For many drivers, cost savings is the No. 1 reason to ditch their gas-powered vehicle in exchange for an electric model.
Even though electric vehicles (EVs) are generally priced higher than their gas counterparts, they provide the opportunity to save money in the long run. That's why the market continues to grow at a rapid pace.
But there's something you need to consider. EVs require electricity to transport you from point A to point B, and that's not always cheap.
EVs Vs. Gas-Powered Vehicles: Which Were Cheaper To Fuel In 2022?
Electricity and gas prices are in a constant state of flux. Comparisons between the cost to charge EVs and gas-powered vehicles also change regularly.
According to a recent study conducted by the Anderson Economic Group, EVs were more expensive to fuel than gas-powered vehicles during the final quarter of 2022.
Here's the primary takeaway from the study:
In the fourth quarter, typical mid-priced internal combustion image (ICE) car drivers paid about $11.29 to fuel their vehicles for 100 miles of driving. That cost was around 31 cents cheaper than the amount paid by mid-priced EV drivers charging mostly at home and over $3 less than the cost comparable EV drivers incur by charging commercially.
Rising electricity prices combined with lower gas prices made it more affordable to fuel a gas-powered vehicle in late 2022.
But that doesn't mean it's cheap to fuel a traditional gas-powered vehicle. The average cost per gallon of gas in the United States was $3.54 for May 11th. Prices ranged from $2.99 per gallon in Mississippi to $4.81 per gallon in California.
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Anderson Economic Founder Group Patrick Anderson noted, "The run-up in gas prices made EVs look like a bargain during much of 2021 and 2022." But, he added, "With electric prices going up and gas prices declining, drivers of traditional ICE vehicles saved a little bit of money in the last quarter of 2022."
Translation: Sometimes it's more costly to operate an EV, while other times it's more costly to operate a gas-powered vehicle.
This could be largely because of the infancy of EV infrastructure. As economies of scale begin to come into play, it’s likely those costs will begin to decrease below current ICE cost levels. With states like California banning off-road gas-powered motors in July, some might not have a choice anyway.
Regardless, there is a substantial amount of money to be made in the space, and it’s clear consumers are willing to transition early in hopes of later cost savings. Tesla’s famous 2,500% run over two years made several people millions, and the company now clears billions in profits per quarter.
In the startup investing market, retail investors have invested hundreds of thousands into startups like Civilized Cycles, an electric micro-mobility solution currently live on Wefunder.
Quick tips for saving on EV operating costs
There's more than one way to save on EV operating costs:
- Think about when you're charging: When possible, charge your vehicle at home during off-peak hours. It generally costs less than if you're charging during peak hours.
- Find free EV charging stations near you: From grocery stores to retail shops to hospitals, there's no shortage of free charging stations throughout the United States. Take advantage of these as your schedule allows.
- Beware of the heat: When temperatures rise above 86 degrees Fahrenheit, electric vehicle range is reduced. Avoid driving when possible, and charge in the shade if the option is available.
EVs are selling at a fast pace and this will continue to hold true thanks to new laws, regulations and incentives.
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