Twice in the past six months, the media have gotten carried away with stories portraying electric vehicles as unreservedly bad for the environment. They were based on research showing that EVs have a more significant impact than often assumed, but there are a lot of pluses and minuses to tally when assessing the cars. And reporters, intentionally or unintentionally, usually don’t take all of them into consideration.
That goes for economic as well as environmental factors, apparently. In early October, a Los Angeles Times columnist, Dan Turner, learned the hard way that evaluating the merits of EVs is harder than seems at first glance when he penned an op-ed wondering whether buying an EV is worth it “when you consider all the costs of owning and operating a new car in this environment of soaring gas prices.”
Using a tool at the US Department of Energy’s Alternative Fuels Data Center that allows people to look up the annual fuel cost, operating cost per mile, and cumulative ownership cost of various vehicles, Turner compared the all-electric Nissan Leaf to “seven other popular 2012 gas-powered models, including the hybrid Toyota Prius, given current local electricity prices and figuring the average current price of gas at $4.75 a gallon.” He found that while the operating cost of the Leaf was significantly lower than for all the others, because of its high up-front cost, some gas-powered models would be cheaper over their lifetime. “But wait!” a corrective paragraph inserted into the column a day later read:
Astute reader tfisher points out that this analysis doesn’t factor in the $7,500 federal tax credit offered for the Leaf and other all-electric vehicles. Plug that in, and electrics start to look a great deal more attractive. In fact, after six years of ownership, cumulative costs are better for the Leaf than any other car on my list. The only caveat is that not all buyers will get the full credit, because you can’t collect more in tax credits than you pay in income taxes. So if you only owe the IRS $4,000 in the year you buy your Leaf, you’ll only get a $4,000 tax credit — you don’t get the remaining $3,500 off next year’s taxes. Still, if you’re buying a Leaf you probably have at least one other vehicle for longer trips, and most buyers are probably well-off enough to collect the full credit.
In addition to that insertion, the Times deleted the final paragraph of Turner’s post, which asserted that “gas-powered economy cars were often a better deal than electric cars.” That didn’t quite cover it, though, and three days later Turner wrote a second column that made two more corrections. Besides the $7,500 federal tax credit, he had failed to account for a $2,500 direct rebate from the state of California, and he had confused fuel cost per mile with operating cost per mile. So Turner re-ran the numbers, accounting for the two incentives and using $4.50 per gallon of gas instead of $4.75 as he had the first time around “because pump prices seem to be heading downward.” He found that:
The annual fuel cost comes to just $524 for the Leaf, based on L.A. electricity prices (note that this doesn’t take into consideration the incentive programs offered by some utilities, nor the fact that some EV owners have installed solar panels on their roofs). That’s half as much as the Prius, at $1,089, and less than a quarter the price of my list’s biggest loser, the 328i, at $2,390. Meanwhile, in terms of cumulative ownership costs, the Leaf is pretty much even with the Mini, Focus, Prius and Civic until after five years, when it starts to surpass them all. After 10 years, the Leaf’s cumulative ownership cost is roughly $5,000 less than the Prius’.
“So, in review, what have we learned?” Turner asked at the end of his post:
Electric cars, after you factor in government incentives, make as much economic sense as environmental sense. If those incentives go away—and I have grave concerns about what would happen under a Romney administration and a Republican Congress—that would change dramatically.
Nissan makes a very economical EV.
You should never write blog posts about electric vehicles unless you’re wearing asbestos undershorts. Flamers, fire away.
Indeed, you have to give Turner credit for owning up to his mistakes and doing all that he could to correct the record. But it’s harder to counteract a misunderstanding (especially one that was echoed by other outlets) than it is to create one, so the importance of taking one’s time and getting it right the first time should also be a lesson here.