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Cars EV-wedge

Published on April 1st, 2014 | by Shrink That Footprint

10

Electric Vehicle Wedge — Electric Vehicles Vs Gasoline Cars By Country & Car

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April 1st, 2014 by  

Originally published on Shrink That Footprint.
By Lindsay Wilson

EV wedge

Have you ever heard of the EV Wedge?

No? Me neither. Let’s try to define it then.

If you’d asked me to define the ‘Electric Vehicle Wedge’ a few years ago I would have chuckled a little, and suggested it was the small pile of cash you needed to afford one. But due to falling EV prices and rising gasoline prices that snark is utterly outdated.

In almost all countries it is cheaper to power an electric vehicle than fuel a gasoline car. The cost gap between these two fueling options is what I like to call the EV Wedge. In some countries this wedge is so damn big that EV drivers can’t sit straight for all the cash in their wallet.

Comparing Gasoline and Electric Fuel Costs

This post provides a cheap and cheerful comparison of fuel costs for electric vehicles and gasoline cars. To keep it simple I thought we’d look at the costs of fuel for driving 10,000 miles. This is about 25% less than Americans drive each year, or 20% more than Europeans.

The graph below compares the fuel costs of driving 10,000 miles in a Nissan Leaf (electric) and Toyota Prius (gasoline hybrid). I’ve shown this graph first so we can see how the fuel savings are calculated. It also shows us that both the electricity price and gasoline price are relevant when estimating the fuel savings.

Electric vs gasoline fuel costs

The first thing to note is that the fuel cost of driving a Prius is greater than the Leaf in all 12 countries we collected data for. The variation between both electricity and gasoline prices across countries is enormous.

In countries where gasoline is expensive, like Turkey and Norway, the fuel cost for driving a Prius 10,000 miles is pushing $2,000 whereas in Saudi it is just $120. The fuel cost of driving the Leaf 10,000 miles varies greatly too. From as high as $980 in Germany down to $116 in Saudi.

The difference between the gasoline and electricity costs is what I call the EV Wedge. By showing this graph first we can see that in places like Germany and Australia high electricity costs can eat into the wedge. Where electricity prices are high savvy EV owners look to solar, or time of use pricing, to drive down their charging costs.

The EV Wedge: Nissan Leaf vs Toyota Prius

In each of the last three months of 2013 the most popular new car in Norway was either the Nissan Leaf or Tesla Model S. There are loads of reasons behind this, including no purchasing tax, free tolls and access to bus lanes. On top of this the EV Wedge is enormous!!

Here’s the data we looked at above but now purely looking at the fuels savings, the wedge that is.

EVwedgeprius

Over the course of driving 10,000 miles a Prius driver in Norway spends $1,544 more on fuel than a Leaf driver. In Turkey that figure is $1,360, in the UK it’s $986, in the US it’s $410 and in Saudi it’s just $5. Just add a zero and you’ve got the fuel savings for 100,000 miles assuming constant prices (the problem with any lifetime comparison).

All the figures assume the typical combined fuel economy for each car and the 2012 average prices for gasoline and electricity in each country. In cases where the electricity used to charge is cheaper than the household grid average this figure will be greater. This is actually a really important point because typically a majority of EV owners use off-peak charging when available.

In the comparison above we’ve compared two compact hatchbacks. But the 50 MPG Prius is actually pretty damn efficient for a gasoline car. The EV Wedge only gets bigger when you start comparing less efficient petrol cars to electrics.

The EV Wedge: Nissan Leaf vs Toyota Camry

I know that the Toyota Camry is a bigger car than a Leaf but I find this a fun comparison. It is basically America’s most popular electric car (the Leaf) against its most popular sedan (the Camry). Unlike the Prius, the Camry only gets 28 MPG. So the fuel savings from driving a Leaf are considerable.

EV Wedge Camry

When you compare the fuel costs of the Nissan Leaf to a less efficient petrol vehicle like the 28 MPG Camry they really start to stack up pretty quickly. Don’t get hung up on it being an American Camry, these figures hold for any 28 MPG car gasoline car.

In European countries where taxes on petrol are high the savings from going electric are considerable. The fuel savings of driving a Leaf instead of a 28 MPG petrol car in the UK are $2,260 for each 10,000 miles. Even in the US where gasoline is relatively cheap there is a $1,000 saving.

