Or how to shatter the myth of the high cost of an electric car
[Update: December 28, 2015] The following post was written in March, 2013 when gasoline prices were near their highest levels of the past five years. Look for an update to this article soon
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We read, almost daily, reports and articles and diatribes about the evils of electric cars – their high cost, their expensive batteries, and whatever else the author wishes to include in the article du jour. We would like to provide an alternative scenario that is currently available regarding the LEAF specifically.
The 2013 Nissan LEAF S trim level is currently available (through the end of March in certain regions), for a lease payment of $199 per month for 36 months with $1,999 down. There is a $595 acquisition fee and there is also a disposition fee at lease end of $395. So let’s do the math – and we come up with a total of $9,558 in payments and fees over three years.
As you know, the biggest cost of operation for a new vehicle is fueling it. This is where the LEAF really starts to shine compared to a traditional internal combustion engine (ICE) vehicle. Over the past two years our biggest monthly electricity bill for our LEAF has been $26. In fact, in 21 months, we have accrued an electricity cost of $373 to operate our 2011 LEAF. But then again, we have only accumulated roughly 12,000 miles on our car in just under two years. So let’s look at a more typical situation. In our example below we will use data provided by the Environmental Protection Agency (EPA).
According to the EPA, the annual cost of electricity to power the 2013 LEAF is $500, or less than $10 per week. This cost is based on driving 15,000 miles per year while paying $0.12 per kilowatt hour. Over the three year lease of the LEAF, the total cost for electricity will amount to $1,500. By the way, this is an improvement over the outgoing LEAF, which had an annual energy cost of $561.
Also according to the EPA, the average new car sold in the U.S. in 2013 will achieve 23 miles per gallon. The EPA uses a fuel cost of $3.75 per gallon of regular gasoline to determine comparison information. You can tailor these numbers for your personal situation. For instance, the San Diego average cost for a gallon of regular gasoline right now is $4.26 according to gasbuddy.com. Driving the same 15,000 miles per year, the average new car will cost $2,446 in gasoline each year, or over $47 per week. Over the three years of the lease this amounts to $7,338 in fuel costs. This would be almost $1,000 more in San Diego at current prices.
We are not generally advocates of leasing automobiles, as our personal belief is that a lease is just a long term rental where no equity is accrued. But in the case of EVs, our minds have been changed over the past two years. This is a developing technology with ongoing improvements yet to be determined, as well as those we have already seen (such as this year’s 15 percent improvement in range in the LEAF along with a price reduction). For the sake of comparison, let’s say that we have found a suitable gasoline powered alternative vehicle that achieves the 2013 combined average (not highway) fuel economy of 23 miles per gallon, and that we can lease for the same amount as the LEAF.
Acquisition costs are identical. Fuel costs, however, favor the LEAF lease by $6,777. The unknown cost of the battery is not an issue as battery replacement becomes the concern of Nissan. Both cars will need tires and windshield washer fluid, but the EV requires no routine oil and filter changes, nor does it require periodic stops at a gasoline station to refuel, thus saving the owner time. Your EV will charge while you sleep, and should you need to supplement that charge, quite often you can do so while at work or at lunch. Getting gas at a gas station can take anywhere from five to ten minutes. Let’s use the lower number. If you just get gas once each week for three years, you will spend 13 hours at a gas station. Don’t you have better things to do?
What about hybrids, we hear someone asking. Assuming that you could get the same lease pricing for a hybrid, keeping all other costs equal, one would need to achieve a combined fuel economy of 112.5 miles per gallon to achieve an annual $500 fuel bill. That is with a gasoline cost of $3.75 per gallon.
The LEAF is not for everyone. But for those that fit within the operational envelope of the LEAF, Nissan’s current lease program provides a compelling incentive.
Other articles that you may be interested in:
Department of Energy chimes in on cost of driving an EV (found here)
How much does it cost to drive a Nissan LEAF? (found here)