EV Fueling Cost Comparison Study: Comment Responses, Clarifications, and FAQs
Since the release of the first edition on October 27, we have noted several hundred questions and comments regarding the study Comparison: Real World Cost of Fueling EVs and ICE Vehicles. Below, we respond to those we have seen most frequently. Note that the second edition addresses many of these questions in further detail, as well.
- Why didn’t you include oil changes, software updates, maintenance costs, battery replacement, insurance costs, etc.?
Our October 2021 report, as the title says, is about the cost of fueling EVs and ICE vehicles. We did not include maintenance costs for either EVs or ICE vehicles. Similarly, we did not include depreciation, insurance costs, or other expenses not related to energy. Later studies may cover some or all of these items.
Most analyses suggest that the maintenance costs are likely to be less for EVs than for ICE vehicles (but not zero).
- Do the calculations take into account the states/utilities/car companies that offer rebates/subsidies/bundled pricing?
We acknowledge in our report that states and utilities offer, in some places and under some conditions, rebates and subsidies. We also state explicitly that most auto manufacturers “bundle” a minimal set of equipment with the vehicle, and offer extra charging equipment at additional cost. Of course, the costs of any equipment purchased with a car (be it ICE or EV) is ultimately paid by the consumer one way or another regardless of rebates, subsidies, or bundling. Thus, properly comparing the cost of fueling requires us to include any equipment purchased specifically for that purpose. As noted in #9 below, corresponding ICE vehicle costs are passed along to the consumer as a component of the retail gas price.
As noted in our report (p. 22) we identify vehicles by segments, defined largely by purchase price, to illustrate a range of possible scenarios. We use the same analysis and data sources as those used for our firm’s Automotive Dashboard.
For the purposes of this fueling cost study, the amount of fuel purchased (electricity or gasoline/diesel) and related costs (road tax, deadhead miles, charging efficiency losses) are the salient data points. While the price of the car is important in estimating total cost of ownership, we do not attempt to study that in this report (see question 1).
With that caution in mind, let’s talk about the Tesla Model Y and some comparison vehicles.
Unfortunately, there are not yet any true entry-level EVs sold in the United States. The lowest price EVs currently sold in the US cost much more than an entry-level ICE vehicle. To illustrate, a Chevy Equinox has a starting MSRP below $25,000, while a Tesla Model Y has a Model Year (MY) 2021 “Long range” version with a starting MSRP of $61,190, and a “performance” version with a starting MSRP of $63,190. Many families would consider this a “luxury” vehicle based on price alone: A Cadillac XT6 MY 2022 “premium luxury” model has a starting MSRP of $56,190. Additional options could easily bring the Tesla’s price to $70K, in which case it would certainly qualify as a luxury vehicle.
In circumstances where an organization commissioned our work, we state that explicitly. In this case, the work was done independently. This study is the result of over 6 months of independent work by consultants at Anderson Economic Group. The company has over two decades of work for clients that include auto manufacturers, trade associations, auto dealers, labor unions, state governments, municipalities, colleges, and nonprofit organizations, including organizations that promote conservation and energy efficiency. No outside group provided support for this analysis, financial or otherwise.
- Some critics say the authors have an agenda to make EVs look bad. Is this true?
No. The authors, and Anderson Economic Group, completed the analysis from a viewpoint broadly favorable to EVs overall. However, we believe the results of our study clearly show that more work must be done to build out infrastructure and reduce costs for the average consumer. We have not yet reached the point where EVs are a more affordable, more practical option for a majority of American drivers. Until we ease some of these additional cost burdens and logistical issues, the transition will not be as successful as we hope and EV ownership will remain limited to those who can afford the trade-offs.
The “90 hour” photograph shown in the Free Press article is a true and accurate record of an actual home charging session, as stated in the photo caption. Although not stated in the article, Ford Motor Company lists 95 hours of charging with a home charger as an estimate of the time required to fully charge a vehicle using a standard household outlet.
That said, we present multiple charging scenarios to illustrate the range of possibilities, but none of these assumes people will need to regularly charge their vehicle for 90 hours. This situation would only apply when an EV had very little charge left and the driver wanted to charge it back to 100% using a standard home wall socket.
There is an important distinction to consider here: Even drivers who charge at home 90% of the time are not likely to get 90% of their power from residential chargers.
To achieve an accurate cost comparison, we have to measure the amount of power purchased (and the equipment, taxes, and mileage associated with it), not the frequency of use. For example, a driver may charge nine times at a home charger, adding a total of 72 kW to their battery (at 8 kW added per session that could take about 10 hours on a home charger). The same driver may then make one longer trip, stopping at a commercial charger to add 70 kW. In this scenario, the driver charges at home 90% of the time but utilizes only about 50% residential charging power.
