EVs are Inflation Relief
August 9th, 2022 | by Cameron Wolf
It's no secret that the US is experiencing massive inflation and high gas prices. Money printing into circulation continues to be growing at a tremendous rate, and interest rates are beginning to shift. This is leading to a perfect storm of inflationary pressure for the American consumer, and this is being felt in daily expenditures such as groceries, goods, and other essentials. Inflation is also translating into higher prices for investments, commodities, and particularly transportation. Airlines, public transit, and regular commuters are feeling the strain of rising fuel costs, which have increased dramatically since August 2021. The cost of living is rising faster than wages, and people are struggling to keep up. Many are turning to alternative transportation methods, such as biking and walking, in order to save money.
What can the American consumer do to mitigate the short-term effects of inflation?
EVs may be the answer.
Electric vehicles are becoming increasingly popular as gas prices continue to rise. In fact, EV sales have doubled in the past year, which, correlational or not, average fuel prices have jumped from an average of $2.94/gallon in April 2021 to $4.21/gallon in April 2022, or 43%.
Currently, the U.S. Energy Information Administration shows the average retail price per kilowatt hour at $0.107 in April 2021 to $0.1174 in April 2022, a mere 9.7% increase.
As a result, studies continue to show that electric vehicle drivers are experiencing less transportation-related financial strain than drivers of traditional internal combustion engine cars. A Consumer Reports study similarly showed that EV Owners spent around 60 percent less on fuel each year than gas vehicle owners.
Cost of ownership scenarios are accessible in real time on a number of internet sites to illustrate the cost of driving a car for its entire life cycle. El Paso Electric's website, for example, offers a popular EV cost of ownership calculator. The tool, built by ZappyRide, shows the total cost of ownership via incentive information, fueling costs, maintenance costs, and a plethora of other EV information.
ZappyRide has been building these types of calculators for nearly 5 years and is quickly becoming the authority of EV Data providers. ZappyRide builds white-label websites and tools for Auto OEMs, utilities, fleets, and other Greentech stakeholders to promote their thought leadership in the electrification of consumer and fleet vehicles.
Let's build a scenario
Let's say you want to purchase a 2023 Chevy Bolt in Texas:
Criteria for scenario:
20k miles/year <> 1,666 miles/month <> ~55 miles daily
5 years of ownership
Avg gal of fuel cost in TX at time of writing: $3.58
Comparison vehicle - Volkswagen GTI S based on its proximity to the Chevrolet Bolt EV based on brand, size, and price.
—
MSRP is $25,600 (before incentives and resale value).
The cost of gas over the first 5 years of the car @ $3.58/gal would be $12,785.
$246 to fill up monthly
The cost of electricity @ $0.1374/kWh is $3,846 (courtesy of El Paso Electric).
$64 to ‘fill up’ monthly
Removing gasoline expenses is an excellent method to recover lost spending power during a recession, and driving an electric car for five years will save you $8,939 on fuel expenditures.
In addition, electric cars have far lower maintenance costs and incentive programs via tax credits, meaning that they are even cheaper to own in the long run.
This is because electric vehicles have far lower maintenance costs than ICE cars. There’s no oil to change, no filters to replace, and no spark plugs or wires to worry about.
When comparing a Bolt EV to a Volkswagen GTI over 5 years, the cost breakdown is staggering:
Of course, there are various factors that will affect how much an individual saves, but on the whole, electric vehicles are cheaper to operate and maintain than ICE cars.
To get a different geographical analysis, various utility companies are creating similar platforms to the above Texas-based one.
To see differentiation, here is a list of links for different areas of the U.S:
Austin Energy (Austin, TX) - https://ev.austinenergy.com/
DTE Energy (Detroit, MI) - https://ev.dteenergy.com/vehicles/
Duquesne Light Co. (Pittsburgh, PA) - https://ev.duquesnelight.com/
Puget Sound Energy (Seattle, WA) - https://ev.pse.com/
Xcel Energy (Minnesota, Michigan, Wisconsin, North Dakota, South Dakota, Colorado, Texas, and New Mexico) - https://ev.xcelenergy.com/
Tennessee Valley Authority (Knoxville, TN) - https://ev.energyright.com/
Pacific Gas & Electric (San Francisco, CA) https://ev.pge.com/
Southern California Edison (Fullerton, CA)- https://cars.sce.com/
Anaheim Public Utilities (Anaheim, CA) - https://ev.anaheim.net/
Burbank Water and Power (Burbank, CA) - https://ev.burbankwaterandpower.com/
City of Colton (Colton, CA) - https://ev.coltononline.com/
Imperial Irrigation District (Imperial, CA) - https://evolve.iid.com/
Silicon Valley Clean Energy (Sunnyvale, CA) - https://ev.svcleanenergy.org/
Turlock Irrigation District (Turlock, CA) - https://ev.tid.org/
Based on the study above, it’s fair to assume that saving $182 a month at the pump will ease the inflationary pressure the American consumer is experiencing. If you’re still not convinced about the cost savings, take a look at some of the amazing new models coming out in 2023 – you may surprise yourself with how much they have to offer. MSRP continues to lower on some electric vehicles meaning cost parity is coming sooner than most believe.