Yes, driving electric really is cheaper
Breaking down the performance from a recent road trip and the savings after six months of driving an electric vehicle
A world with more electric cars on the road will have many benefits: less impact on the climate, quieter cities, better air quality, and safer roads. A growing electric fleet will bring problems too: EVs are heavier and I don’t think there is enough being said about the impact they will have on deterioration of road infrastructure. And crucially, millions of cars needing to be charged at peak times will put a lot of pressure on the electricity grid (although in a modern grid they might actually bring stability.)
In this post I leave all that aside for a moment to focus on the economics of driving an electric car. After my last post on this subject I got lots of questions about the stats from my road trip around the Northeast of the United States. Charging infrastructure woes aside, was the EV cheaper to run as advertised? And if so, how much did I save compared to driving an old-fashioned car?
I crunched the numbers and here they are.
A note: these stats are specific to my experience driving a Hyundai Ioniq 5 AWD with a 77.4 kWh battery. From informal conversations I’ve had, the numbers I have here are comparable to what people see with a Nissan or a Ford or a Tesla so they should be a good enough indicator for most EVs.
The Ioniq 5 can go for about four hours on a full charge during regular day-to-day use. In perfect conditions (mild temperature, eco mode, no aircon, max regen setting) it can do more than 480km on a charge. In the real world I've been averaging around 420km.
(To my US readers who find the metric units confusing: call your representative and tell them that you’ve had it with this legacy of British colonialism and that you demand the US adopt the metric system asap! But I digress.)
The range does dip about 20% when driving on the highway. That’s right: contrary to ICE vehicles, EVs perform better in the city than they do on the highway. But even at highway speeds I could still drive for over three hours before I had to recharge.
During my road trip I planned pit stops every three hours or so, aiming to use the battery down to 10% or 20%. I can get the fastest charging speeds at that level, usually able to fill all the way up to 80% in less than half hour on a 150kW charger. Thirty minutes is a slightly longer stop than I’d like, but not unreasonably so, and if I wanted to take advantage of charging stations closer together I could probably do 15-minute stops every two hours and just keep going forever.
How about the cost?
The average performance on the trip was 5km/kWh. It performs a little worse when just driving on the highway, and when I stay off the highways and go into “grandma driving mode” it can go up to 6.3km/kWh. A more faithful representation of what real-world usage looks like to me is to take into account the whole six months for which I have had the car, and in that time period it has averaged 5.5km/kWh.
At that average performance, and assuming the cost of 30¢ per kWh at my Level 2 home charger, I pay 5¢ per kilometer driven, compared to 9¢ for my old Mazda CX-5, assuming gas at $3.50 per gallon. That is quite an optimistic assumption on my part in favor of ICE, since at the time of writing gasoline prices where I am are above $3.80 (a big problem with ICE economics is the unpredictable nature of global oil prices.)
All told, when charging at home I save $4 per 100 km. In practice though, Hyundai gave me two years of free charging with Electrify America, so I am currently running the car at no cost, a savings of at least $9/100 km.
All that means that taking the EV on my 3,500 km road trip has saved me at least $140 compared to driving ICE and in reality I saved $315 given the free charging, and probably $350 given current gas prices.
Looking ahead to a full year, my typical mileage of 16,000 km means $1,440 in annual fuel savings in the first two years, and $640 when charging at home once the free charging deal runs out.
What the EV economics look like in the longer term
While I haven’t done the exact math to forecast my costs after year two, I think I can optimize further to bring annual fuel savings up from the $640 closer to $1,000 per year. Because Electrify America in Massachusetts bills per minute of use rather than per kWh delivered, a 30-minute session that will cost me $9.60 delivers 46kWh to the car (from 20% to 80%.)
That means each kWh at EA costs me about 20¢, compared to the 30¢ I pay at home. It can get even cheaper when using the faster but still hard-to-find 350kW charger: the other day I got 54kWh delivered to the car in 27 minutes, equivalent to 16¢ per kWh (Hyundai claims the Ioniq 5 can charge even faster but I have not gotten close to the advertised benchmark.)
Charging speed dips considerably after the battery gets to 80% at which stage EA starts to get a bit expensive as it is no longer worth paying by the minute. But in the rare occasions when I need a fully charged battery, I can always top up at home and the 30¢ per kWh I get with my Level 2 is still much cheaper than gasoline.
I should point out that all my numbers are based on the performance I observed during summer and fall. I am yet to experience the effects of a cold Boston winter on the NCM lithium-ion battery, when I expect car and charging performance (and the comparison to ICEs) to worsen by 20% or maybe a lot more.
All taken into account, I forecast that after two years of owning my Ioniq 5 I will have gained a combined $10,000+ in tax credits ($7,500) plus charging credits ($2,880).
$10k happens to be the sticker price difference to a new Mazda CX-5, a comparable (but inferior) ICE. That means I will beat price parity in no more than two years. Despite higher insurance premiums and coolant fluid costs, the lower maintenance (incl. no oil changes!) and the $600-$1000 in annual fuel savings after year two make the numbers look even better and bring the total cost of ownership well below that of traditional cars after 5 years.
I go as far as saying that the EV is such a better product that I would be happy with TCO parity, or even slightly higher. As it turns out though, from where I’m sitting the product is better and cheaper.
And did I mention that driving electric helps fight climate change too? 😉
Another question I am often asked is: Why choose Hyundai over Tesla, since the latter is still by far the most popular choice for EV buyers. I have more reasons than I care to go into here, but to put it simply: for my own purposes, the Ioniq 5 is a better car than the Model Y, and a whopping $17k cheaper once I account for the US tax credits. So really, it wasn’t even close (but read this before buying a Hyundai or Kia expecting tax credits after the Inflation Reduction Act was signed into law.)
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