Car Decisions  –  Gas vs Electric

I have been thinking about new car options. Not that I am in the market since my 2016 VW Passat just reached 40,000 miles and at that rate should last another eight years or so. But my wife’s 2019 Hyundai Santa Fe has nearly twice as many miles and based upon past experience may come up for consideration in the next year to two.

So, I have been thinking about cars. Also, I have seen quite a few articles about electric cars (EVs) and the supposed advantages of them. But, looking at sales in the US, there does not seem to be a major move away from standard gas vehicles. Although there has been a pretty good growth in sales over the last five years.

Globally, sales have grown from 2.2% in 2018 to nearly 18% in 2023 with a substantial growth this year primarily driven by the China market. In the US, sales growth is not quite as robust with 2018 sales at 1.8% growing to about 7.6% in 2023 and just under 8% this year. At this rate it will be sometime before new cars sales even approach 25% of the market and as for cars on the road, it will be a while before we see the impact of a shift from gas cars. There may be pockets where EVs may be more prevalent but this will be in urban areas and where the incentives can swy the market.

A question regarding the global growth versus the US leads to differences in political incentives in places like China and Europe. While there are political and economic incentives in place in the US, they are not nearly as significant as those seen in China or parts of Europe. That is with the possible exception of California where they have set a goal of zero-emissions by 2035. Based on current adoption rates. California will have to employ significant political and economic pressure.

So why should US car buyers be swayed into buying an electric vehicle?

There are parts of the US where it is impractical to consider an EV. This is especially true in rural areas in the mid-west where daily travel distances are great and charging opportunities are few. There may be areas in California where this is true as well and it will be interesting to see how the political imperatives resolve themselves with geographical realities (not that realism has been a consideration in California lately).

There are parts of the US where it is impractical to consider an EV. This is especially true in rural areas in the mid-west where daily travel distances are great and charging opportunities are few. There may be areas in California where this is true as well and it will be interesting to see how the political imperatives resolve themselves with geographical realities (not that realism has been a consideration in California lately).

Other concerns center around charging station facilities. Longer trips with EVs have to be planned with consideration of the location of charging stations and the time it takes to recharge which currently around 25 to 30 minutes. This is compared to the nearly ubiquitous availability of gas stations and the fact that it only takes a few minutes to fill up with gas.

However, as a basis for any decision you do need to look at the overall costs of EVs versus gas and that include purchase price, operating costs and maintenance costs. Then, you have to add in the social political issues which are becoming more consequential.

Here is a simple comparison table. There are more extensive assessments but that’s a bit beyond the scope of this article.

These estimates provide an overview of the operating costs for cars driven 15,000 miles annually. Costs may vary based on location, driving habits, vehicle type, and local electricity rates.

Using these numbers, it would take 8.75 years for a total cost to breakeven. Plus, there may be some other incidental costs such as installing a charging capability at your home. Electric costs may be further offset if you have solar energy installed at your home. And there may be other considerations I am not thinking of. But this is still not the whole story.

There are ever changing social and political considerations.

The social issues are mostly centered around environmental concerns People are increasingly motivated by the desire to reduce their carbon footprint and contribute to a cleaner environment. Also, Modern consumers often seek the latest technology, and EVs represent cutting-edge advancements in automotive technology. Features such as instant torque, quiet operation, and advanced infotainment systems appeal to tech-savvy buyers

The political issues are more complex:

• Government Incentives: Many governments offer substantial financial incentives for purchasing EVs, including tax credits, rebates, and grants. These incentives help offset the higher initial costs and make EVs more accessible to a wider range of consumers.
• Regulatory Mandates: Policies such as emission regulations and fuel economy standards compel automakers to produce more EVs. For instance, the European Union has stringent CO2 emission targets that incentivize the production and sale of low-emission vehicles.
• Zero-Emission Goals: Some regions have set ambitious goals to phase out internal combustion engines. For example, California aims to have all new car sales be zero-emission vehicles by 2035. These targets drive both supply and demand by encouraging automakers to focus on EV production and consumers to consider EVs for futureproofing their purchases.
• Investment in Infrastructure: Governments are investing heavily in EV infrastructure, including public charging stations and grid improvements. This investment reduces the barriers to EV adoption and encourages consumers to switch from gas-powered vehicles.

So where does all of the lead. Currently, this is pretty much an individual decision. Are environmental issues more important? Are monthly operating costs key? Do geographic issues limit choices?

Some things are recognizable: gas prices are most likely going to continue to raise, but so are electricity costs. Governments both state and federal will create various incentives that will be in line with broader policies and other issues. Technology will continue to improve battery performance and life at ever deceasing costs.

None of this makes the decision any easier. So, I guess in the short term, you will have to rely on the old basics:

• does it look good,
• is it the color I want
• does it have a good navigation system, and
• does it have a good infotainment system.