Powering Strong Communities
Electric Vehicles

Report outlines financial benefits of EVs over 15-year time frame

Motorists can save as much as $14,500 on fuel costs over 15 years by driving an electric vehicle rather than a gasoline fueled vehicle, according to a new report from the Department of Energy’s National Renewable Energy Laboratory (NREL) and Idaho National Laboratory (INL).

NREL and INL release details from the study, Levelized Cost of Charging Electric Vehicles in the United States, on June 22.

The current national average least cost of charging (LCOC) is $0.15 per kilowatt hour (kWh) for light-duty battery electric vehicles and $0.14/kWh for light-duty plug-in hybrid electric vehicles, the report found. The national average cost to charge a battery EV ranges from $0.08/kWh to $0.27/kWh, corresponding to average lifetime fuel cost savings ranging from $3,000 to $10,500.

The LCOC values in the report are similar to the average residential cost of electricity of $0.13/kWh reported by the Energy Information Administration.

“Finding out the purchase price of a vehicle is relatively simple, but the savings related to fuel aren’t readily available, especially since electricity cost varies greatly for different locations and charging options,” Matteo Muratori, a senior systems engineer at NREL and co-author of the article, said in a statement.

The NREL-INL study conducted a state-level assessment of the cost of electric vehicle charging that took into consideration when, where, and how a vehicle is charged, and considered “thousands of electricity retail tariffs and real-world charging equipment and installation costs.”

Factors that account for the variations include differences in the price of electricity, the types of equipment used (slow or fast charging stations), the cost of installation, and vehicle miles driven.

For battery electric vehicles, the authors assumed that most charging, 81%, was done at a home charging station with 14% at the workplace and/or public level 2 charging station, and 5% at a direct current (DC) fast charging station. For plug-in hybrid electric vehicles, the assumptions were 81% of charging was done at home and 19% at a workplace and/or public charging station.

State variations in LCOC can be attributed to a variety of factors, including differences in the cost to generate and distribute electricity and the availability of electric vehicle utility tariffs, including residential time-of-use (TOU) and commercial rates with low demand charges.

The LCOC for battery electric vehicles ranged from $0.10/kWh in Oregon to $0.31/kWh in Hawaii, with most states in the $0.12/kWh to $0.16/kWh range, the report found. Four states – Alabama, Hawaii, Mississippi, and Tennessee – failed to provide any savings.

States with higher gasoline prices, such as California and Pennsylvania, are more favorable for electric vehicles despite their LCOCs being higher than the national average, the authors found. Conversely, they said states with lower gasoline prices, such as Texas and Tennessee, were less favorable for electric vehicles.

The authors also cited insights from the report. It is currently more economical for electric vehicle owners to charge at lower power levels because it minimizes the cost of equipment and reduces utility demand charges, they said.

They also said that DC fast charging stations are currently the most expensive charging option for battery electric vehicles because of high capital costs, low utilization rates, and the imposition of commercial tariffs with demand charges.

Higher vehicle use or equipment lifespan can significantly reduce this cost. Moreover, L2 charging is faster and enables greater flexibility to reshape EV charging loads and leverage TOU electricity pricing.

Residential charging is typically the most cost-effective option, especially when leveraging off-peak TOU pricing, according to the report. “Shifting all residential charging to off-peak TOU periods reduces charging costs by 26%,” the authors said.

NEW Topics