I have now owned my new Nissan Leaf electric vehicle (EV) for exactly one month. Assuming one month’s data is enough to make a reasonable estimate of the costs (and savings) that I am incurring, I am pleasantly surprised at how cheap it is to own an EV.
To begin, I sold my seven-year-old (completely paid-for) Volvo station wagon before getting the Leaf, so my basic economic analysis will compare getting the Leaf to keeping the Volvo. Also, I chose to lease the Leaf for 39 months, so I’m only going to make the calculations for that case.
Cash Up Front: I sold the Volvo for $7,000, so that was my working capital. The down payment, tax, tags, and license for the Leaf was $5,350. I am also in the processes of installing a 220V charger (the Leaf comes with a 110V charger, which has been working just fine, but I want the faster charging) at an estimated cost of $2,000. Thus my estimated out-of-pocket cost is about $350.
Cost of Driving the Volvo: I had been averaging about 16 – 18 mpg for my normal (mostly city) driving with the Volvo. At the current pump price of $3.60/gallon (I buy low-octane gas), this gives $0.20 – $0.22/mile operating cost. Maintenance costs are hard to estimate, but assuming nothing major were to happen with the Volvo over the coming three years, I’d probably spend $250/year on just the standard maintenance (oil changes and filters and the like). This adds another $0.025/mile, so I’ll just say $0.235/mile as my working figure. Obviously, I’m purposely ignoring the reliability difference between a new car and a 7-year-old car here, since I really only want to compare a gas car to an EV, not an old car to a new one. Another way to look at it: I doubt the residual value of the Volvo after driving it for another 39 months would equal the major maintenance costs I would likely incur during that time.
Cost of Driving the Leaf: In my first month, I drove 790 miles, and averaged 3.5 miles/kWh. In Austin, the cost of electricity is currently $0.129/kWh. This makes the electricity cost per mile = $0.036/mi. There are no maintenance costs on the Leaf until the 36 month scheduled maintenance, and in particular there are no oil changes.
Cost Savings: Comparing the per mile costs, I am saving about 20¢/mile driving the Leaf over the Volvo. For my 790 mile month, that translates into $158 (money that I am not spending at the gas pump and for oil changes).
Net Cost of the Leaf: My 39 month lease has a monthly payment of $291. Subtracting the net $158 savings, my actual cost of switching to a brand new EV is $133/month. Thus, my total net costs are:
Frankly, I’m shocked at how cheap that is. I can’t think of many new cars I could buy/lease for that price. Now add this to the fact that driving the Leaf is really, really cool and really, really fun. It has been a very good choice for me.
A Hypothetical Case: Suppose instead one were driving an SUV that got 13 mpg, and you drove a little more – 33 miles per day (1000 miles/month). Assuming all other numbers presented above were valid, you would actually SAVE $10/month by leasing the Leaf. Of course, if the price of gas goes up, the economics become even more compelling.
So there you have it. The Leaf makes a lot of sense. Of course, it assumes that you are a two-car family with a lot of short-hop city driving (where an EV excels). But that is probably a majority of car owners.
I only have one car in the US, also a Volvo, and most of my mileage is out in the desert, so for me an EUV, err, EV doesn’t make much sense, economically. I’d also worry about all the coal, lithium and neodymium it is consuming rather inefficiently (well hidden).
If I’m ever unfortunate enough to be in a car crash, I’d also prefer to be in my Volvo.
I do, however, have an electric bike, which I commute to work on in the winter, when it’s not too hot. So I am saving the planet – lets hope the cars avoid me…
Curiously, does you lease have a mileage limits? If so, then in some instances this option may not be practical. if using your same assumptions in the case of the SUV, but driving 1500 miles/month and purchasing the Leaf with a total TTL of say $40k with a 4% note for 60 months, this translates into a monthly payment on the order of $735. The gas – electric savings would be ~$360/month so the actual cost would be on the order of $375. Still very respectable all things considered… (assuming of course my math is accurate…)
Curiously, does you lease have a mileage limits? If so, then in some instances this option may not be practical. if using your same assumptions in the case of the SUV, but driving 1500 miles/month and purchasing the Leaf with a total TTL of say $40k with a 4% note for 60 months, this translates into a monthly payment on the order of $735. The gas – electric savings would be ~$360/month so the actual cost would be on the order of $375. Still very respectable all things considered… (assuming of course my math is accurate…)
what happens when you have to renew your lease at the end of 39 months? you will not have a volvo to sell to make up for the downpayment..
To David’s point, the Leaf EV is definitely a city car. It has a 100 mile range, but you never want to take it down to zero. So the practical range is 80 miles. But that range estimate assumes stop-and-go traffic (it gets less "mileage" on the highway).
To Bryan’s question, there is a mileage limit on the lease, but it is 15K miles per year – twice what I am likely to use. To Stuart’s question, I wouldn’t have the Volvo in 39 months either (it’s value by then would be close to zero). At the end of the lease, I have the option to purchase my Leaf for $16K, or turn it in.
Chris I am curious how your Leaf is working out since your last post? I recently got a quote for doing solar PV on my home and I remember this discussion, so I thought I would come back to this post. I was offered a 100% pre-payment 20-year solar PV lease for about $10,000 for a ~3.9kW system. If I bought the system outright would cost me more – but the lease sounds better as I am guaranteed performance form the company (the 100% pre-pay means I dont have to make any monthly lease payments for the solar system). With EV in my utility I can shift to a different rate plan – allows me to buy day time power at 30-50c/kWh and night time at 3-5c/kWh, I guess it would be 1c/mile. Assuming 10,000 miles/year – would be $100 for gas (vs $2500/year for my wife’s SUV which we were thinking of selling for this). The PV system produces enough power to offset 100% of my non-EV electricity consumption, so that saves another $1200 per year. So total savings are $3600 per year. The out of pocket is $33k for leaf (not thinking of the lease option) minus resale of the SUV (probably gets $16.5k) + $10k for solar = $27k. That is 13.3% rate of return – which is way better what I can get anywhere else. I am not sure if I am missing something, but I am seriously considering doing both..