Though you’ll pay more for them at the outset, electric vehicles are now a better deal than cars that run on gasoline, due to much lower fuel and maintenance costs and a $7,500 tax credit.

Pavel Molchanov did the math so you don’t have to. He’s been analyzing numbers for nearly 20 years at Raymond James, the financial services firm. His job is to give clear-eyed advice to investors, free of politics and marketing. And his advice is this: Buy an electric car.

There are two reasons why EVs are cheaper to operate. The first is that they are less expensive to maintain. The second has to do with fuel: the cost of fully recharging the EV with electricity is less than filling up a car with gas. Those combined savings add up to eventually cover the difference in sticker price between an EV and a gasoline-powered vehicle.

Speaking of magic numbers, there is one thing that Molchanov deliberately left out of his complicated calculations. He calls it the icing on the cake: the U.S. government is offering a $7,500 tax credit toward the purchase of a new electric car. When he put that tax credit into his model he found that an EV paid for itself in less than a year.

https://insideclimatenews.org/news/14072022/inside-clean-ene…

Jaak

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Hi Jaak,

I read most of your posts but don’t reply to your posts too often as I feel somewhat unqualified to engage in a detailed discussion of these energy conservation topics. This post struck me to respond though…

I’m struggling to understand how the author could justify this purchase for ME. As stated here previously, I live in the Southeastern MA area where utility rates are very different depending on whether National Grid or EverSource Energy are servicing your home or whether you live in a town or city that provides municipal electricity (which is about 1/4 the cost of what the “for profit” energy companies charge).

https://www.nationalgridus.com/MA-Home/Default.aspx
https://www.eversource.com/content/ema-c

Local Municipal Electric Company → https://www.tmlp.com

How can someone justify averaging out these material differences in energy costs? I think the decision to purchase an EV are highly dependent on the cost of energy supplied at your home. Unfortunately, if you’re a National Grid or EverSource customer, your cost of energy can be significantly higher.

I hope folks do their own due diligence to determine the true cost for THEM and not rely on generalities / averages.

'38Packard

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“And his advice is this: Buy an electric car.”

What kind of advice is this? Advice should be tailored to an individuals needs and restraints. Buying an electric car is not for everyone. Cost of electricity is wildly variable throughout the US. The ability to charge at home is not a given for the many condo/apt/renters in varying locations. The ability to charge on the road is not evenly distributed around the country. Winter conditions are a major factor in how well an EV will perform. Yada-Yada -

Advice like this is absurd!

My advice is everyone should grow wings and fly where they need to be.

JimA

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I will add to that…

A good friend hearing of the Ford Lightening’s range dropping with a payload said it is a non issue to workers. The reason most of them do not travel 100 miles to work every day.

The Ford Lightening is in fact a working person’s truck and more.

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I hope folks do their own due diligence to determine the true cost for THEM and not rely on generalities / averages.

Sound advice, no doubt!

Looking at it from a different perspective, total car sales have been declining while EV sales have been increasing which means that buying preference is shifting from ICE to EV. Could it be the economic advantage? The desire to go green? The instant torque - performance? The silence? Not having to deal with a dealer?

One statistic mentioned lately is that EVs are at 5% of sales (in the US) which supposedly marks the bottom of the “S” growth curve. I always thought that happened at 15%

Electric vehicles hit 5% of new cars sold in the US

That moment could be here for electric vehicles in the US. EVs accounted for 5.6% of the total auto market in Q2, according to a new report from Cox Automotive. While that share is still pretty small, it carries major implications.

Why? Because 5% is the tipping point after which EVs skyrocket from niche ? mainstream, according to a Bloomberg analysis of 19 countries. It happened in Norway in 2013, in China in 2018, and in South Korea in 2021. Five percent is apparently the threshold where people go from thinking “My neighbor has an EV…that’s odd” to “Three people on my street have EVs…I think I want one, too.”

https://www.morningbrew.com/daily/stories/2022/07/14/electri…

The Captain

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“Inside Clean Energy: Some EVs Now Pay for Themselves in a Year”

The 2023 Chevy Bolt starts at $26k.
We paid <$25k for our 2021 Bolt.
An equivalent Chevy Trax (small CUV) costs $25k.
At those prices you don’t need to do any math.

