By Thad Curtz | | July, 2020

If you’re getting a new vehicle, buying a more efficient one is one of the few things you can do that reduces your carbon footprint substantially and will also save you money in the long run. Almost everywhere in the world, as you go from a conventional gasoline vehicle to a hybrid, and from a regular hybrid to a plug-in, and from a plug-in hybrid to an all electric vehicle, you reduce your emissions. How much money you can save and how much you can reduce your greenhouse gas emissions depends on what kind of car you get, but it also depends a lot on where you live. That determines how much you pay for gas and for electricity, and it determines the emissions from producing and using each of those. To really think about the costs and benefits of getting one of these vehicles, we need to do estimates using local values for Thurston County.

Some recent web sites do let you compare cars in a variety of other helpful ways. (Their URLs are at the end.) Forth has glossy online guides that give an overview of all the currently available EVs and plug-in hybrids. Plug-In America’s Shopping Assistant asks some questions about how you’d use a car, and then gives you information about suitable options and an estimate of the costs for acquiring each of them with cash, a loan, or a lease. The Sierra Club’s Electric Vehicle Guide has less information about pricing (just the manufacturer’s suggested retail price minus available incentives), but it provides estimates for savings in fuel and fuel costs, and for emissions reductions. The Costco Auto site shows you current manufacturers’ incentives and loan offers. (They will often give you a low interest loan; occasionally, the other incentives are impressive too. This month, Chevrolet is offering an $8,000 discount on the Bolt’s MSRP – essentially compensating for the fact that it’s no longer eligible for the $7,500 Federal tax credit.)

The Department of Energy runs a more sophisticated website, The Alternative Fuels Data Center’s Vehicle Cost Calculator, that lets you get closer to genuinely local estimates and conveniently compare vehicles in a variety of ways. It lets you change assumptions about your driving and recharging patterns, local fuel prices, and where you get your electricity, though a number of its inputs are also still fixed at national averages. 

I’ve done some comparisons using current Thurston County values for all the relevant variables. I’m using the average price of regular conventional retail gasoline in Seattle between 2010 and 2019, which is $3.26/gallon, and the local price of electricity – $0.1035/kWh. The emissions estimates include the upstream emissions from the production of gasoline and from the production of the coal and natural gas used to generate PSE’s electricity in 2017. (I’ve used this figure for five years, until 2025, when the Clean Energy Transformation Act is supposed to eliminate power from coal; for the five year transition period from then until 2030, I’ve used half of that; and I’ve treated the “greenhouse-gas neutral” power required after 2030 as emission free, on the somewhat dubious assumption that the 20% of power from natural gas that’s still allowed will actually be effectively offset by the measures in the Act.) I’ve used the default national mileage and driving assumptions from the AFDC calculator – 11,926 miles/year, with 56% of that on the highway. (I’d be glad to share the spreadsheet with anyone who want to see how their own driving pattern might change the results.)

We can’t compare all the possible cars with each other, but we can get a good sense of the basic differences by comparing four very closely related crossover or sub-compact SUVs – the conventional 2019 Hyundai Kona, the 2019 Kia Niro regular hybrid, the 2019 Niro plug-in hybrid, and the 2019 all electric Niro. (The EPA estimates that the plug-in hybrid will go 26 miles on its battery, and that the all-electric model will go 239 miles.) The plug-in qualifies for a $4,543 Federal income tax rebate, and the all-electric qualifies for a $7,500 rebate, plus an exemption from the State’s 6.8% share of the sales tax on $25,000 of the purchase, which is worth $1,700. If people pay the manufacturers’ suggested retail prices and receive the full incentives, they end up paying $21,771 for the Kona, $26,147 for the hybrid, $26,636 for the plug-in hybrid, and $32,919 for the all electric version.

