Electric vehicles (EVs) will reduce your transportation costs, even if you continue to drive a gasoline-powered vehicle.
If you own an EV, you will save thousands of dollars per year by not buying gasoline and in lower maintenance costs.
Drivers who continue to operate gasoline-powered vehicles will save money, because the cost of that gasoline will be cheaper.
Even those who get around by walking, bicycling, or taking public transit will still save, because all of the goods they buy will be less expensive due to cheaper fuel costs.
Put simply, electric vehicles save everyone money.
Owning and operating an EV is much less expensive than owning an equivalent gasoline-powered vehicle, even considering higher sales prices for EVs.
A 2020 Consumer Reports analysis shows that during the first seven years of ownership, EVs save their owners between $6,000 and $10,000 over the cost of operating gasoline-powered vehicles.
A typical EV owner spends around 60 percent less on fuel than the owner of a gasoline-powered vehicle. For an SUV owner, that means spending an average of $780 a year instead of $1,800.
Real-world maintenance and repair data from Consumer Reports customers shows that EV owners spend less than half as much on maintenance and repairs as the owners of gasoline-powered cars. Lifetime maintenance costs for gasoline-powered cars average $9,200 compared to $4,600 for EVs. This makes sense, since gasoline-powered vehicles have five times more parts than EVs .
The analysis has a clear conclusion: “the latest generation of mainstream EVs typically cost much less to own than similar gas-powered vehicles, a new development in the automotive marketplace with serious potential consumer benefits.”
Even better, while those EV owners are saving money for themselves, they are also contributing to saving money for everyone else, because they are helping to lower the demand for gasoline, driving down its price.
As we all know, a reduction in demand for most products results in the price of that product going down. If you’ve gone toy shopping in January, you understand the idea. The supply of toys is still there, but because fewer people are shopping for them the demand has significantly dropped. To keep moving merchandise, stores need to cut prices.
A similar dynamic will occur as EV usage grows. Oil companies already have their producing fields and won’t be able to curtail production just because fewer people are driving gasoline-powered cars.
This will cause the supply of oil to outstrip the demand for oil, and the price of oil (and then gasoline) to fall.
Based on historical precedent and market analysis, Skibo Energy predicts that once the number of EVs on the road reduce oil demand by around 5 percent (or about 126 million EVs in service) the price of oil will fall by about 50 percent. While that replacement will likely happen more rapidly than conventional analysis predicts, it will still take several years. Smart policies like EV subsidies and funding for charging stations will accelerate the switch to EVs helping us reach the 126 million EVs needed to crash oil prices.
In the meantime, each additional EV on the road means a little less demand for gasoline, making your trip to the gas station a little less costly than it would have been without that EV.
Since fuel costs are a major component of most consumer goods, EVs also make those goods cheaper.
As EVs reduce the price of gasoline, goods will get less expensive. This will happen slowly at first and then dramatically once EVs lower oil demand by 5% and crash oil prices. So EVs will save everyone money, even people who don’t drive.
Bottom line: Electric vehicles lead to cheaper gasoline. They will save money for EV owners, gasoline-powered vehicle owners, and anyone who buys pretty much anything.
It’s already happening to a limited extent as everyone who switches from a gasoline-powered vehicle to an EV is lowering demand for gasoline. However, once EVs start to really displace gasoline-powered cars oil prices will plummet, like toy shopping in January.