NCPA - National Center for Policy Analysis

Electric Cars: The Environmentalist Paradox

June 18, 2013

The government recently said that the fuel cost for an electric vehicle is only about one-third of the cost to fuel a gasoline vehicle for the same distance, but that Energy Department (DOE) formula leaves out some key financial and environmental factors in the overall cost of owning an electric vehicle, says USA Today.

  • Electric car owners spend only $1.14, on average, to go as far as gasoline-car owners do on one gallon of gas, which averages about $3.63, according to travel consultant AAA.
  • The $1.14 number was trumpeted by electric-car interests ranging from General Motors, which sells the mostly electric Chevrolet Volt, to a variety of clean-fuel and environmental advocacy blogs.
  • However, the DOE calculation blazingly illuminates a sharp conflict between clean fuel and cheap fuel.

Electric cars are so cheap to run because of cheap electricity available to recharge the batteries. The reason electricity is cheap is because of cheap, if not always clean-burning, coal, and cheap, if not necessarily carbon-emission-free, natural gas.

  • Burning coal accounts for about 40 percent of the power generated in the United States, according to U.S. Energy Information Administration (EIA) data for the first quarter of 2013.
  • Coal's share of electricity generation has ranged from a post-recession high of 47.4 percent the first quarter of 2010 to a low of 36.3 percent first quarter last year, according to EIA data.
  • During the same period, natural gas has ranged from a low of 20.5 percent in the first quarter to a high of 33.1 percent of all fuel used to produce electricity in third quarter last year, EIA says.
  • All told, roughly two-thirds of the fuel was burned to provide power to recharge the locally clean, electrified vehicles is carbon-based.

Beyond the environmental costs, the DOE calculation also does not factor in the purely financial drawbacks of electrified vehicles that include:

  • Expensive accessories and your time: Getting and installing a 240-volt home charger for a plug-in hybrid or electric car -- pretty much a practical necessity -- runs $1,500 to $3,000.
  • Expensive batteries: To replace a battery pack outside of warranty could cost from $4,000 to more than three times that much for a $70,000 Tesla luxury electric.
  • Uncertain depreciation: Electrified vehicles will depreciate much faster from the sticker price than the most-similar gasoline models. But, if you assume the buyer got the federal subsidy and possible state aid, depreciation's similar for the gas and electrified models.

Source: James R. Healey, "Electric-Car Costs Can Outweigh Cheap Fuel," USA Today, June 12, 2013.


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