I recently got my first electric vehicle.It was quite the process, which I chronicle in two parts (linked below). Part of the process, of course, is comparing the costs of internal combustion engine cars, or ICE vs EV.
In this article, I’ll walk you through the basic cost comparison with the caveat that these estimates are based on my journey from ICE to EV. Each driver’s circumstances will vary depending on the age the ICE car they’re trading in, whether they’re buying or leasing their EV, whether the EV they’re buying is new or used, and countless other variables.
Total Cost of Ownership
The economics of owning an electric vehicle are, of course, very different from those of a traditional ICE car. A concept that we need to keep in mind is that of Total Cost of Ownership or (TCO). While its true that electric vehicles are currently more expensive to buy than traditional ICE vehicles, they cost considerably less to run.
So we have to “train” ourselves to think differently to the way car owners have thought for the last 100 years.
Since this is a leased vehicle, I think it’s best to look at the costs in terms of monthly expenses rather than one-time expenses and extrapolate those expenses over the three-year term of the lease where applicable. It gives more of an apples-to-apples comparison.
And since I’ve essentially traded my ICE VW Passat for an electric VW ID.4, it makes sense to compare the cost of owning/leasing both of those two vehicles.
The ID.4 Pro RWD that I ended up getting was valued at $45,383. Monthly payments on a 3-year lease work out at $591 (with a little extra insurance in case I damage any of the very expensive wheels, which my wife frequently reminds me I’ve been known to do on previous cars I’ve owned).
That compares with $311 that I was previously paying each month to finance the Passat. So I’ve taken on an additional $280 in car monthly payments by switching to the ID.4.
And let’s not discount the fact that those monthly payments I used to make on the Passat would eventually lead to full ownership. I financed the car on a 72 month loan that I’m about halfway through paying off.
That means that by the time the lease on the ID.4 is up I could have been the proud owner of a 9-year-old Passat. I’ll never own the ID.4. The value of that Passat in three years time: Around $8,000, which I could have realized by either trading it in or driving it for several more years.
So between the lower monthly payment, and the ownership, I have to say that represents a big win for the Passat. ICE 1, EV Nil.
Offset against the car payments is the savings in fueling costs. I was filling the Passat up with gas twice a week at about $50-$60 each time. Obviously, that cost fluctuates with the cost of gasoline, which at the time of writing is about $3.80/gallon.
Let’s call it $110 per week or $450 per month.
Theoretically, I could charge the ID.4 for free if I wanted to. I have access to Electrify America’s charging network for free for the 3 years of the lease. It’s not ideal because the nearest station is twelve miles away, and constantly charging at level 3 chargers isn’t good for the longevity of the battery.
That said, there are also a handful of level 2 chargers around town, one at my local supermarket just a mile away from my home and another in a commuter lot close to where I work. Both of these are free to use (for now, at least).
But one of the great advantages of an EV is the convenience of charging it at home so I spent $1,050 installing a home charging station. (30% of that will come back in the form of rebates).
If I do half of my charging at home and the other half at various free charging stations around town, I estimate that I’ll spend about $100/month in increased electricity bills. That’s a savings of $350/month or $12,600 over the 3-year life of the lease.
That’s a big win for the ID.4. ICE 1 EV 1.
Oil Changes: The Passat needs an oil change every 6,000 and uses a synthetic oil that is more expensive than regular motor oil. It costs around $125 each time and, if I drive 15,000 miles a year for three years it would have to be done 7 or 8 times over a three-year time span.
That’s about $950 over three years. Electric vehicles don’t need oil changes.
Brakes: EVs don’t wear through brake pads the way traditional ICE vehicles do because of their regenerative braking technology. That said, it’s a benefit that is very difficult to quantify, much less put a dollar figure on. The last time I had my brakes done on the Passat, it cost a little under $300.