We’re currently getting about 175mpge from the Bolt.

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JaaK:"the U.S. government is offering a $7,500 tax credit toward the purchase of a new electric car. "

Both Tesla and GM have used up their allocations of cars available with the Federal $7500 tax credit.

Others likely will soon reach that level, so it will disappear quickly.

Some states offer rebates but not all.

t.

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Winter conditions are a major factor in how well an EV will perform.

Only for some makes. For others, there is little difference.

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Speaking of magic numbers, there is one thing that Molchanov deliberately left out of his complicated calculations. He calls it the icing on the cake: the U.S. government is offering a $7,500 tax credit toward the purchase of a new electric car. When he put that tax credit into his model he found that an EV paid for itself in less than a year.

There is a reason the credit was left out. It doesn’t change the price of the car, merely who pays for it.

DB2

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There is a reason the credit was left out. It doesn’t change the price of the car, merely who pays for it.

ICE lovers subsidize EV lovers. Ain’t taxes and subsidies fun?

The Captain

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ICE lovers subsidize EV lovers. Ain’t taxes and subsidies fun?

EV lovers also subsidize EV lover.

PSU

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And let us not forget that everyone currently on the planet and all their descendants for at least a century are subsidizing current ICE and other carbon users.

david fb

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The problem I have with the article is that the author works hard to get the EV and ICE cars in purchase price so they can argue the EVs quickly pay for the extra cost through fuel and maintenance savings. In this case, the study choose to compare an entry level Leaf with a 149 mile range with a Sentra with over 400 mile range. They chose not to use the higher mileage Leaf with a 212 mile range and $35k price tag.

PSU

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We’re currently getting about 175mpge from the Bolt.

That’s incredible! The EPA MPGe for the Bolt is 115, and usually people experience somewhat lower than EPA numbers in real life.

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<<We’re currently getting about 175mpge from the Bolt.>>

That’s incredible! The EPA MPGe for the Bolt is 115, and usually people experience somewhat lower than EPA numbers in real life.

It is, isn’t it? So incredible that I went back and checked my calculation. Yup, I fat-fingered it.

We’re getting 4.6 - 4.8mi/kwh on the car’s guess-o-meter. 1 gal gas is 33.7kwh equivalent.

4.833.7 = 162mpge
4.633.7 = 155mpge

Still pretty incredible! That’s in-town driving, pretty much perfect conditions.
It goes way down in winter with heater use. More like 3.2mi/kwh (108mpge).

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It is, isn’t it? So incredible that I went back and checked my calculation. Yup, I fat-fingered it.

We’re getting 4.6 - 4.8mi/kwh on the car’s guess-o-meter. 1 gal gas is 33.7kwh equivalent.

4.8*33.7 = 162mpge
4.6*33.7 = 155mpge

Still pretty incredible! That’s in-town driving, pretty much perfect conditions.
It goes way down in winter with heater use. More like 3.2mi/kwh (108mpge).

It’s really quite good. When people compare ICE to EV, they usually bring up all sorts of things - fewer moving parts, almost no fluids to change regularly, etc. But what many fail to realize is how much more efficient EVs are than ICE vehicles on average.

Over my entire period of ownership, nearly 10,000 miles, I have gotten an average of 3.6 mi/kWh, and I am not at all timid while driving, I make liberal use of the ample acceleration, and on long highway trips, I am traveling at 80+.

But the best way I’ve found to describe the efficiency is as follows. My previous ICE car, a nice 4-door sedan, would get me about 50 miles from $10 of gasoline (today that would be about 38 miles, but a year ago it was about 50 miles). And my current EV, a nice 4-door sedan, gets me about 280 miles from $10 of electricity. Both cars are in the same price range, in fact almost to the dollar, and both cars are feature laden.

So, the fact is, that even if ALL your electricity is generated using fossil fuels (and that isn’t the case anymore in most places), you are still using FAR LESS fossil fuels overall due to the much higher efficiency.

(As an aside, I am shocked that my car can provide such good performance of acceleration and still have the highest, or nearly the highest, EPS MPGe rating.)

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Could it be the economic advantage? The desire to go green? The instant torque - performance? The silence? Not having to deal with a dealer?

BINGO! We have a winner!

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