Several readers weighed in to say they use their EV exclusively for short local trips. This segment of the population may be able to use a residential charger for an entire month, thus paying 100% residential utility rates. Note that many families in this position also report owning an ICE vehicle, which they use for taking longer trips. This is a scenario that cannot exist in an all-EV environment.
- Many ICE vehicles get better mileage than that cited in the study. Does that make your results wrong?
Just like the range of situations for EV drivers, ICE vehicle drivers also have a range of outcomes. We considered a range of these in our study and based our findings on typical results, but obviously we cannot account for every conceivable scenario. One such situation would certainly involve lower costs than we displayed for the ICE scenarios in our Oct 2021 report. Other scenarios would produce higher costs. As noted by several readers, our gas price assumption was based upon the pre-pandemic average cost in Michigan (our home state). In many locations, that cost is extremely low.
Indeed, we have amortized the cost of an L1 or L2 charger for each scenario for an EV owner. We vary the assumed usage of home and commercial chargers in each scenario to represent a range of possible usage situations. As stated in the study, the cost of the gas pump and other infrastructure is passed along to the consumer in the retail price of gas, so an equivalent comparison requires the inclusion of the charger equipment. While that equipment is priced into commercial charging rates, it is not included in residential utility charges and must be added separately.
Yes, ICE drivers must drive to a gas station just as EV drivers must drive to a commercial EV charging station. Because of this, we include “deadhead” miles for both EV and ICE drivers, with the number of miles for EV drivers dependent on each scenario’s portion of commercial rather than residential charger usage.
As stated in the text, we make use of data on the number of gasoline stations and the number of fast DC charging stations, as of mid-2021, to provide indicative distances for residents in metropolitan areas of the US. For now, there is a very big variation in convenience for EV chargers and gasoline stations across the United States. For some drivers, especially those in rural areas, getting to either a charger or a gas station may take even more time and more miles than the scenarios we describe in the October 2021 report.
As stated in our report, we include the actual cost of charging equipment and charging services because the consumer pays for these costs. Whether charging services are bundled into the price of the car or passed along via utility charges, the consumer ultimately pays for them. Just like “free parking” at a store, “free popcorn” at a movie theater, or “free coffee” from an employer, the cost may be hidden to some extent by the entity subsidizing it, but that entity is not going to fully bear the burden for that cost. Retailers may charge more for products, theaters may increase ticket prices, employers may pay less in wages, but the cost is passed on to the consumer in the end.
As EVs become more mainstream, it will be harder to hide the implicit pricing of the charging equipment and cost of charging but we are not there yet and transparency is lacking. However, just because we cannot easily see the cost does not mean it isn’t there.
Plug-in EVs typically take a J1772 plug, which is not the same as a 110 VAC 15 amp 2-pin (or 3-pin) circuit. Thus, EV drivers need some additional equipment that is typically called a “charger.”
- Ford sells a $799 “connected charge station:” https://www.ford.com/buy-site-wide-content/overlays/mach-e-overlays/ford-connected-charge-station/
- Tesla’s least expensive charger is listed at $500: https://shop.tesla.com/product/wall-connector—24-ft?tesref=true
- Further, as stated on both sites and noted in our report, the cost of the charger doesn’t include the cost of an electrician to install it.
When you paid for the car, you paid for all of the equipment that came with it. You paid for the windshield wipers, and you paid for the brakes. You paid for the climate control, the steering wheel, and the headlights. You paid for the sound system, navigation features, heated seats, and other options. You also paid for that “free” charger.
- Charging is not that expensive, is it? There is a commercial charger near me that advertises just $0.10.
Commercial chargers price their power in a variety of ways, as noted in our report. Some readers have confused price per minute with price per kilowatt. In the $0.10 scenario posed by this critic, the charge was for 10 cents a minute the first hour, then 20 cents per minute after that. At 20 cents per minute, the driver pays $12 per hour. A driver who gets only 12 kW in that hour pays $1 a kilowatt, one who gets 24 kW pays 50 cents per kilowatt, and one who gets 36 kW pays 30 cents per kW.
The charger doesn’t (and cannot) guarantee a price based upon kW, as the EV itself may throttle the charging rate. Many EV drivers report having observed throttles taking place on public forums, citing maximum (not average) charging rates ranging from 26kW to 56kW to 125kW for the same commercial charger.