Can you save money driving an electric vehicle?
UBC RESEARCHERS CRUNCH THE NUMBERS
The farther you drive and the longer you own your car are key to determining whether an electric vehicle will save you money compared with a gas vehicle, according to a new study by researchers at the University of B.C.
British Columbians must drive an average of 64 kilometres a day for seven years to make the costs associated with an EV break even with the costs associated with the same model gas car, said Bassam Javed, a sessional instructor and PHD candidate at UBC.
If you drive farther, or keep your car longer, the EV becomes more economical.
While a gas car is cheaper to buy, “every electric kilometre is cheaper than a gas kilometre,” said Javed.
So savings add up over time. “The research helps to show where EVS make sense from a financial point of view,” he said.
While the “break-even” point between EVS and gas cars is 64 km a day in B.C., the numbers vary widely between provinces. In Nunavut, where electricity rates are higher, you would have to drive 181 km each day for an EV to be the cheaper choice. In Ontario, it’s 88 km.
The Hyundai Kona, which has both an EV and gas model, was used for many of the comparisons in the study.
The research took into account both capital costs, like the price of the vehicle and, in the case of EVS, the cost of a charging station minus rebates, as well as operating costs like fuel and maintenance. Calculations were done using average electricity rates, while gas prices were determined using the average monthly fuel prices between September 2021 and August 2022 for each province.
Given that B.C. drivers travel an average of about 34 kilometres a day, according to Statistics Canada, the study found an EV costs about $8,000 more than the same gas car over the average seven-year lifespan of the vehicle.
Far from being discouraged by the economics, Javed said the study reveals some issues to consider as Canada moves toward 100 per cent zero-emission vehicle sales by 2035.
Working from an assumed $500 to $700 monthly budget for car payments, the researcher said a driver can choose between a gas-powered Toyota RAV4 and the smaller electric Kona.
“In popular discourse, we often compare apples to apples,” he said. “If we actually want to meet our targets, we need to see a shift toward smaller, cheaper EVS, otherwise we risk staying right where we are.”
Past research has shown that EVS tend to be more common in affluent neighbourhoods.
An analysis of insurance policies registered with ICBC by Postmedia News found that over half of all electric vehicles on B.C. roads in 2022 were Teslas — and that neighbourhoods on the North Shore, the west side of Vancouver and South Surrey had some of the highest rates of EVS.
There were 2,287 Teslas registered with ICBC in Vancouver’s V6J postal code, which covers Kitsilano and Shaughnessy, the most Teslas of any postal code in the province. The postal code also had the highest rate of registered EVS in the province, at just over one in 10 vehicles.
The median after-tax income in the V6J postal code is $107,000, according to the 2021 census. The 10 postal codes with the highest rate of EV adoption all had median, after-tax incomes of $99,000 or higher.
Teslas are the most popular electric vehicle in B.C., with Nissan coming a distant second. Nissan’s Leaf S-series made up one in every 10 EVS on B.C. roads in 2022.
EV ownership rates in most of B.C.’S rural areas were less than one per cent of all vehicles, according to the ICBC data. In Northern B.C., where EV ownership is the lowest, only 0.1 per cent of vehicles were electric. Even in mid-sized urban centres, like Kamloops and Kelowna, ownership rates were around two per cent.
B.C.’S Zero-emission Vehicle Act calls for 26 per cent of vehicle sales to be zero emission by 2026, 90 per cent by 2030 and 100 per cent by 2035.
A lack of charging infrastructure has been identified as one of the biggest hurdles to full electrification, with people in apartments and strata buildings, as well as those who park on the street, uncertain about how they’ll be able to charge their vehicles.
In a previous interview with Postmedia, Blair Qualey, president of the New Car Dealers Association of B.C., pushed for a more flexible approach to EV targets. He noted the average price of an EV in Canada is $73,000, so there will need to be more incentives to bridge the price gap.
The province’s Clean B.C. EV rebate program gives British Columbians with incomes up to $80,000 a $4,000 rebate for a battery electric vehicle, and $2,000 for a plug-in hybrid. Coupled with the $5,000 federal rebate, middle-income British Columbians looking to purchase an EV could get $9,000 off their purchase. British Columbians who make between $80,000 and $100,000 could also be eligible for a smaller rebate.
The B.C. government’s Go Electric EV Charger Rebate Program for homes, workplaces and multiunit residential buildings was topped up with $7 million last fall. The program provides funding for owners or residents of single-family homes, row homes or duplexes who purchase and install an eligible Level 2 EV charger with a rebate of up to 50 per cent of costs, to a maximum of $350.
For people who live in apartment or townhome complexes, a rebate of up to 50 per cent of costs, to a maximum of $2,000 per charger, could be available. A maximum of $14,000 in rebates is available per complex, with pre-approval required, according to BC Hydro’s website.