How Much Can I Save by Switching to EV?
One of the main motivators for switching to a fully-electric or a plug-in hybrid vehicle is the potential to save money on fuel. Not only are electric motors more efficient than gasoline engines, but electricity is cheaper than gasoline. If you’re set up to charge at home, and especially if you take advantage of off-peak electricity rates, not only can most of your daily driving be emissions-free with an EV or a PHEV – but it can be a lot cheaper as well.
But, prices for gasoline and electricity, as well as daily driving habits, are different in different parts of the U.S., meaning that switching to electric can be more financially attractive in some parts of the country than others. Moreover, the typical vehicle people drive differs from state to state, which can magnify, or reduce, the potential impact of switching to electricity for daily driving. A new study from the Argonne National Laboratory, called “Adoption of Plug-in Electric Vehicles: Local Fuel Use and Greenhouse Gas Emissions Reductions Across the U.S.” attempts to quantify the potential savings of switching to electric – right down to the zip code level.
What Variables Affect Fuel Savings?
The study, one of the most comprehensive we have ever seen, took into account variables including:
- Annual vehicle miles travelled per zip code
- Vehicle registrations per zip code (to determine the mix of vehicles in a certain geographic area)
- Average vehicle model year by zip code and vehicle class (older and larger cars tend to use more fuel)
- Gas prices per zip code
- Home charging percentages
- Residential electricity prices by state
- Public charging costs
- Gasoline fuel economy by vehicle class and model year
- Electric vehicle economy
Northwestern States Offer Drivers the Greatest Savings
The results of the study were not exactly surprising, and closely mirror the markets where electric vehicles already sell in large numbers – suggesting that American consumers are already well-versed in how much EVs can save them. Argonne’s data showed that states in the northwest region of the country, led by Idaho and Washington state, had some of the highest potential for fuel cost savings when switching to EVs. These savings are driven by several factors, but primarily are due to a combination of low electricity prices and high gasoline prices – as well as the vehicle population in these states tending towards larger vehicles like SUVs and pickups. The more fuel the average vehicle consumes, the greater the potential fuel savings.
The geographic distribution of fuel cost savings shows that savings are potentially greater in western states like Idaho and Wyoming, where gas is expensive, electricity is cheap, and vehicles are big. Interestingly, some midwest states like North Dakota, South Dakota, and Montana, also show potentially large fuel savings as their markets are dominated by pickup trucks.
On the other hand, states in the southern and northeastern U.S. show lower potential fuel savings potential. States like New York and Michigan, for example, pay higher rates for electricity, reducing the potential fuel savings. States like Texas and Mississippi have low gasoline prices, diminishing the potential savings of switching to EV.
Metro and Rural Areas Have Different Patterns
Because the study looked at individual zip codes, it also helped highlight the differences between metro areas and rural areas. California is a great example. The state is already a leader in EV adoption, and has set aggressive targets to reduce greenhouse gases by 80 percent by 2050. But it’s not a homogenous market. In metro areas like Los Angeles and San Francisco, smaller, more fuel-efficient vehicles dominate, while pickup trucks are most common in rural areas. Yet vehicles in urban areas have a higher vehicle miles travelled compared to rural areas, meaning both types of area benefit financially from switching to electric.
The flip side of California? Oklahoma has significantly lower gasoline prices, and leans heavily towards pickups. However, city-dwellers in Oklahoma City and Tulsa drive fewer miles per vehicle, while suburban areas have a much higher average vehicle miles travelled (VMT). Therefore, large metro areas in Oklahoma have low potential fuel cost savings while suburban areas, where pickup trucks are common, have more savings potential.
How Much Do EVs Cost?
Regardless of where you reside in the U.S., however, the study’s findings indicate that you will save on fuel in almost every zip code. In fact, 99.9 percent of zip codes would yield a net fuel cost savings for drivers switching from an internal combustion vehicle to a plug-in hybrid or electric vehicle. It was only 0.1 percent of all zip codes in the entire country where operating an internal combustion vehicle was financially beneficial compared to an electrified vehicle.
How much potential drivers would save, of course, varied depending on the zip code, electricity rates, gas prices, and the most common types of vehicles in the area. On average, however, weighting by vehicle population and zip code, battery-electric vehicles yielded a savings of 9 cents per mile, $26.40 per tank, and $626 annually. The highest savings went as high as $2,190 annually.
Should you be interested in a plug-in hybrid vehicle instead of an EV, the savings are almost as good, presuming that you are able to charge at home. On average, driving a plug-in hybrid saves about 6 cents per mile, $18.40 per tank, and $436 annually, with the highest annual savings peaking around $1,540.
With over 20 pages of data, it’s impossible to report on all of the Argonne Laboratory’s findings here. We suggest you go over to the report yourself to learn just how much switching to an electric, or electrified, vehicle could save you.
