EV vs. Gas: Which Cars Are Cheaper to Own?
Update 10/28/2022: We have updated this story with the latest data and information to best represent the costs associated with owning the example vehicles.
Some EV aficionados
might tell you that electric vehicles are cheaper to fuel and maintain, therefore
they must be cheaper to own and operate. EV skeptics will counter with the
premium pricing of many EVs, something that's quantifiable when a brand sells
both a gas-powered and full EV version of the same vehicle. So, are EVs really
less expensive over the long haul of ownership? Sort of. Sometimes. As they
say, it's complicated.
To investigate whether
an electric vehicle truly is cheaper than its gas counterpart to own and use as
daily transportation we chose two models in the US market that are available
with both powertrains: The Hyundai Kona and Kona Electric , and the Ford F-150 and F -150 Lightning. We
compared as much about their running costs as we could dig out from credible
sources.
Three-Year Cost
Analysis
We decided on an
examination of the first three years of overall ownership cost. And we stuck
with the numbers we could pin down. For the purposes of the clearest comparison
possible, we are not including either financing costs or insurance premiums.
How you choose to finance your vehicle—the term of the loan and the interest
rate, or whether you decide to lease—can have a significant impact on your
total costs. And insurance costs are widely variable as well, depending on your
state, your driving record, and the coverage you choose.
Initial Purchase
Price
Our journey starts
with the purchase price. For the Hyundais, we used the most basic trim, and for
the F-150s we used the XLT trim, which is a step above the most basic work
truck trim in each model. We also equipped the Lightning with the
Standard-Range battery. Any applicable Federal tax credits for the two EVs are
calculated later in the calculations. The cars' purchase prices (including
destination charges) are as follows:
Hyundai Kona : $22,595
Hyundai Kona
Electric : $35,295
Ford F-150 : $40,960
Ford F-150
Lightning : $54,769
Miles Driven
For annual miles
driven, we went with 15,000—the de facto average mileage stat for US drivers
for decades. Both the electric vehicles included have EPA-estimated ranges near
the industry median—258 miles for the Kona Electric and 230 for the F-150
Lightning—which should get owners to that number just fine. The result was a
three-year mileage count of 45,000 miles.
Maintenance Costs
To calculate
maintenance costs, we use AAA's 2022 Your
Driving Costs analysis . It determines how much you pay per mile in maintenance to drive a
vehicle. The costs are placed into market segment silos (sedan, SUV, Pickup,
EV, etc.) for service items such as tires, brakes, oil changes, and repairs
over a five-year period. Yes, that's longer than our three-year timeline, so in
this case, the pre-mile figures might be inflated beyond what you would likely
experience with these cars in three years. And these maintenance costs are
higher than we experience in our long-term 40,000-mile tests. But AAA's data
gives us a solid basis for comparison, and all the subject cars are treated
equally. As expected, without oil changes or other engine maintenance, the EVs
are easier to maintain. Maintenance costs per mile and over the full 45,000 miles
are as follows:
Hyundai Kona : $0.0984 per mile / $4,428
Hyundai Kona
Electric : $0.0794 per mile /
$3,573
Ford F-150 : $0.0933 per mile / $4,199
Ford F-150
Lightning : $0.0794 per mile /
$3,573
Comparing EVs and gas
vehicles isn't a straight comparison in most cases.
Energy Usage
To calculate the
energy usage of both types of cars we used the EPA's gallons and kilowatt-hours
used per 100 miles. For both of these units, the lower the number, the more
efficient the vehicle. As you can see below, both the Hyundais are more
efficient than the F-150s, which is to be expected for the subcompact SUVs
versus full-size trucks.
Hyundai Kona : 3.1 gal / 100 mi
Hyundai Kona Electric : 27 kWh / 100 mi
Ford F-150 : 5.0 gal / 100 mi
Ford F-150 Lightning : 48 kWh / 100 mi
Gasoline Costs
For gasoline costs, we
used the national average price of gas in September 2022: $3.70 per gallon for
regular, which both the Kona and the F-150 take. As you likely know, gas prices are quite volatile these
days , with
inflation, the Russian Invasion, and other factors both raising the price and
making future prices hard to predict. Nevertheless, the price of gas has trended downwards recently and may continue in that direction, though it's
unlikely we see pre-pandemic prices anytime soon. Still, for the sake of math,
let's assume it stays at October's price for the forested future. Here is the
cost to drive the gasoline-powered Kona and F-150 for 45,000 miles.
Hyundai Kona : $5162
Ford F-150: $8,325
Charging Costs
Charging costs are
tougher to determine. First off, many charging stations charge per minute
instead of per kilowatt-hour. This way of charging can be frustrating for EV
owners. Fortunately, there are changes coming, and Electrify America , one of the largest charging station networks,
charges $0.43/kWh for DC fast charging and Level 2 charging in our home-base
state of Michigan. Some of Electrify America's units can charge at a rate of up
to 350 kW, but most EVs can't accept charging that fast. Still, paying per kWh
evens the playing field cost-wise between electric cars that charge slower and
faster.
To determine at-home
charging costs, we took the average
rate of $0.1546/kWh in
the United States for July 2022, the most recent rate available. Electric
utility rates in the United States vary wildly. In 2020, Louisiana paid only
$0.0751 per kWh while Hawaii's electric rates are a wallet-busting $0.2755 per
kWh. So the price of charging at home is dictated by where you live.
Another piece of the
EV charging puzzle is the split between at-home and on-the-go charging. A June 2021 study on EV consumer behavior by the Fuels Institute
found that 70–80% of charging occurs at home or at a workplace parking lot. We
went with an 80/20% split between home/public charging for our calculations.