The regular hybrid saves $483 a year on fuel compared to the conventional car, and reduces emissions by 1.58 tonnes a year. The plug-in’s energy costs $707 a year less than the gas car’s and $224 a year less than the hybrid’s; it reduces current emissions by 1.96 tonnes a year compared to the conventional car and by .38 tonnes compared to the regular hybrid. (Over the life of the car, as the grid got cleaner, it would reduce average annual emissions by 2.38 tonnes a year compared to the conventional car and by .8 tonnes compared to the regular hybrid.) Lastly, the all-electric version saves $913 a year on fuel compared to the conventional car; $430 a year compared to the regular hybrid; and $206 a year compared to the plug-in. It reduces current emissions by 2.4 tonnes a year compared to the conventional car, by .82 tonnes compared to the regular hybrid, and by .44 tonnes compared to the plug-in. (As the grid got cleaner over the life of the car, though, it would reduce average annual emissions by 3.09 tonnes a year compared to the conventional car, by 1.51 tonnes compared to the regular hybrid, and by .71 tonnes compared to the plugin.)

Over the life of the car, the standard hybrid saves $644 compared to the conventional car and reduces CO2 emissions by 18.97 tonnes. The plugin saves $2,481 and reduces emissions by 28.51 tonnes. The all-electric costs $1,663 more, and reduces emissions by 37.06 tonnes, at a cost of $44.87/tonne. (This is about a 73% reduction in total emissions over the period, compared to business as usual.) The Nissan LEAF reduces emissions by 36.94 metric tonnes, a hair less than the the Niro all-electric, but it costs significantly less, saving $7,615 over 12 years compared to the conventional car. (It’s slightly bigger than the Niro, so it’s officially a compact rather than a crossover SUV; it’s primarily cheaper because it has a smaller battery. The EPA estimates its range at 150 miles, compared to the Niro all-electric’s 239.)

(This assumes that there won’t be any significant differences in their resale values after 12 years, and that the other operating costs of these cars are equal. In fact, according to the 2019 AAA edition of “Your Driving Costs: How Much Are You Really Paying”, average maintenance, repair and tires for five typical small SUVs ran 9.09 cents/mile; those for hybrids like the Niro were 7.7 cents/mile and those for electric cars like the BMW i3 and the Nissan LEAF were 6.60 cents/mile. Those annual costs for the small SUVs are $1,084/year; they’re $918 for the hybrids; and they’re $787 for the electrics. Over 12 years that would make the hybrid another $1,989 less expensive than the conventional car; it would make the all-electrics another $1,575 less expensive than the hybrid, and another $3,564 cheaper than the conventional car. (The five small SUVs in the AAA’s estimates are cars like the Toyota RAV4 and the Chevrolet Equinox, which are 8” and a foot longer than the Niro, so they may put more wear on tires and this may overestimate the alternative vehicles’ savings a little…) 

Complications

1. These estimates assume the buyer pays cash. In fact, about 2/3 of the people who buy cars take out a loan, and the AFDC calculator includes the costs of a five year loan at 6% in its estimates. Assuming that the buyer doesn’t have to finance the value of a rebate while waiting to receive it,  that loan adds $3,134 to the costs for the conventional car, and $4,739 for the all electric, so a loan increases the total cost of that compared to the conventional one by another $1,605, and raises the cost of our estimated reductions to $86.35/tonne. (At this point, though, interest rates are at historic lows, and the Costco Auto website says that manufacturers have various zero interest and very low interest financing incentives as well as potential rebates for all these cars. Unfortunately, you have to contact the dealer to find out the exact terms and restrictions on these, and they change all the time, so I haven’t tried to include them in the estimates….)

2. More importantly, these estimates compare the costs and benefits over the estimated life of the car. If someone doesn’t intend to keep the car for that long, the costs and benefits look quite different.

The AFDC calculator includes a graph of how costs accumulate over time. Here’s the one showing its estimates for these cars. (The numbers are somewhat different from mine, because of the local adjustments I’ve made, but the general point is the same.)

