Pump vs. Plug: Do You Really Save Money Driving an Electric Car?

Justin Sullivan, Getty Images
Let's face it: Whether we drive gas guzzlers or compacts, Americans hate the prices we're paying at the pump. And while we might schlep halfway across town to cut a couple of cents off our per-gallon costs, electric vehicle "plug prices" are nowhere to be found -- until now.

Earlier this month, the Department of Energy unveiled a new tool to compare "per gallon" costs of electric- and gasoline-powered cars.

With the missing link of commuter costs cleared up, let's take a closer look at the real cost of an electric car.

The eGallon Challenge

The "eGallon calculator" crunches the numbers for relative pump prices. It compares an average 28.2 MPG gasoline car to the five top-selling electric vehicles in 2012: Tesla's (TSLA) Model S, General Motors' (GM) Chevy Volt, Nissan's (NSANY) Leaf, Ford's (F) Focus, and BMW's (BAMXF) ActiveE. One eGallon is the amount of electricity required to move an an electric vehicle that same 28.2-mile distance.

If you thought gasoline was expensive before, now you're really going to cringe.

At a national level, gas-powered cars cost around three times as much per mile as electric vehicles. Gas prices currently clock in at an average $3.65 a gallon, while electric vehicles fill up for just $1.14 per eGallon.

But as important as this newest revelation is, it's only one small step along the life-cycle costs of a car.

Beyond Pump Prices

To keep comparisons comparable, let's run through the life of two pairs of competitive cars.
First, we'll keep it in the family and look at Ford's electric and gasoline versions of its Focus. And next, we'll lean luxuriously and compare Tesla's Model S Premium to Mercedes-Benz's S Class sedan, the car Tesla compares with for its buyback value plan.
Ford Focus ST Ford Focus Electric
Sale price $24,495 $39,995
Battery replacement N/A $13,500
Major engine repair
(1/5 original sale price)
$4,899 N/A
8-year fuel costs
(15,000 miles/year)
$16,222 $5,067
Total costs $45,616 $58,562
Source: Ford.com.

So, overall costs don't quite look so promising for the electric. While gas costs vastly outweigh eGallon expenditures, Ford's eFocus starting price already puts it at a $15,500 disadvantage. And when you add in the fact that a battery replacement costs around three times that of a major engine repair, electric owners are still out around $13,000 after eight years of fuel-efficient savings.

With Ford's electric value add in limbo, let's see how our luxury lineup looks.
Mercedes S Class Tesla Model S
Sale price $92,350 $87,400
Battery replacement N/A $12,000
Major engine repair
(1/5 original sale price)
$18,470 N/A
8-year fuel costs
(15,000 miles/year)
$16,846 $5,262
Total costs $127,666 $104,662
Source: Mercedes Benz, Tesla Motors, U.S. News.

Here, the automotive tables have turned. The vehicles have similar starting price tags, with the classy Tesla actually running $5,000 less. The Tesla's battery pack replacement clocks in around $6,500 lower than a major engine repair for the Mercedes, and its fuel efficiency tacks on another $11,500 in savings. At the end of eight years, Tesla owners will be driving around with about $23,000 more in their change dish than the Mercedes purchasers. And that doesn't even count the free electricity those Tesla owners can get. The automaker announced late last month a plan to triple the size of its network of Superchargers, the stations that allow Model S owners to recharge relatively quickly. And price of those charges? Free for the life of your Tesla.

The Knowns and Unknowns

There are three main lessons from our lifetime calculations:
  • HIgh sales prices can put electric cars at a spending disadvantage they'll never recover from. Ford's Focus Electric simply can't make up the ground on its cheaper gas-fueled twin.
  • Maintenance costs matter. Whether it's a battery replacement or major engine repair, knowing what a big repair will run you is essential to understanding overall costs.
  • Fuel costs add up. Penny-pinching at the pumps might sound silly, but our eight-year projections show that eGallons make more sense the longer you drive.
While the eGallon provides consumers with an unprecedented ease of comparison, there's a lot that's still unknown.

Because of their relatively recent entry into mainstream markets, long-term maintenance costs for electric vehicles remain a mystery. Even battery lifetimes are a subject of debate, and improving technology is constantly adding to performance and efficiency.

And at the end of the day, eGallon prices don't mean a thing without gallon prices for perspective. If gas prices drop dramatically, electric vehicles lose their mojo. Or alternatively, if electricity prices head higher, Tesla sales might likewise slow down. In Hawaii, where high electricity prices currently mean that an eGallon beats out gas by a mere 5 cents a gallon, eight years of driving equates to just $222 or $231 in fuel savings for eFocus and Tesla drivers, respectively.

Count your Blessings

Despite the unknowns, the eGallon calculator provides consumers with an unprecedented tool to compare car costs. The more data we have, the easier it is for analysts, investors, and average Americans to make informed decisions about their next vehicle purchase -- or auto industry stock pick.

Tesla's plan to disrupt the global auto business has yielded spectacular results. But giant competitors are already moving to disrupt Tesla. Will the company be able to fend them off? The Motley Fool answers this question and more in our most in-depth Tesla research available.

Motley Fool contributor Justin Loiseau owns shares of Tesla Motors and lives in New Zealand, where gas is $7.50 per gallon. The Motley Fool recommends Ford, General Motors, and Tesla Motors. The Motley Fool owns shares of Ford and Tesla Motors.

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