Assume I’ll need to have the brakes done twice in a typical 3-year span for an ICE vehicle and only once for an EV. A non-scientific estimate, I’ll admit, but it’s the best I can do for now.
General Repairs and Maintenance: Quite apart from the EV technology, there’s no getting away from the fact that the Passat is a 6-year-old car for which I’m 100% responsible for repairs and maintenance, while the ID.4 is a brand new leased car for which the dealership is largely responsible for them.
Again, it’s very difficult to quantify. The Passat has been a great reliable car for me over 12 years, two vehicles and well over 300,000 miles of driving. The ID.4 is relatively untested technology that might end up giving me no end of trouble.
These situations are often specific to individual cars and there’s just no way of knowing just yet. Sometimes you get a great one and other times you get stuck with a lemon.
I’m going to assume that the Passat would cost me around $1,000/year in general repairs, so $3,000 in total. Plus $1,250 savings from the oil changes and brakes. Let’s say $4,250.
That down as a win for the ID.4. ICE 1 EV 2.
Total cost of ownership over three years is $1,230 more for the ID.4 than for the Passat (your results may differ).
Will my EV Save the Planet?
We currently drive about 25,000 gasoline-powered miles per year between both vehicles. My job accounts for the lion’s share of that mileage, around 20,000. The aim is to replace 15,000 (or 60%) of those miles with electric-powered miles, since that is the number of miles that are allowed under the terms of the lease.
That means I can’t just use the EV for work without going way over the mileage and having to pay a lot for that excess usage when I return the vehicle at the end of lease.
A Real Two-Car Family
That means a slight shift in the way we view our cars. Traditionally, although we both consider both cars to be ours, the reality has always been that one is thought of as mine and the other (the one with lipstick in the wells) is considered hers. I suspect that most two-car suburban families operate this way.
With the switch to electric, we’ll both share both vehicles more equitably based on what journeys each of us are planning to take. I’ll take the EV for most of my routine work trips but take the ICE when I have longer journeys into Boston.
Karen, who works from home, will take the EV for short trips to the gym and to run errands around town but will use the ICE when she visits her sister on the other side of the state.
In essence, we’ll become a real two-car family, rather than a two-car family that really operates like two single car individuals that just happen to live under the same roof.
Just because we’ve switched 60% of our driving to electric doesn’t mean that we’ll be lowering our transportation emissions by 60%. That’s because initially we’ll be charging our EV from the grid and, at the time of writing, only about 25% of the electricity on the New England grid is generated from renewables.
So we’ve actually reduced our driving emissions by about 15%.
And this is the knock that EV skeptics have always used. Why drive an EV when you’re just going to charge it with fossil-fuel generated power?
There are two reasons. First is the fact that the percentage of renewable energy on the grid is growing year-by-year. There are already laws on the books in Massachusestts mandating it.
While a gas-powered car will always be powered 100% by fossil fuels, an EV acquired in 2023 will be 25% powered by renewable energy now, and by a much larger percentage over time.
The second reason is that, in time, I’ll be adding solar panels to the house and start charging the car from those. That will greatly increase the percentage of renewable energy used to power the car, possibly all the way up to 100%.
A few months of charging the car at home will give me a pretty good idea of how many panels I would need to add in order to cover that increased usage.
Final Thoughts on the Cost of ICE vs EV
For me, the cost of leasing my VW ID.4 for three years is going to be higher than the cost of keeping and continuing to pay off my ICE VW Passat, but not much higher.
And more to the point, what I’ve included as costs for me are not necessarily going to be the same for everyone. For me, the difference between my ICE car payment and the EV was almost double. For someone switching from a leased BMW to the same ID.4 might end up paying much the same.
We’ll learn a lot more about what it costs to own and drive an EV over the coming months and, since we still own a gasoline-powered car in addition to our ID.4 we’ll be well placed to continue comparing the costs of owning an ICE vs EV. I’ll be sure to post what we learn in future posts. Stay tuned.