The financial case for EVs — with caveats
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This map is food for thought heading into the weekend and the heart of summer driving season.
Why it matters: While EVs generally have higher sticker prices, running a car on electricity is typically cheaper — often by a lot.
- And EVs are typically less expensive to maintain.
State of play: That map is derived from an Argonne National Lab analysis that found driving a fully electric car means annual fuel savings of up to $2,200.
- It's all pretty location-specific, given regional variations in gasoline and electricity prices. And those prices fluctuate over time.
Zoom in: University of Michigan researchers recently explored lots of variables in 14 cities to see whether EVs are cheaper over the car's lifetime. Their takeaway? It depends.
- Lower-range EVs (think 200 miles) generally beat gas cars, even without incentives, while longer range (300 miles) models are roughly comparable, their peer-reviewed paper found.
Yes, but: The variance is huge!
- For a midsize electric SUV with 300 miles of range, lifetime ownership cost varies by $52,000 — around 40% — depending on where the driver lives.
- They also note that EVs will become even more competitive over time as battery costs fall.
The big picture: Benefitting from those fuel savings means clawing back the higher up front costs over time.
- The price gap has generally diminished, and should fall further as automakers plan more mass-market products.
- But for now, it's significant. The average fully electric vehicle costs over $57,000, per Kelley Blue Book data — nearly $10,000 more than the average for other vehicle types.
What we're watching: How quickly cheaper EVs arrive, and how many of them meet the criteria for $7,500 purchase subsidies under the 2022 climate law.
