The Economics of the Total cost of ownership of Electric Cars

The economics of electric driving are not apparent until you dig into the numbers, then you find out why electric drivers are so happy.  While gasoline prices fluctuate with the OPEC market place; electricity is a regulated commodity.  With ‘normal’ Leaf driving (not heavy footed :-)), you can expect to get about 4.1 miles to the kilowatt.  Palo Alto Utilities, where I live, has a three tiered rate which at the top end costs 18 cents per kilowatt.

I researched my other car experiences and looked at purchase price, service cost over the vehicle’s life, today’s gas prices, and MPG of both cars.  In a total apples to oranges comparison I then compared the total cost per mile of the two cars I own with the Nissan Leaf I leased for 39 months.  Want a surprise?  It’s cheaper to drive the leased Leaf per mile than it is to drive either one of the Internal Combustion Engine (ICE) cars.  The nine year old Acura MDX costs 72.5 cents a mile, considering purchase price, service costs and today’s gas price.  The eight year old Toyota Prius costs me just over 50 cents a mile.  Finally, for a 39 month lease of the Leaf with a reasonable estimate of service costs (I factored in new tires), deposit, electricity costs (with a 20% uplift for electricity loss in charging the battery), and lease payments, the total cost per mile is 48.3 cents per mile!  If I bought it outright, and held it for 10 years, and drove it the same number of miles as my Acura or Prius, the cost per mile would drop to 39.0 cents per mile with 75% of the cost sunk into the purchase price.

If I were to augment my electricity supply by leasing solar panels from Solar City to offset my car’s usage, I could drop the cost of electricity to a fixed annual cost of 9 cents per kilowatt for 10 years, which would reduce my 39 month cost to 45.6 cents per mile and, if I purchased the Leaf and held it for 10 years, my cost per mile would drop to 36.3 cents per mile.

As I’ve said before, you need to think differently if you’re going to own an electric car, and the first glance of the Leaf’s $38,000 sticker price can be daunting, but a careful analysis of costs makes this a very economical proposition.

 

Print Friendly, PDF & Email

Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.