Recently, I engaged in a conversation about the cost-effectiveness of electric vehicles (EVs) compared to internal combustion engine (ICE) vehicles with a friend. This discussion prompted me to conduct a detailed analysis of the potential cost savings associated with owning an EV, particularly focusing on fuel savings and overall cost return.
In this article, I will try to explore various aspects of owning EVs versus ICE vehicles, from initial investment to long-term savings.
Key Findings
- Higher Upfront Costs but Lower Operating Costs: EVs tend to cost more at purchase but are cheaper to run over time.
- Break-Even Point: The typical break-even distance for EV buyers is around 140,000 kilometers, which varies based on charging habits and incentives.
- Maintenance: EVs require about 30% less maintenance than ICE vehicles.
- Charging Costs: Home charging is significantly cheaper than public charging options.
- Driving Habits Matter: The financial advantages of EVs heavily depend on individual driving patterns.
Current Market Trends
In 2024, the top-selling vehicles included several electric models. But why are EVs gaining popularity? Are they truly the environmentally friendly option they claim to be?
Most Sold Vehicles in 2024
Current market distribution of passenger vehicles based on full-year sales data
In my calculations below, I conclude that it is cheaper to buy an EV in the long run compared to a conventional vehicle, assuming you don’t have battery problems.
Cost Comparison: EVs vs. ICE Vehicles
Initial Investment
The price gap between EVs and ICE vehicles continues to narrow but still presents a significant difference:
- Average Mid-Range EV Cost: €45,000
- Average Mid-Range ICE Cost: €32,000
- Price Difference: €13,000
Cost Comparison of Running an EV vs. ICE Vehicle per 100km
Cost comparison of running an EV vs ICE vehicle per 100km
Electric Vehicle Costs
Using current European average electricity rates (€0.1867 per kWh) for a typical mid-size EV:
Notes:
- Consumption varies from 15–22 kWh/100km depending on driving conditions.
- Home charging rates can be significantly lower (€0.15–0.20/kWh).
- Night tariffs can reduce costs by 40% to 60%.
Traditional Vehicle Costs
Using current European fuel prices (€1.80/L) for a comparable ICE vehicle:
Notes:
- Consumption varies from 6–8 L/100km based on driving conditions.
- Urban driving typically increases consumption by 15% to 20%.
- Current fuel prices fluctuate significantly by region.
Long-Term Cost Analysis (100,000 Kilometers)
Total Cost for ICE Vehicle:
Break-Even Analysis
The break-even distance can be calculated as:
Where:
EV vs. ICE Vehicle Cost Comparison Over Distance
Break-even analysis showing total costs including purchase price and running expenses
For most users, the break-even point typically hovers between 150,000 and 200,000 km, assuming primarily home charging. However, with government incentives and optimized charging practices, this could drop to between 100,000 and 120,000 km.
Maintenance Costs
EVs typically require 30% less maintenance than their ICE counterparts. In terms of cost:
- Annual servicing for an EV in Croatia costs around €100, compared to €300 for an ICE vehicle (Croatian Auto Association, 2023).
Long-Term Savings Comparison Example (10 Years)
| Vehicle | Initial Cost (€) | Running Cost (€) | Total Cost (€) |
|---|---|---|---|
| Renault Zoe (EV) | 40,000 | 1,800 | 41,800 |
| Renault Clio (ICE) | 30,000 | 7,800 | 37,800 |
Total Cost of Ownership Comparison
Cumulative costs for EV vs ICE vehicles over a 10-year period
Real-World Cost Comparisons
Case 1: Luxury Segment Comparison - BMW i4 e40 vs BMW 430i
In this analysis, we will compare two vehicles with identical body styles but different powertrains:
- BMW i4 e40 (Electric Vehicle): Base Price $57,100
- BMW 430i (Internal Combustion Engine): Base Price $47,600
We will look at the annual fuel costs for both vehicles based on an annual travel distance of 12,000 miles.
Annual Fuel Costs:
For the BMW 430i, we can calculate the annual fuel costs as follows:
On the other hand, for the BMW i4 e40, the annual electricity cost is calculated like this:
Break-even Analysis:
To determine the time required to break even on the price difference based on fuel savings, we use the formula:
This calculation indicates that, assuming no maintenance costs are incurred and with a fuel price difference of $9,500, it would take about 5.3 years to break even on fuel savings alone.
BMW i4 e40 (EV) vs BMW 430i (ICE) Total Cost of Ownership
Comparison of cumulative costs including purchase price, fuel/electricity, and maintenance over 9 years. Break-even occurs at 5.3 years.
However, when factoring in regular maintenance, particularly for the 430i, we must account for oil changes. With two oil changes needed per year at an average cost of $100 each, the additional expense shortens the break-even period by approximately 0.5 years. While I lack precise data on the complete scheduled maintenance for the 430i, we can assume that the i4 will incur fewer maintenance costs due to its nature as an electric vehicle, which requires less frequent servicing.
Moreover, traditional internal combustion engine (ICE) components tend to wear out more rapidly as mileage accumulates, further amplifying the longevity and cost-effectiveness of the EV when considering overall ownership costs.
Maintenance Cost Comparison
Consumer Reports conducted a comprehensive survey assessing the costs associated with battery electric vehicles (BEVs), plug-in hybrid electric vehicles (PHEVs), and ICE vehicles over an extensive mileage period. Their findings confirm that BEVs and PHEVs typically incur maintenance costs that are approximately half that of ICE vehicles over the first 200,000 miles.
Charging costs also vary considerably and depend on local electric rates. For example, my own experience with a PHEV shows that home-charged electric miles generally cost between one-third and one-half of the price of gas miles. Public Level 2 (L2) charging stations may be free if government-owned, whereas privately owned stations often charge rates comparable to those of gasoline.
Moreover, BEVs utilizing fast chargers during road trips may incur costs slightly higher than gas per mile. These expenses are highly variable based on network, location, and time of day.
For those seeking economical options, a used hybrid electric vehicle (HEV) often emerges as the most cost-effective choice. Fully subsidized models like the Tesla Model 3 or Chevy Bolt, or a used Nissan Leaf, can also serve as affordable alternatives if they align with your requirements.
Next, we explore the cost per mile associated with different charging methods compared to gasoline vehicles:
Cost per Mile Comparison
Comparison of cost per mile among home-charged PHEVs, public charging, fast charging, and ICE vehicles.
Conclusion
In conclusion, electric vehicles (EVs) are a smart choice for those seeking long-term savings, despite their higher upfront costs. They offer significant reductions in fuel and maintenance expenses, making it easier to recover that initial investment over time. With the break-even point typically falling around 140,000 to 200,000 kilometers, drivers who accumulate mileage can see real financial benefits.
As charging infrastructure continues to improve and incentives make EVs more accessible, they’re becoming a practical choice as well as a greener option. For many, switching to an EV means saving money while contributing positively to the planet. If you’re considering the switch, now could be a great time to embrace the future of driving.