Someone was wrong on the Internet the other day, and I was determined to fix that. The question at hand was "why don't cargo ships run on electricity?" And short answer is: because they can't.
But that led to some questions about the economics of electric cars, right here, right now. Because in the midst of trying to prove that EVs were still a non-economic choice, I ran the numbers, and it turns out I'm right! But only barely.
As a zeroth point, prices matter. Lots of prices. My analysis assumes no value for Electric Smugness or Saving the Earth (though it will be useful to those of you who value those things, because I can put a price on how much they will cost you). My analysis is based on my very local cost of gasoline, where it's about C$1.20/l. If your local cost of gas is lower (the US, Venezuela) an EV won't make any sense at all. If your local cost of gas is higher (most of Europe), the EV is more compelling. And there's a twist ending regarding fuelling costs, so read on. EVs also have cash-on-purchase subsidies from the BC government, and so on...just keep in mind that this analysis is very dependent on the place and time it was done for, though my math may help you with figuring out your situation.
Nissan vs. Nissan
At present, TLO & I own a 2007 Nissan Versa. It is a boringly effective tool for dispatching 15,000 km of driving each year, and thus I love it. We paid cash for it in early 2011. I would guess it would sell for about $5500 today.
For comparison, my benchmark electric vehicle was a Nissan Leaf. The Leaf has two valuable attributes in this comparison: it's very close to being an electric Versa, and it's probably the best balance of price and performance in the Canadian EV market (which I will herewith dispatch for you: Smart EV, small; Mitsubishi iMiEV, available with such a heavy discount it's almost worth considering, but it's a wretched thing compared to the Leaf; Chevrolet Volt, more expensive (and for better or worse, not a pure EV, though you can get close with some driving patterns); Tesla, fantastic, and fantastically expensive. There are other EVs which may come to Canada soon, and may be competitive, but none is going to trounce the Leaf (the Fiat 500 EV and Chevy Spark EV may be very interesting, though).
A Leaf costs, well, it's important! I did a first-cut estimate in which I assumed MSRP for the base Leaf ($31,798, excluding tax, PDI, and so forth, but also not including Nissan's considerable current incentives, or the $5000 the BC government will give you for buying an EV). It also turns out Vancity offers Prime+1 financing for EVs, which is not bad.
If I apply all the incentives, and I trade in my car, (and let's assume I negotiate well enough to cover the taxes, which is ambitious), I'd owe $20000, and my payments could be $4400 a year on a 5-year term. I assume my electricity cost will be about $200/year, and that's an estimate that assumes I don't mooch free charging whenever I go out (which I would).
That compares to an operating gas/oil cost of about $1900/year for the current car, based on our mileage and the car's fuel economy (usefully close to 10L/100 km).
5 years from now, the Versa will be worth about $1500, the Leaf will be worth about $10000 (that latter based on Nissan's lease calculations). If that holds, and if you assume no repair costs for either car (that's a pretty big assumption!), then keeping the Versa costs less than driving a Leaf. The difference is about $1200/year.
So for me, in my situation, that's the cost of, you pick: new car smell, smugness, saving the earth, whatever. That is about what it would cost to buy and operate a new EV over the price of keeping my well-used but very usable Versa going.
Your Mileage May Vary
So where does this calculation break down? I haven't calculated the cost of repairs properly (expect these to be a cost for the Versa, and a non-cost for the Leaf), and I also haven't calculated insurance (probably higher for the new-car Leaf). If you drive much more than we do, and can make the Leaf's range envelope fit your life, you might break even. If your current car is thirstier than our Versa, then you might break even (but compare to replacing your thirsty car with something more efficient, like...a Versa!)
What this suggests is that the financial break-even for some electric cars is now surprisingly close to that for gas cars. If you care about total operating costs, EVs deserve your attention. Given that batteries seem to be getting cheaper (albeit slowly), the price trend may favour EVs.
But I promised you a twist ending, right?
A Twist Ending
Prices matter, and there's a lot of things in the EV market that serve to distort prices, possibly temporarily. If you buy an EV in BC, you'll be eligible for a $5000 discount on the purchase price, so that's a nice incentive. Be sure it's available when you buy, though. More importantly, when you charge up an EV, you're using electricity. The important attribute of electricity here is it has no gas tax.
Gasoline, of course, has gas tax. This isn't an inherent element of gasoline, it's a sideways method of funding road use (and it's weakly Pigovian, in this case pushing people to avoid using gasoline). But once EVs become a large part of the road population, they will be taxed, somehow, to make up for the lost gas taxes. This won't be the whole story when it comes to EV operating costs, but it means that both government subsidies to EV purchases and the fuel-tax-freedom of EV power can be expected to go away. This may not prevent EVs from taking over, but a sharp-eyed long-term assessment has to account for those subsidies, and their likely disappearance.
It came out pretty close. If I torture the numbers a bit, they might confess a new answer, one that tells me to buy an EV. If I valued New Car Smell more, I'd be able to justify a new EV. But the cold equations say we're keeping the Versa.
Ask me again in a year.