Electric cars have dramatically lower fuel costs than gasoline ICE cars.
The lower fuel costs allow you to spend more up front the electric car and pay less in the long run.
How much less?
Here is a chart of the two largest costs of owning a car, this example is a Ford Fiesta that cost $16000 and gets 33mpg and drives 12000 miles per year.
Gasoline is assumed to cost 4$ a gallon and increase at the same rate it has for the last 10 years – 8.5% per year.
Here is a similar chart for a Nissan Leaf that cost $26000, using electricity at 11cents per kWh ( national average for 2011 ) that gets 3 miles per kWh and drives 12000 miles per year.
Electricity is assumed to increase at 4% per year, and a battery replacement is assumed to be needed at 100,000 miles and assumed to cost $6000.
Lets look at a selection of cars to compete with the Nissan Leaf:
Now lets look at the cost over time for all those cars.
Fuel economy is assumed to be: 33mpg for the Fiesta, 26mpg for the Mazda6, 22mpg for the Hyundai SanteFe, 28mpg for the Mazda3, 45mpg for the Prius.
Same fuel assumptions are made $4/gallon increasing at 8.5% per year, and 11cents per kWh increasing at 4% per year.
We’re going to look at only 2 costs, depreciation and fuel. We assume that the ICE car immediately depreciates 15% on day 1, and then 15% per year after that.
Assume the electric car does the same, except we depreciate the battery even faster. Assume that the battery needs to be replaced after 100,000 miles ( this is a guess ) and the value of that battery depreciates to zero at that point ( and then you pay to buy a new one, and it starts depreciating ) The cost of the battery replacement is a guess.
There is reason to believe that the ICE cars will actually depreciate faster – depending on how bad their fuel economy is and thus how much it will cost to fuel them down the road – but we’ll ignore that for now.
The Leaf takes only 4 years to defeat its lowest cost competitor – the Ford Fiesta.
After 10 years, the total cost is dramatically lower than all the cars compared.
This comparison requires that you remember that a Nissan Leaf has significantly less utility than all those other cars for long trips due to its limited range.
Now lets look at the 160 mile range Model S.
We’ll compare the Model S to cars that cost dramatically less. ( The Model S will have better performance, occupant room, cargo room, and will only lose on range )
The fuel economy for the BMW 325 and Lexus ES350 is assumed to be 23mpg.
Again we assume that we will have to replace the battery at 100,000 miles and we make a guess at what that battery replacement will cost ( 8 years from now in 2020 )
How do the costs stack up:
The Model S easily defeats luxury cars that cost a lot less, and even defeats the Hyundai Sante Fe that costs less than half as much after about 9 years.
Now lets jump up to the super expensive 300 mile range Model S which provides a range that is almost no compromise over a gasoline car.
We compare it to cars that should provide similar luxury and performance.
And now the running costs:
The luxury cars that cost around $10000 less than the Model S are quickly dispatched, and even the Lexus that is priced $24000 less is bettered after about 10 years.