Finally, just for a laugh let’s run the numbers for some luxury cars.

The EV Wedge: Tesla Model S vs Mercedes

I know very little about luxury cars. I’m not even sure if someone spending $100,000 on a car really cares much about fuel costs. I’m guessing they love the Tesla because of the torque and the ride. But then again I may be wrong.

You see the Tesla Model S has topped monthly sales in Norway twice recently. Not just for electric cars, but for all cars. The tax exemption for buying is no doubt a big deal. As is the ride.

But just check out these fuel savings for the Tesla Model S compared to the 19 MPG Mercedes 550S.

EVwedgetesla

Not only do Tesla Model S drivers enjoy the pleasure of driving the best car Consumer Reports have ever tested, but in Norway they’ll be able to buy the next one using fuel savings from their first.

Throw in some very modest rises in petrol price over the next decade and a Norwegian Tesla driver will save more than the purchase price by the time they’ve driven 150,000 miles. Even for places like the UK, France and Germany the figures are pretty impressive.

When you consider that Tesla offers free supercharging in many places you start to see why they have waiting lists. With free electricity the US fuel savings versus the 19 MPG Mercedes jump to $2,000 per 10,000 miles. In the UK, France and Germany they go above $4,000. In Norway and Turkey it’s above $5,000.

Curiously I actually think the graph above will eventually be more important for the Pickup Truck market than it is for luxury cars. You see those numbers aren’t far off what the sums might look like for a ‘Tesla Truck‘ vs a Ford F-Series. And while we may be a few years away from batteries cheap enough to justify electric trucks their potential for fuel savings is just colossal when you consider a F-150 gets 19 MPG.

What to make of the EV Wedge?

To keep this post a bit of fun I avoided delving into lifetime cost comparisons and the fuzzy assumptions they involve. Instead I’m just trying to point out something that should be clear by now. Powering a car with electricity is cheaper than fueling it with gasoline (unless you live in Caracas).

Here are some basic takeaways:

  • Gas prices are key: the higher the gasoline price the bigger your potential savings are. This makes electric cars attractive in Europe.
  • Electricity prices also matter: the potential benefits of going electric can be eroded by high electricity prices. Germany and Australia are good examples.
  • Fuel economy matters too: the poorer the fuel economy of the car you are switching from the bigger your fuel savings will be. You can see this in the more than doubling of the wedge between the Prius and the Camry.

Because of the varying differentials between gasoline and electricity prices the fuel savings from going electric vary massively from place to place. But in general the economics for electric vehicles just keep getting better.

If you’re looking at buying an electric vehicle in a couple of years when prices drop some more there is something worth thinking about. You see electric vehicles are a bit like solar was a few years ago. There are currently some very attractive grants and tax breaks that take some pain out of the purchase price, and this means EVs look great from a lifetime cost perspective.

As battery prices keep falling and production scales increase there is a good chance electric cars will keep getting cheaper. As prices go down and sales go up the current level of subsidy will make less and less sense for governments, just as it did for high feed-in tariffs with solar. In fact in some places they already seem too attractive.

If I was in the market for an electric vehicle I’d be keeping a very close watch on my local EV grants, tax rebates or other incentives.

If I lived in Norway I’d be on a waiting list, because it would also cut a lot of carbon.

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About the Author

Shrink That Footprint is a resource for squeezing more life out of less carbon. We are an independent research group that provides information to people interested in reducing their climate impact. Our core focus is understanding, calculating, and reducing personal carbon footprints.



  • Byron Meinerth

    I enjoyed this article. Another factor that I think is important is for countries who are net importers of oil and want to decrease their exposure to volatility and/or high prices in the oil futures market. China is perhaps the best example of this right now, as they have decreased oil use in domestic flights by increasing high-speed rail, and are incorporating more and more electrified means of transportation in their cities (metro lines, electric buses, electric taxis, etc.).

    • A Real Libertarian

      Plus, cut down on the air pollution.

  • Rockne O’Bannon

    Another good article. This site is attracting some talent. It is great to see.

