Summer’s almost over, and with just one last major holiday lined up before the season’s unofficially over, something peculiar came to mind while I was test driving a Honda Prologue over the weekend. Gas prices were strangely lower than what they were earlier this summer heading into Memorial Day weekend. In fact, I saw my local Costco advertising unleaded gasoline for $2.99/gallon.
As much as I’m delighted by how gas prices haven’t been outrageous this summer, the national average is sitting around $3.50/gallon according to tracker website YCharts. That’s still more than what I’d like to pay and gives me more reason about potentially buying an EV. However, what’s also interesting is the year-over-year average cost for gasoline, which according to the U.S. Energy Information Administration, shows lower costs this year than what they were in 2023. All of this got me thinking about the long term savings I’d get with an EV over a traditional ICE (internal combustion engine) vehicle.
This debate isn’t new at all, but I know that the biggest savings for the best electric cars comes from charging at home — as opposed to doing it at a charging station. With my Google Pixel 9 Pro XL, I asked Google Gemini to create the ultimate EV savings cheat sheet for me to definitely find out if I’d end up saving more over a traditional gas-powered vehicle. Here’s what I found out.
The only EV I could realistically afford
One of the biggest holdups for increased adoption for electric vehicles is that they are obscenely expensive. Cost continues to be the biggest reason why U.S. car shoppers are still reluctant about buying an EV for their next purchase, with a $56,520 average price for EVs in July 2024 according to Kelly Blue Book.
Out of all the EVs I’ve tested this year, I can realistically afford to buy the Hyundai Kona Electric without any special incentives or tax saving rebates. At $32,875 for the base SE trim, it’s a substantial savings over the national average — plus, there’s the gas-powered equivalent of the Kona at $24,350. In my Hyundai Kona Electric test drive, I mentioned how it’s one of the best EV values yet because of its outstanding efficiency despite its short range
Using the Kona as a comparison, I then asked Google Gemini on my Pixel 9 Pro XL to create a savings cheat sheet for the two types of vehicles.
Google Gemini creates the ultimate EV savings cheat sheet
First and foremost, I have to determine all the parameters I need in order to find the true cost of owning a vehicle — so I settled on 10 years for this cheat sheet calculator and a mileage of 1,000 miles per month. From there, I asked Google Gemini to create me a formula to determine the cost of ownership of a car over 10 years with a set fuel economy and travels 1,000 miles per month. After a few seconds, it came back with the results and I couldn’t believe what it gave me.
Total Cost of Ownership = Initial Cost + Fuel Cost + Maintenance & Repairs + Insurance + Registration & Taxes + Depreciation
I only gave Gemini a couple of parameters to bear in mind, yet it returned much more to give me a better overview of a vehicle’s true cost of ownership. From the formula above, Google Gemini was also mindful about including fuel, insurance, registration, and other costs I didn’t think about. But what really impresses me most about the artificial intelligence of Gemini is how it breaks it down to the two respective vehicles.
Since there are totally different parameters for EVs, Gemini intelligently knew what they were and automatically added them into its formula. Here’s the breakdown for each:
- For a gas car:
- Annual Fuel Cost = (Annual Mileage / Fuel Economy) * Average Gas Price
- Total Fuel Cost = Σ (Annual Fuel Cost * (1 + Annual Gas Price Increase)^Year), where Year ranges from 0 to 9
- For an electric car:
- Annual Electricity Cost = (Annual Mileage / Efficiency) * Electricity Price
- Total Electricity Cost = Σ (Annual Electricity Cost * (1 + Annual Electricity Price Increase)^Year), where Year ranges from 0 to 9
From there, I finally gave Google Gemini the details about the gas-powered and all-electric versions of the Kona — including their estimated fuel economies and starting prices.
- The true cost of ownership for the gas-powered car over 10 years is approximately $51,473.
- Initial cost of the car: $24,350
- Total fuel cost over 10 years with a 3% annual increase in gas prices: $17,123
- Maintenance and repairs over 10 years: $5,000
- Insurance over 10 years: $12,000
- Registration and taxes over 10 years: $3,000
- Estimated resale value after 10 years (assuming 40% depreciation): $9,740
- The true cost of ownership for the electric vehicle over 10 years is approximately $42,688.87.
- Initial cost of the car: $32,875
- Total electricity cost over 10 years with a 2% annual increase in electricity prices: $6,513.87
- Maintenance and repairs over 10 years: $3,000 (assuming lower maintenance costs for electric vehicles)
- Insurance over 10 years: $12,000
- Registration and taxes over 10 years: $3,000
- Estimated resale value after 10 years (assuming 40% depreciation): $13,150
You pay more outright, but Gemini says EVs have bigger savings
Despite costing more upfront, Google Gemini calculates more savings in the long run with the Hyundai Kona Electric: $42,688.87 versus $51,473 for the gas-powered Kona. Of course, there are two specific data points I want to call out that could have the biggest impact on these numbers. They include the annual increase in gas and electricity rates, along with how well they’ll maintain their efficiencies.
Starting with the former, there could be a time when electric rates get a spike to coincide with more people buying and using EVs. This formula also doesn’t factor in the higher costs EV drivers are forced to spend when charging at a station as opposed to home. And secondly, the formulas don’t factor how vehicles often have lower efficiencies over time — like my 15 year old sedan, which was getting upwards of 38 mpg initially and now it’s under 30 mpg.
Either way, EVs do present greater savings in the long run just as long as you can withstanding paying for their higher costs. I also want to point out there are still ways for drivers to get free EV charging if they look around hard enough, as well as other sustainable charging solutions that involve solar power.
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