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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Davey Brown

@Jill James
Electric drivetrains have a less than a 10th of the parts of an internal combustion engine. And none of the moving parts come in contact with each other other than bearings. Also parts don't change directions defeating their own momentum. Furthermore, internal combustion engines have to operate at sometimes more than 10 times the outside air pressure; an electric motor does not at all.
I have a 43-year-old Oscar blender. It has never been serviced. Want to bet that when I plug it in the blade turns?

July 15 2015 at 7:01 PM Report abuse rate up rate down Reply
Jill James

People on this threat seem to think that electric cars will have significantly longer lifespans than gasoline powered ones. This is wrong-heading thinking for two reasons:

1. The capitalist product cycle requirement does not change just because you change the fuel type. Car designs, options and technologies will change just as rapidly; therefore rendering electric cars obsolete either from an engineered obsolescence point of view, or from a perceived obsolescence point of view. Either way, electric car owners face the same 'need' to replace the entire car, not just the battery. That's how capitalism reproduces demand. Without demand the system collapses.

2. Electric cars are not somehow futuristic vehicles and thus more durable. Electric cars will rust and suffer various mechanical failures just like gasoline powered cars. Additionally, I would assume that electric cars will go through brake components about twice as often as gas powered ones, because of the huge weight issue. Corning with the huge added weight of electric cars also means that tires will not last as long.

3. Finally, currently much electricity is generated cheaply, with fossil fuels, such as coal or natural gas. It has been well documented that if alternative methods for generating power, such as solar and wind begin to assume larger proportions of grid capacity, electricity will get more expensive. It currently take about 20 years for a 2 MW wind turbine to pay for itself. Even then, it needs fossil fuel powered generation to fill in when the winds die. Solar farm installations are even more expensive.

June 21 2015 at 2:07 PM Report abuse rate up rate down Reply
Jill James

This analysis has several huge flaws:

1. Much of the electricity in the US is generated from fossil fuels, and 'coal' in particular, which is several times more polluting the gasoline. Therefore, any 'green' argument for electric cars is removed.

2. Range is a big issue. Electric cars with even the most advanced batteries have very limited ranges (200-300 miles at most) and less if the driver likes spirited driving.

3. Fueling is slow and access is often unavailable.

4. The health effects of sitting inside a LARGE electric/magnetic field for hours and hours is still largely unknown. However, the mutative effects of electric fields on animal biology is well known. Judging from the warnings about spending long periods of time with a cell phone next to your head, I would assume that sitting on a huge battery is not very healthy. This is not even considering the hydrogen gas seepage from batteries.

June 21 2015 at 1:54 PM Report abuse rate up rate down Reply
Cherry Chen

Insurance is a huge expense for electric cars that you seemed to have left out. The good thing is that EV's cost less to insure (if you factor in green driving discounts) than normal, gas guzzling cars. I pay around $30/month to insure my Prius from Insurance Panda. I also spend less than $20 per month on gas for it (and I drive every day).
The initial cost of the vehicle was expensive (but so is a Benz, BMW, Lexus, etc.), but overtime, I'm spending much much less on my Prius than I did with any car I've ever owned before (maintenance, insurance, gas, etc.). Overall, its definitely well worth it.

March 12 2014 at 2:25 PM Report abuse rate up rate down Reply

I am trying to figure out the fuel cost per 8 years calculation, so I can look at it from my state, but cannot get your numbers. Presumably, for the gas only calculation it would be
8 yr * 15000mi/yr * 3.65 $/g * 1/28.2 g/mi which comes out to $15,531.91, not $16,222.
and the electric would be
8 yr * 15000mi/yr * 1.14 $/g * 1/28.2 g/mi which is $4851.06, not $5262
I am either missing something, or you did not use the same values in your text as in the table. Can you straighten me out?

February 20 2014 at 3:52 PM Report abuse rate up rate down Reply

So for myself.

Gas version is $49,121
Electric is $37,562
Looks like the electric wins

January 26 2014 at 11:06 AM Report abuse rate up rate down Reply

I own a FF electric. I also did cost calculation and return on investment. Lets see what the REAL cost is.
The FFE cost is actually $ 35,995 ( ford dropped the price 4000 in July for 2013 and 2014 models). If you are going to compare the same options then the price given for the gas powered Focus is inaccurate. It does not include the navigation, HD stereo, and more. If these are added( I did this on Fords website) then price is $ 28,000. So far my calculations show a $7,500 difference, but it grows from here. Now lets include the $7,500 Federal tax credit that you will get if your tax liability is this high. Most taxpayers will get the entire amount. Why this is not included or even mention reveals the writers agenda. But wait it gets better. Many states have their own tax credit. California I believe has a $ 2500 and my state of Colorado up to a $6000 tax credit. As far as including a cost of the battery replacement, this is laughable. This was clearly added to offset the maintenance and fuel cost of the gas version. The battery has a 8 year warranty. The capacity of the battery is warrantied to have 80% of its original capacity up to 8 years. I easily get 74 miles on a charge. Most of the studies show likely a 90% capacity remaining at 8 years, obviously why ford has 80% as their cutoff. So 90% would be 66.6 miles and 80% would be 59.2 miles. for myself this is not issue as my round trip is 48 miles and I can charge at work if I wish. As well the cost given is the CURRENT price and not what it will cost in 8 years. All the studies show that cost will drop 25 to 50% by then. Here are my calculations:
Sale price $35,995
Battery replacement. $10,000
Fuel cost. $ 5,067
Total cost. $51,062
Minus tax credits of 7,500
Real cost. $43,562
For myself this drops to $37,562 if I include my colorado state tax credit. Electric wins easily

January 26 2014 at 11:00 AM Report abuse rate up rate down Reply
Chuck Andrews

Hmm... Very interesting article. Here at Andrews Inc. we are pro electric cars. Yes, electric cars have some cons but the pros are amazing. For those of you who may be interested... Patrick Key is correct, there are many other variables which need to be considered when comparing an electric car vs. a gas car.

We have developed an online calculator which can help assist in determining the real value of an electric car or a gas car.


October 15 2013 at 11:02 AM Report abuse rate up rate down Reply
Patrick Kee

You need to correct your analysis as there are some serious errors:
* Most people own cars for 10+ years. If you even have to replace the battery at all then you can amortize the cost over at least 2-3 more years which will significantly reduce the cost differential presented.
* You have no idea what a battery will cost 6 years from now. If look at recent history it's very reasonable to expect significant cost reductions.
* In addition to reducing battery manufacturing costs, electric car batteries are extremely useful after they are not good for cars anymore. We already see that nissan is using the "used" batteries as energy storage that saves them millions per year as energy buffering systems. California is just now starting battery system support for solar battery systems. These trends will dramatically reduce the cost of replacement, if replacement is even required.
* You left out gasmobile maintenance costs like oil changes. Over the course of 10 years (150k mi). That's $1200 if you change your oil every 5k miles, or $2000 if you change oil ever 3k miles.
* Electric cars are simpler, there are fewer things that can break because there are fewer moving parts.
* Electric cars are awesome and people love them and are willing to pay more for them. They have tons of storage space, they are the quietest, smoothest ride you can find, they have amazing torque and are fun to drive, and they are great for the environment and energy independence.

September 06 2013 at 8:34 AM Report abuse +1 rate up rate down Reply
Hetal Shah

after 8 years ford focus st will have kbb value of $3500 where as electric car will have $20,000 because battery is replaced

August 18 2013 at 11:41 PM Report abuse rate up rate down Reply