    Probably nobody will go a step beyond the graphs presented here, but I will. The cases of Norway and Saudi Arabia. Why so different? The answer is exciting to me, and shows a glaring failure of the Saudis and some pretty level-headed foresight by Norway.

    I would also suppose that Japan is probably going to weigh in at about the level of Germany, and I would hasten to caution everyone that although using fuel costs ALONE for simplicity of comparison, there are going to be plenty of other factors that people will consider. Just for instance, countries with higher wedges might be likely to give greater subsidies for EV (yay), but the benefits are likely to be imputed in the price of the EV (BOO) or in availability (waiting lists, boo). Are those numbers affected greatly by off-peak charging? Taxes? resale value? battery replacement? Who knows.

    Your mileage may vary, as they say.

  • wattleberry

    This is just the data to tell it how it is. Great!
    As well as Turkey, the UK should be selling far more electric vehicles than it does. Doubtless, now the economy is recovering, more spenders should appear to boost the EV market. Vamos a ver, which reminds me-no stats for Spain but its probably worse than UK, again due to the crisis.
    Your point about not putting off buying is emphasised by governments also up to now not levying excise duties on electricity for vehicles, something that must eventually change-an issue I regularly bang on about.

  • Will E

    EV and Solar on the house and garage and charge at home, The EV car as a mobile storage battery.
    could you make a leverage of that.

    Electricity charge cost zero, against fuel cost?
    will be again a big win for EV car.
    Why do people still buy gaz cars anyway
    and why are gaz cars still produced.

    • Rockne O’Bannon

      Your last questions must be rhetorical. I am not so far out in La la land that I just don’t understand why everyone in the world does not want to ride around in a battery.
      Obviously, I live in a world filled with gas stations selling me a great energy resource that I can pay for with a credit card. It has not increased in price recently, not much anyway, and cars keep getting better and better gas mileage.
      If I just ignore all this “climate change” stuff people keep talking about, buying a cheap ICE car with decent gas mileage makes a lot of sense. Heck, will the world even be here a year from now? What, me worry?

      etc.

  • JamesWimberley

    Good information. But the use of “wedge” is unfortunate. It already has an important meaning in green circles, in “stabilisation wedges”: the portfolio of strategies from which we need to assemble a set to get to zero emissions. (See http://cmi.princeton.edu/wedges/). What makes the wedge image useful is that no one wedge is indispensable, but you have to use most of them to get it them to add up and complete the circle.
    So for the fuel advantage of evs, I’d suggest something else like “leverage”.

  • AhmetA

    This post shows that overlooking Turkish market is a great mistake for electric car producers. There is no big car brand who sales electric cars in Turkey(except globaly failed “ZE Fluence” ). Turkey is bigger than Norway in terms of car market(2013 car sale is 850k) . I am sure that market share of EV will be biggest in Europe if good EVs come to Turkish market(Leaf, i3, Soul etc.). If we assume that market share of EV in Turkey will be same with Norway it translates to 40k annual EV sales. It is a big number in terms of world EV production. If you think gasoline prices in Turkey it seems not such a great number :)
    Turkish goverment offers great incentives for EVs(not hybrid cars).It is a mistake and prevented building a decent EV infrastructure . Actually I am already waiting Nissan to sell its Leaf in Turkey .

    • JamesWimberley

      Good point, I hope Nissan are listening. To be fair to EV manufacturers, they face very high start-up costs in launching a model line in each country. You can’t just tack the evs on to an existing ICE dealer network and hope for the best, it’s a complete technology revolution. So they have to choose their lead markets. Turkey is already on the map for BYD’s electric buses.

      • AhmetA

        Maybe you are right. It seems that EV cars are not source of income for a car brand. I think global brands spend money to get foot in known markets for their EVs. I think Turkey is not in the list. Maybe Nissan-Renault alliance dont sell the Leaf in Turkey because ZE Fluence was in production in Turkey and they dont want another contender. ZE Fluence sales are disaster because of battery rent charges.
        Car producers still launch hundreds of new models in Turkey every year. German models has the biggest market share in Turkey (%30). Almost all cars sold in Turkey are imported from abroad and percentage is %77 very high. This show that Turkish car owners can pay high for the expensive brands. Turkish car owners are suffering from high gasoline prices and potential for EV is huge.

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