The 2008 crisis led to some sky-high gasoline prices. This isn’t a really big deal until you realize that the years prior had some really low gas prices. People went and loaded up on big, non-fuel-efficient vehicles so when gas prices skyrocketed they were caught with their pants down. Like “Wow, my Chevy Suburban costs $75 to fill up? What?!” I remember clearly that used Geo Metros suddenly became popular and demand went up because they got like 45 mpg or something like that.
But what does this have to do with today?
If you drive a gas vehicle you’ve probably noticed that gas is damn cheap once again. I filled our crappy Dodge Caravan up and was surprised to see gas at $1.95 per gallon. This is in Northern Illinois so other’s gas prices may vary, but that is really cheap! I don’t know the macro-economic or political reasons that gas is so cheap (other than supply is probably too high) but this reminds me of 2008 slightly. With gas cheap, consumers and auto makers think similar things. The consumer thinks “This big SUV isn’t that much to operate; gas is cheap!” while the auto makers think “We should focus on SUVs and trucks because they’re high-margin products and demand is up!” Take a look at Ford who is not going to make cars anymore or Chevy who is axing the fairly popular Volt. The reasons behind these changes are curiously similar to 2007/2008: gas is cheap, demand is high on SUVs, crossovers, and trucks, while demand and margin is low on cars. While this makes sense economically in the short-term, it seems like a bad choice in the long-term for both people buying the vehicles and the automakers who needs to refit plants and assembly lines. This seems even more apparently when you look at what happened in 2007/2008. Like we’ve been here before guys…
I got off topic a little bit because my main point was to ask (and answer) the question of how the costs of an EV and a gas vehicle work out with record low fuel prices. Even if gas is really cheap, is it still cost-effective to drive an EV instead?
First off, we already know the cost to operate my Ford Focus EV from this post. I also have current data that still shows the car costs around $0.07-0.08 per mile to operate. This winter has been warm so the actual value might be a little lower but let’s call the cost to operate a nice seven cents per mile.
Now our van, the shitty Dodge Caravan, gets around 14 miles per gallon. I’m assuming this is similar to other large vehicles out there. We can’t jump directly to cost using past data because the variable here is the price of the fuel. But since gas is about $1.90 per gallon and miles per gallon is 14, the cost per mile is simply 1.9/14 or $0.13 per mile — twice that of the electric car. Even if gas is cheap, the van still costs twice as much to operate!
To find the break even price — the price gas needs to be for the van to be comparable in cost to the Focus EV — we just do the math backwards: $0.07*14 = $0.98. Gasoline needs to be around a dollar per gallon for the Dodge to cost as much to drive as the EV. This will probably never happen.
We still have our derelict Saturn SL2 sitting around without insurance that is technically still driveable. All I’d have to do is reinstall the battery
and it’ll run, even if it isn’t actually legal to drive it. This car from this post gets about 25 mpg in the winter and doing the same math as before gives a cost to operate of $0.075 per mile; this is right in line with what the EV Focus costs to operate. Since these two cars cost the same to drive, to discover what is really the “best car” to drive in terms of price you’d have to total up anything else you could think of to find the winner. In this case the Saturn doesn’t have insurance and I’d have to install a battery. Even if I own the battery installing it when it is 15 degrees outside wouldn’t be pleasant! All other things considered the Focus is still a better choice because the car is 1. Insured, 2. Actually works, 3. Isn’t loud as hell (the Saturn has a broken exhaust), and 4. Has a bluetooth stereo so I can listen to music. Oh, the turn signals also don’t work which especially isn’t good if you don’t have insurance. The cost of being pulled over and fined should be taken into account!
I’m actually surprised the Saturn has a comparable cost to operate. Even if I know that lower gas prices make gas vehicles cheaper to drive, I didn’t think current gas levels were anywhere near a break even point given how cheap EVs are to operate. But apparently we are at that level at least in regards to driving shitty 1.9L Saturn SL2s from 1997. Any vehicle with a larger engine or higher weight — like the Dodge Caravan — is still much more expensive to drive. If gas did get notably lower I might actually bust out the SL2 but until then the Focus still wins on cost!