What Does It Really Cost Per Gallon to Drive an Electric Car? 75 Cents
If you’re still in the camp that finds electric vehicles ugly, weak, or otherwise unappealing, a new study into the true costs of operating an EV might change your mind. A new study has been released taking a look at the actual operation costs of an electric vehicle, in terms of what the electricity costs ‘per gallon’ so to speak, as opposed to a traditional gallon of unleaded gasoline. The results are fairly eyebrow-raising, as it was found that electricity costs a mere 75 cents ‘per gallon,’ whereas gasoline can cost up to and well over $4 per gallon, depending on location.
According to Charged, an industry magazine and website, the study was put together by the Northeast Group, the price ‘per gallon’ is structured in such a way across fourteen states and twenty-five local utilities, making it easier for drivers to understand exactly how much they are spending on their vehicle’s fuel. “In the currently shifting landscape, utilities are finding it increasingly important to better engage with their customers. A key part of this is new customer offerings such as electric vehicle tariffs,” said Ben Gardner, President of Northeast Group to Charged. “EV owners tend to be more engaged customers and it is critical that utilities are providing them with new rate options for their EVs.”
That price, 75 cents, has got to be hard to ignore from a consumer perspective. Really, what was the last time anyone saw gas prices that low? The ’70s?
If drivers have the opportunity to lower their fuel consumption costs by nearly 80 percent, as the average price of gas is roughly around $3.70 per gallon, they’re going to start paying attention.
And the momentum doesn’t just end at the ‘pump’. Some states, like Minnesota, have started implementing plans to offer electric vehicle owners better off-peak electric rates for charging their cars at home. The law is set to take effect next year, and many other states are looking to follow suit.
It’s been a big year so far for the electric vehicle market, as Tesla (NASDAQ:TSLA) continues to assault the luxury car market, and release all of their patents as well. In addition to that snippet of big news, another attention-grabbing headline has been the news that electric vehicle sales have doubled every year for the past three years, as reported by Transport Evolved. If these trends continue, it’s expected that more than one million plug-in EVs will be on the road by 2016.
The graph above, which demonstrates the data collected by the Centre for Solar Energy and Hydrogen Research Baden-Württemberg, shows the exploding popularity of plug-in vehicles, particularly over the last three or four years. Prior to 2010, sales were extremely sluggish. But beginning at the end of 2011, the American market really took off, and now almost every major car maker has an EV available on the market.
Cars like the Nissan Leaf, the Chevy Volt, and the Toyota Prius Plug-in are some of the leaders of the EV evolution, and have quickly become customer favorites to jump-start the segment within the industry as a whole. Also, as more and more electric vehicles are sold and adopted by the public, the cheaper they become as the cost of production drops as well.
The exact numbers, going off of June’s sales numbers from The Washington Post, show the Leaf gaining lots of ground, with sales up 5.5 percent from the previous year. Chevy’s Spark EV also saw an increase in sales from the year before, albeit in smaller numbers.
There should be a jump in interest among all auto makers, and new startup car makers as well, thanks to Tesla’s patents being released. The Supercharger Network, built up by Elon Musk and company to charge Tesla’s luxury sports cars, should also see some added investment, and become available to those who adopt Tesla’s battery technology.
All in all, it’s a very good time for electric vehicles, and an excellent time for investors to take a good look at the industry. Production costs are on the way down, and fuel costs at 75 cents per gallon, there is really no reason to think the electric vehicle hype will die down among consumers any time soon.