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Saving Money with Electric Vehicles

September 16, 2015 - 10:04am


If you thought owning an electric vehicle wasn’t an affordable option for you, think again.

To celebrate National Drive Electric Week, the Department of Energy and Energy Saver are spreading the word about plug-in electric vehicles (EVs). In addition to reading about EVs here, we encourage you to share your EV story by posting your experiences to your social media accounts with the hashtags #ILoveEVs and #NDEW2015. Find out if an EV could fit your lifestyle on the new EV Everywhere website.

With transportation ranking as most households’ second largest expense after housing, using less fuel can add up to quite a bit more money in your wallet. Plug-in electric vehicles (PEVs, including all-electric vehicles and plug-in hybrid electric vehicles) have substantially lower fuel costs than conventional vehicles because they’re such efficient cars and electricity is less expensive than gasoline. Combined with the convenience of plugging in at home and how much fun they can be to drive, a PEV can be a solid investment for many drivers. Here are just a few of the reasons why:

Prices for electricity are stable.

In general, it can cost about half as much to drive an electric vehicle (EV) as an equivalent gasoline vehicle. Using national averages, EV drivers pay $1.22 to drive the same distance a conventional car could go on a gallon of gasoline. Although gasoline prices are currently low, petroleum prices are historically very volatile and could change substantially in the future. Over the past 10 years, gasoline prices have fluctuated from below $1.50 to more than $4 a gallon. In contrast, electricity prices are much more stable, helping to keep your fuel costs predictable and easier to fit into your budget.  

Additional discounts on electricity are available in some areas.

Some PEV drivers can take advantage of even lower electricity prices than usual if their utility offers special rates for off-peak charging. To help balance the load on the electricity grid, utilities would prefer that drivers charge at night when there is less demand for other electricity needs (e.g., most people turn off  lights and appliances at night). With the help of smart chargers, PEV owners can "set it and forget it," allowing them to charge their car at the lowest price possible.

Maintenance costs for PEVs are lower.

Beyond fuel, maintenance costs of PEVs can also be lower than those of conventional vehicles. In general, all-electric vehicles that use only electricity require less maintenance because there are usually fewer fluids (like oil and transmission fluid) to change and fewer moving parts. In addition, with regenerative braking that captures energy that would otherwise be lost during braking, brake systems on both types of PEVs typically last longer than conventional vehicles.

However, plug-in hybrid electric vehicles, which run on electricity and switch to a gasoline engine when the battery is low, will have similar maintenance requirements to conventional vehicles.

Federal and state incentives are available.

Purchasing a PEV can be more expensive than an equivalent vehicle, but the federal government and many states offer incentives to lower that price. The  Internal Revenue Service tax credit is for $2,500 to $7,500 per new PEV, depending on the size of the vehicle and its battery capacity. Some states and cities offer both financial and non-financial incentives, including tax credits, vehicle or infrastructure rebates, vehicle registration fee reductions, and high-occupancy vehicle lane exemptions.

Find out if a PEV is right for you with our new EV Everywhere website, which has a variety of information on PEVs including vehicle models, charging, PEV benefits, incentives, and personal stories.