What is the annual fuel savings from driving an electric car? Even at today’s depressed gas prices, fuel savings are big.

2016-nissan-leaf

Currently the price of gasoline is only $2.26 per gallon… if you live next to a gas station that sells gas at the national average. Let’s start with that.

Table References 1

As the table shows, based on today’s gas prices, we end up with a savings of $13,109 in lifetime fuel costs. That assumes you will always fill up the gas tank at the current price, but is that likely? According to McKinsey2 nearly $400 billion dollars worth of oil project development spending has been deferred since oil prices went down in mid-2014. If that creates a deficit in oil production in 2017 or 2018, all the proud new truck and SUV owners could be in for an unpleasant surprise in the form of a oil price spike.

This begs the question. What has been the recent average cost of gasoline? Over the last 10 years, 2006 to 2015, the average price of gas has been $3.17.3 At that price, using the same assumptions from the table above, you end up with savings of $22,066 over the life of the car.

A table for pessimists and optimists

All of this is great, but what happens if the price goes up… or down… or sideways? I’ve a table for that too.

For every fifty cent change in the price of gas, the money saved by driving an electric changes by $4,921. Breaking even on fuel costs means buying gasoline for just under $1.00 per gallon. That is 32% lower than gas prices have ever been when adjusting for inflation.4 At the other end of the spectrum, gas at $5.00/gallon means $40,078 in fuel saving. I think it is safe to say that if we ever see gasoline that high, car companies will not be able to make electric vehicles fast enough.

The two most popular5 electric and plug-in hybrid electric models in the U.S. are the Nissan Leaf and the Chevy Volt respectively. These are the base model prices6 for each.

  • 2016 Nissan Leaf: ~$24,000
  • 2017 Chevy Volt: ~$31,000

Even at the 10 year average gas price, both of these vehicles almost pay for themselves in fuel savings alone. When you add in the $7,500 federal tax credit for EVs, the cars are no-brainers.

Conclusion

Over the last 10 years. We have seen national average gas price go from a high of $4.117 to a low of $1.87.8 It is impossible to say what the price of gas will be next week much less 5 years from now. We do know that current gas prices are well below the 10 year average. Electricity is a completely different animal. With roof mounted solar wrapped into a home mortgage, not only can we beat the cost of utility power,9 we can lock in a fixed price of electricity for over 20 years. That allows for peace of mind by providing a low cost fuel you can depend on.

The Next Step

Want to learn how to switch to clean energy even if you live in an apartment? This article shares an ideal way for anyone to access clean energy. If you are inspired to learn about other ways you can increase your clean energy usage, check out the how-to pages: Easy, Intermediate, and Total Commitment.

At ButItJustMightWork, we strive to make your life more fun, more convenient and more affordable with clean energy.

Footnote:

Electric Vehicle Annual and Lifetime Fuel Savings
  1. Average annual miles per driver
    Department of Transportation
    https://www.fhwa.dot.gov/ohim/onh00/bar8.htm

    Average sales-weighted fuel-economy rating
    University of Michigan Transportation Research Institute
    http://www.umich.edu/~umtriswt/EDI_sales-weighted-mpg.html

    Nissan Leaf Fuel Economy
    U.S. Environmental Protection Agency
    https://www.fueleconomy.gov/feg/Find.do?action=sbs&id=37066

    Weekly retail gasoline and diesel prices
    U.S. Energy Information Administration
    https://www.eia.gov/dnav/pet/pet_pri_gnd_dcus_nus_w.htm

    National average electricity rates ($/kWh)
    U.S. Energy Information Administration
    http://www.eia.gov/electricity/monthly/epm_table_grapher.cfm?t=epmt_5_06_b

  2. Black swans and barrels: How to think about the future of oil prices
    http://www.mckinsey.com/industries/oil-and-gas/our-insights/black-swans-and-barrels-how-to-think-about-the-future-of-oil-prices
  3. Inflation adjusted gasoline prices
    http://inflationdata.com/articles/inflation-adjusted-prices/inflation-adjusted-gasoline-prices/
  4. Inflation adjusted gasoline prices
    http://inflationdata.com/articles/inflation-adjusted-prices/inflation-adjusted-gasoline-prices/
  5. Over the last two years, priced below $40,000
  6. Truecar price for Southern California
  7. AAA gas prices
    http://gasprices.aaa.com/
  8. Inflation adjusted gasoline prices
    http://inflationdata.com/articles/inflation-adjusted-prices/inflation-adjusted-gasoline-prices/
  9. Report: Solar is Cheaper that the Grid in 42 of the 50 Largest Cities
    http://www.greentechmedia.com/articles/read/report-solar-is-cheaper-than-the-grid-in-42-of-the-50-largest-us-cities

5 thoughts on “Electric Vehicle Annual and Lifetime Fuel Savings

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