Will an electric vehicle REALLY help you combat high gas prices?

Gas prices are high and have been high for a long time. The national average cost of a gallon of gas was over $4.30 in early 2020.

Let’s examine the possible savings and other benefits from driving an EV over standard gas-powered cars. Key takeaways:

  • Electric cars require less electricity to run than the equivalent amount of gas would in all 50 states.
  • Electric cars can save people $1,000 to $2,000 on annual fuel costs. More efficient electric cars can still save people $1,000 or more over comparable cars.
  • Unfortunately, most electric vehicles cost more than gas cars. This might mean that the net savings from switching to an electric vehicle are reduced or eliminated.
  • There are many ways to combat climate change, but some are more effective than others. Conserving energy is still one of the best ways to make a difference, through things like carpooling, taking public transportation, and riding a bike or e-bike for short trips.

The cost of gas in 2022

Gas prices are high and have been high for a long time. The national average cost of a gallon of gas was over $4.30 in early 2020. This is because the war in Ukraine caused instability, which raised gas prices.

The graph shows that gas prices decreased during the early part of the pandemic, but then increased again as people returned to more normal activity levels and became vaccinated against Covid. Gas prices remained between $3.00 and $3.50 from Summer 2021 to mid-February of 2022.

The average cost to drive a Ford F-150 for 15,000 miles in a year is $1,950. The F-150 gets 25 miles per gallon, meaning 600 gallons in a year. A single fill of its 26-gallon tank would cost $84.50. At the current price of $4.32/gallon shown in the chart above, that fillup now costs $112.32, and it would cost nearly $2,600 to buy all the gas needed in a year. Prices are high right now and hopefully they won't stay this way for very long.

Gas cost for fuel-efficient vehicles

Even though the F-150 is the most popular car in the USA, it only accounts for 3.25% of sales. A lot of people choose more fuel efficient cars, like the Honda Civic and Toyota Camry. These cars together account for about 4% of sales. So let's look at how much gas costs for people who drive these cars.

The Honda Civic 5Dr (AV-S7) and the Toyota Camry LE/SE have a fuel efficiency of 32 mpg. This means that they can travel 28% more miles for every gallon of gas than the Ford F-150. If gas were to stay at $3.25/gallon, it would cost about $1,525 per year to drive these cars. If gas prices were to go up to $4.32/gallon, it would cost $2,026 per year to drive these cars. This is still quite expensive, but it is cheaper than driving the Ford F-150.

The hidden costs of gas cars

Besides the cost of gasoline, cars also have a lot of parts that need to be lubricated. This usually needs to be done every 3-4 months and costs around $75 each time. However, people who do it themselves can save some money.

The social cost of carbon is the cost to the environment and the economy of adding another ton of carbon pollution to the atmosphere. It is a present value dollar amount based on a discounted analysis of all future costs associated with the pollution.

Some internal combustion vehicle owners might not want to hear it, but experts agree that the social cost of carbon is equal to about $50 per ton of CO2, when factoring in things like how it affects the world economy.

The Ford F-150 produces 5.33 tons of CO2 per year, costing the world $267. The Camry and Civic drivers of the world each produce 4.17 tons of CO2, costing $209. The owners of these cars will only end up paying a small amount of the cost their pollution causes, but the costs will be paid all the same, over time.

The cost of electricity

Electricity prices vary a lot depending on what state you are in. Some states, like Louisiana and Mississippi, have cheaper electricity prices. Other states, like California and New England, have more expensive electricity prices. Electricity is also bad for the environment because it creates pollution.

Electricity can be made cleaner than gasoline. Every state has its own fuel mix for its electricity sources, but no matter the mix, pumping, refining, transporting, and burning gasoline is more polluting than emissions from the electricity necessary to do the same amount of work. Electricity prices are relatively fixed (unless you are a subscriber of a bad rate plan in Texas during a grid emergency), and they take many months of planning and deliberation to change.

Finally, one of the greatest practical benefits of living in a city or suburb is that there is likely a reliable, effectively endless source of electricity within a few feet of you at any given time.

The cost of charging an EV

Charging your electric car at home is one of the advantages it has over other cars. Another advantage is that an electric car can travel just as far for much less money. For example, let's look at California.

California has some of the most expensive electricity in the country. At $.24 per kWh, it would take $31.44 to charge (or "fill") the 131 kWh battery of the long-range Ford F-150 Lightning EV. Ford says you can travel 300 miles on that charge, which is 2.29 miles per kWh. At that range, you'd need 6,550 kWh for 15,000 miles in a year, costing $1,572. Electricity for a year of driving in the F-150 EV is over $1,000 cheaper than gas for the regular F-150.

In a state like Florida, where the average price for electricity is around $0.12/kWh, the F-150 Lightning costs just $786 to drive 15,000 miles per year. This is nearly 2,000 cheaper than its gas-guzzling counterpart.

Electricity for efficient EVs

To compare Tesla's Model 3 to the cars we talked about before, let's look at how much it would cost to drive the Model 3. The Tesla Model 3 is a small car that is very similar in size to the Honda Civic. But it has more horsepower than either of the cars we talked about before.

The Model 3 comes standard with a 54 kWh battery that can go up to 267 miles on a single charge. That means it would cost $729 per year to charge your Tesla Model 3 at home in California, and just $364 per year to charge it in Florida.

Tesla cars are cheaper to charge than gasoline cars when you compare the prices in California and Florida. In California, the average price of gas was $4.00 to $4.50 a gallon before the war in Ukraine. But Tesla owners only have to pay about one third of that price to charge their car for a year. In Florida, where gasoline averaged $3.25 a gallon through 2021, charging your Tesla saves you $1,161 per year.

Bottom line: is an EV really a better deal?

The numbers used above show the cost of fuel for a car or truck when gas is compared to charging with electricity at home.

However, the cost of charging at off-peak rates in all states, which can be very cheap (think $0.07/kWh), or the cost of charging on the road, which can vary from quite expensive to completely free, depending on where you’re going, is not included. But the fact remains that real people have saved thousands of dollars by going electric.

There are a lot of factors to consider when talking about the value of an EV. The first and most important is the cost of the car. EVs are more expensive than cars that use fossil fuels. For example, the monthly payments on a loan for a Model 3 are nearly $3,600 more expensive per year than for a Camry. And choosing an extended-range F-150 Lightning XLT over a similarly-appointed gas version will cost you $5,700 more per year, for 6 years. These expenses more than cancel out any savings you might have in fuel costs.

There are many reasons why electric vehicles (EVs) are better than gasoline cars. They have more power and can hold more, making them perfect for long trips. You can even use them to power your home in a power outage! However, they are still expensive, and have gotten even more expensive in the past few months because of the pandemic. The good news is that they are starting to become more available now that car companies have realized how much people want them.

Gas cars cost more to fuel, but for the most part they are still cheaper than electric vehicles. EVs are easier to maintain and last longer, but they also cost more than most non-luxury vehicles. As more EVs come onto the market and prices start to moderate, it’ll be important to consider one for your next vehicle.

What else can you do?

What can people do if they can't afford the high cost of gas? Unfortunately, we're all going to have to go back to the frugal habits we learned a while ago. We'll need to carpool, take fewer trips in our cars, and use public transportation if it's available.

Finally, consider that the best electric vehicles to help you overcome high fuel prices may not have four wheels. E-bikes don't have as much towing capacity as an F-150, but most people don't need that for their commute to work.

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