New car buyers expect to keep their cars for an average of 8.6 years. It’s
not surprising, but as you can see, after that much time the cumulative
cost of ownership of the cars is still strongly affected by the differences in
their initial prices. The differences in their operating expenses, which make
the more efficient cars relatively cheaper over their lifetimes than the
conventional one, only shift that balance gradually. (Squinting at the graph,
I think their estimate of the cumulative cost of the all-electric is still
roughly $7,000 above the conventional car’s after 9 years.) If those
ongoing savings are reflected in higher prices on the used car market for
the more efficient vehicles, then the efficient cars’ owners may get enough
more than the conventional cars’ owners to make up for their higher
accumulated costs when they sell their cars after eight or nine years, but I
don’t know whether or not that’s likely.

3. As far as the climate is concerned, new car purchases and leases are
most of what matters. (If someone sells a car they already have and buys a
different used car, both cars are still on the road and there aren’t any
change in emissions, unless the two drivers use them significantly
differently.) If someone buys a new car and sells their old one to someone
else who is trading up to that somewhat newer and somewhat more
efficient car, the second person is presumably doing the same thing with a
third person, and at the end of a whole series of purchases and sales,
someone who’s now driving a clunker presumably also upgrades to a
somewhat newer and more efficient car. Thus, total emissions are not just
reduced by the savings from the new car compared to that owner’s
previous one, but also by the savings from the last person’s somewhat
better car compared to the clunker…

Over the past few years, roughly 14% of the households in the country bought or leased a new car or truck. Reducing emissions through more efficient cars requires shifting those new car purchasing and leasing decisions. (Leasing is becoming more popular. According to the Kelley Blue Book, almost 30% of new cars are now acquired on lease. Generally, you have an option to buy the car at the end of the lease, but I don’t know how many people do that, and how many just lease another new car after two or three years.)

4. Buying a used EV does help increase their resale value, and that helps reduce the cost of leasing a new one; buying a new one that you planned to sell after six or eight years might also seem more attractive if resale values were higher… If an EV from a few years ago will meet your driving needs, buying one can also be a very good deal. According to the Kelley Blue Book, the fair purchase price for a 2017 Honda Accord is now $17,739; for a 2017 Nissan LEAF, a car about the same size, it’s $10,978. The LEAF was rated for 107 miles on the battery when it was new. (It’s range will fall if you’re running the heater or the defroster, and it will also gradually decrease over time, though Nissan’s warranty guarantees that the company will maintain its range at at least 75% for 12 years or 100,000 miles. Given the annual savings on fuel and maintenance, and the difference in the purchase prices, you can clearly save a lot of money and reduce your emissions a lot by buying a second-hand LEAF as a commuter car, a second car, or just for local driving.

5. Electric cars have an even larger competitive advantage in the rest of Washington, outside of PSE’s service territory, where electricity is less expensive and the grid is already cleaner. People who work at some state office buildings and at some businesses can charge a car free, which makes an EV a great deal.

Resources

Forth’s Electric Vehicle and Plug-In Hybrid Guides

Plug-In America’s Shopping Assistant
(They don’t provide information about the source of their pricing estimates; though they want your zip code, the website seems to show cars I don’t think are available here, so I doubt its price estimates are local.)

The Sierra Club’s Electric Vehicle Guide

The Sierra Club: Sources & Assumptions

Costco Auto

Alternative Fuels Data Center Vehicle Cost Calculator

Assumptions at https://afdc.energy.gov/calc/cost_calculator_methodology.html

(The Department of Energy has another calculator at http://www.fueleconomy.gov/ which is simpler, but makes some comparisons this one won’t.)

Sources

Average price of Seattle gasoline – $3.26/gallon

Local PSE grid emissions – 1.1 lbs/kWh

Thurston Region 2017 GHG Inventory – Working Draft (October 2019) 

Regional well to wheels gasoline emissions
Derived from the GREET database, via the AFDC Vehicle Cost Calculator

Automobile Purchase Decisions
Report on the Economic Well-Being of U.S. Households in 2015

AAA, 2019 edition – “Your Driving Costs: How Much Are You Really Paying to Drive?”

Kelley Blue Book on leasing

Loan cost calculator

NPV calculator

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