A new study from the University of Michigan School for Environment and Sustainability has found that EVs are cost-competitive with their ICE equivalents in 14 major US cities, due to factors including charging cost advantages for EVs over gasoline fuelling and cheaper maintenance and repair.
But the bottom line of the research is that the way an EV owner charges up — primarily how often the EV can be charged at home — determines whether or not EVs end up more affordable over a vehicle's lifetime than a similar ICE car.
Outside of the the 14 major markets, the researchers conclude that whether or not an EV will break even with a similar gas-fuelled vehicle depends on where the vehicle is operated, how the vehicle is charged and driven, and the size and range of the vehicle.
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But the report's most striking finding is the impact that varying charging behaviour by EV owners has on total cost of ownership (TCO) benefits of EVs over ICE vehicles in the same market segment.
Home charging access reduces the lifetime cost by approximately $10,000 on average, and up to $26,000” compared to EV owners without access to home charging, the report finds. This means that the base case — in which an EV owner charges at home 80pc of the time and at public chargers 20pc of the time — flips the TCO advantage to EVs over ICE vehicles in eight of the 14 cities surveyed, even when accounting for the cost of installing home chargers.
Despite federal and state subsidies in place for the installation of home charging, it still faces some challenges, particularly in the case of multi-family dwellings like apartment blocks.
“There should be an increased focus on making home charging accessible. Our results show that without home charging access, a BEV will typically not achieve cost parity. Bringing home charging to renters and those in multi-family dwellings is essential to ensuring the transition to electrified transportation is equitable,” the report finds.
While charging behaviour is the primary variable to EV cost savings over ICE, different market segments also show differing levels of cost competition between powertrains.
Despite general TCO parity emerging between EV and ICE, the report adds the caveat that “the longest-range models (400-mile range) generally are not yet cost competitive with gasoline vehicles, even with subsidies”.
The finding that larger BEVs, including SUVs and pickup trucks, currently require subsidies to become cost competitive comes days after US OEM Ford hiked the price of its flagship electric pickup the F-150 Lightning amid sluggish sales growth. Fellow Detroit OEM GM also saw several of its heavyweight e-SUVs lose eligibility for Inflation Reduction Act tax credits at the beginning of January.
The type of tax break offered by state and local incentives was also found to have a higher impact on EVs' attractiveness to consumers than the face value of the tax credit. That said, the researchers citing a report that dates all the way back to 2011 showing sales tax waivers to be 10 times more impactful than income tax credits.
Ciaran has written about finance, politics and culture. He is passionate about e-mobility and what it means for our way of life.
Ciaran has a Masters in Ancient Philosophy from Oxford University.