We threw all these
numbers on charging into a bucket to determine the amount it would take to keep
the two EVs charged up enough to cover 45,000 miles.
Hyundai Kona
Electric : $2548
Ford F-150
Lightning: $4,529
Depreciation
The final piece of
data affecting the cost of ownership of any vehicle is a big one: depreciation.
It's a knotty subject, as predicting depreciation is an educated guess based on
past experience, customer demand, vehicle availability, brand reputation, and,
for all we know, the phases of the moon. A quick look at the numbers and it's
clear that EVs depreciate faster than their gas counterparts. Cari Crane,
Director of Insights at ALG (which used to be known as Auto Lease Guide), told
us that the high cost of electric vehicles contributes to their steeper
depreciation. "Dollar wise, we do see a premium on top of a compatible ICE
(Internal Combustion Engine) vehicle comparably equipped in age. It's just that
price point that's really causing that steeper depreciation." We landed on
the following numbers for three years worth of depreciation using the source of
AAA's depreciation metrics, Vincentric .
Hyundai Kona : $9,795
Hyundai Kona
Electric : $15,305
Ford F-150 : $13,981
Ford F-150
Lightning : $15,738
Three-Year
Ownership Cost Comparison
After three years the
grand totals give some insight into the question, “Are EVs cheaper?” Based on
fuel, maintenance costs, and depreciation over a three-year period here's what
we've found for the cost-of-ownership of our subject vehicles:
Hyundai Kona : $19,385
Hyundai Kona
Electric : $21,426
Ford F-150 : $26,505
Ford F-150
Lightning : $23,840
EV Tax Credits
There are still
additional variables, such as a $7,500 tax credit on the table for both of the electric cars if
you buy them new. Whether they're eligible is a bit complicated. The Inflation
Reduction Act signed into law on August 16, 2022, creates new rules for EVs purchased after that date. Firstly, the 200,000
manufacturer unit cap will be lifted by the end of the year, meaning brands
that have sold a lot of EVs will once again be eligible for the credit.
However, there are
also a few new criteria. First, the vehicle must have its final assembly in the
US. The Lightning is manufactured in the US, and Hyundai has plans to start
manufacturing EVs in the US as well. In addition, to qualify for the credit, the
buyer must have an income below $150,000 or $300,000 filing jointly, and the
price of the EV cannot exceed $55,000 for cars or $80,000 for SUVs and trucks.
While we can't say whether your income qualifies, we can say that the MSRP of
the electric vehicles we've looked at are both under the cap, though in the
case of the Lightning, certain trims and options can lift the truck above it .
Still, the Inflation
Reduction Act also stipulates that, in order to receive one-half of the credit,
a certain percentage of battery materials must be sourced from the US or
countries with which the US has free-trade agreements. To receive the other
half, the battery must then be manufactured stateside. Using any battery
materials sourced from a “foreign entity of concern” makes a vehicle ineligible
for the credit.
All of that is
complicated, and with different rules being phased in at different times,
receiving an EV tax credit if you buy a car in the next year will only get more
complicated. However, many manufacturers, including Hyundai and Ford, have
plans to source and manufacture EV batteries in the US in the near future, so
for the sake of this math, let's assume your particular car was sourced
domestically.
Here, we're awarding
both vehicles the full $7,500 new-car credit to calculate the new three-year
cost of ownership, but we cannot guarantee that that will actually be the case.
For more information, you can check the IRS's page about the credit and use the NHTSA's VIN Decoder to see where a particular vehicle was manufactured.
Hyundai Kona
Electric : $13,926
Ford F-150
Lightning : $16,340
Which Is Cheaper to
Own?
So, by our
calculations this makes the electric F-150 $2664 cheaper to own and operate
over the first three years than its gas counterpart—and that's without the tax
credit. With it, it's a substantial $10,164 less. The Kona Electric, on the
other hand, is more costly than the gas version at $2041 without the tax
credit, but $5459 cheaper with it. There can also be state and local incentives
for EVs to factor in if those are available. Plus, as the years progress the
lower costs of operating an electric vehicle (fuel and maintenance) continue to
accrue.
The current hitch is
that not all new EVs are eligible for the $7500 incentive. As it stands,
despite manufacturers' plans to manufacture EV batteries in the US, the vast
majority of batteries out there do not meet all the requirements listed in the
Inflation Reduction Act. In fact, many vehicles will not be eligible at all,
because their battery includes materials from China, which controls 76 percent
of global lithium-ion battery production capacity as of 2020 and is likely
considered one of the bill’s “foreign entities of concern.”
The other complicating
issue is that comparing EVs and gas vehicles isn't a straight comparison for
most electric cars on the road. There are no Tesla Model 3s or Ford Mustang Mach-Es that run on gas. Buyers have to pit them
against approximately similar gas vehicles. When you do that, the calculations
to see which gives you the best bang for your buck can be even more
headache-inducing than what we've attempted here. But there's a better way.
Do Your Own
Comparison
If you're interested
in figuring out the cost difference between an EV and a gas vehicle, there's a
handy tool on the US Department of Energy's site that compares the overall cost of multiple vehicles
at once based on
your annual driving habits, EPA data, and even loan information. It also takes
into account your state so that it can adjust the fuel-cost data to fit the gas
and electricity prices of your area.
So is owning an EV
cheaper in the long run? All signs point to possible. Maybe. Sometimes. But as
we said, at this point in time, it's complicated.
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