The Cost of Driving

My primary modes of transportation are walking and bicycling. I’m 61 years old and have never had a work-related parking permit, because I’ve always managed to live close enough to work or school to get there in less than an hour on foot or by bike. Biking is obviously more efficient, but it is remarkable how many problems I solve in my mind while walking.

When I’m on my bike, I’m pretty much focused on not getting hit by a car. It has gotten worse over the past several years with texting drivers or with the growing number of people who think that they are in a video game behind the wheel of a car. In contrast, when I am walking I plan my day, think about a difficult problem at work, memorize a song for guitar, or just day dream. It really is quality time.

My wife and I need a car, but we certainly don’t need more than one. Everyone is focused on the cost of gas these days, but the overall cost of car ownership is much more than that. I recently estimated that for our situation, the actual cost of the car, insurance, maintenance, and repairs was about $700/month for our former 2019 Subaru Outback. This is remarkably in agreement with the reimbursement that my employer will pay me to use my car for work-related activities: $0.585/mile. The average American drives 14,263 miles per year, according to the Federal Highway Administration. At 58.5 cents/mile, that amounts to just over $695/month.

But these numbers don’t include the costs to our health, such as lack of exercise and breathing the pollution produced by cars. Even more important, these costs don’t reflect the impact of burning gasoline on our climate, which experts agree needs drastic measures within the next decade to avoid the worst outcomes of climate change.

Last week, the United Nations Intergovernmental Panel on Climate Change (IPCC) released a large report with 270 leading experts detailing the impacts of climate change. A nice discussion of this report is on the NPR 1A podcast.

The bottom line is that we need to do much more to reduce our use of fossil fuels and greenhouse gas emissions if we are going to avoid the worst impacts of climate change.

Ironically, there are now bipartisan efforts in the USA to cut gasoline taxes in order to make gas more affordable during the recent spike in prices due to Putin’s war against Ukraine. I acknowledge that gas taxes are regressive and impact low-income drivers much more than wealthy drivers, but we need a better approach to solving this problem than simply cutting gas taxes to make it cheaper to drive gas-burning cars. Fortunately, more cities are making public transportation free or more affordable.

About 6 years ago, my wife and I leased a electric vehicle that got just over 100 miles on a charge. It was a great car that made us realize how nice electric cars are to drive, but we struggled to even drive 60 miles each way to Atlanta. It was pretty difficult to do this short trip without charging in Atlanta before returning home. For the past 3 years, we owned our Subaru Outback, which got about 30 mpg. It was a nice and reliable car, but a round trip visit to Atlanta at $4/gallon of gas costs about $16. And despite Subaru’s environmental PR, it still produces emissions that contribute to climate change just like other cars that get ~30 mpg.

Two weeks ago, we traded our Subaru for a new Kia EV6, an all electric vehicle with an EPA estimated 310 miles of range. We are actually getting about 324 miles range using the Eco driving mode. It is a great car, with an outstanding warranty that includes 10 years/100,000 miles on the battery. Kelly Blue Book recently determined that the average price of a new car in Jan 2022 was an astonishing $47,100. We paid about $5000 more than this, but we will get $7500 back in Federal tax credits next year, so the net result is slightly less expensive than the average new car price. It is still crazy expensive for a car, especially when you compare the cost of a nice bicycle.

Buying a new car is especially hard and more expensive these days with the supply-chain and computer chip problems. It certainly is a strange economic time that we are in right now. I am no economist or financial advisor. However, I can report that in the first 300 miles of use, we are averaging 3.8 miles/kWh in our EV6 with a mix of both city and highway driving. This number is hard to compare to the more familiar miles/gallon of gas.

The best way to understand the cost savings is to convert miles/kWh to miles/dollar. Our electric utility, Georgia Power, offers an electric vehicle plan that includes an advertised 1 cent/kWh rate from 11 pm to 7 am. It turns out that this advertised cost is a bit of a smoke screen, because the true rate is 1.4993 cents/kWh and they add an additional 2.8241 cents/kWh that is a constant “Fuel Charge” that is applied to all electricity at all times of the day. So the GA Power EV plan actually costs us 4.3234 cents/kWh, which is still a great bargain. GA Power (and I imagine many other public utilities) can offer this rate, because they have excess power at night when overall demand is low, so they offer it at a discount. You pay more during the day, but as I will write in a future post, this can be largely offset by either conserving during the day or (better yet) installing a residential solar system.

Our true cost of charging our Kia EV6 at home using the GA Power EV rate plan is 1.14 cents/mile ((4.3234 cents/kWh)/(3.8 miles/kWh)). Thus the round trip visit to Atlanta that cost about $16 in our Subaru is now just $1.37 in our EV6. Extrapolated to the average number of miles driven in a year by Americans (14,263 miles), the annual fuel cost of driving our Subaru would have been about $1,900 at $4/gallon gas prices. In contrast, the electricity costs for our EV6 to drive the same distance is about $163 (assuming we always charge at home from 11 pm to 7 am).

Thus, just for fuel costs, we are saving about $1737 each year by just switching to an all electric vehicle. And we never need to go to a gas station! This cost savings does not include the much lower maintenance costs of owning an EV (no oil changes, very few moving parts to break). And with a charging infrastructure in the USA that is growing daily, it is possible to drive most places with a range of 310 miles. That range certainly exceeds my bladder’s. There are services such as ChargePoint that provide detailed maps of charging stations across the country that allow for efficient trip planning with an EV. Despite current supply chain issues, I think that now is a good time to switch from gas to EV if you are in the market for a new car. To get the real advantage, you need to charge from home or have a reliable (and affordable) charging service for daily use. If you utilize EV rate plans like the one offered by GA Power, you can fairly quickly make up for difference in purchase costs of an EV and a comparable gas-powered car.

And did I tell you that EVs really are nice cars? Try one out if you are in the market for a new car. They are fun to drive and are much better for our fragile planet.