One of the most significant driving factors when choosing between a car that runs on petrol or electricity is the cost. The cost has a multitude of variables ranging in scope, from fuel charges to maintenance fees, to the overall price of the vehicle itself.
One of the biggest arguments made against electric cars is that they are too expensive upfront, and this is simply not true today as more than forty different models have come to market with many tax exemptions added to them in other markets.
In this post, we will be comparing the charging cost of an Electric Vehicle vs filling a Fuel Vehicle.
Electric vehicles have a significant advantage regarding cost due to impressive federal and state EV incentives compared to fuel vehicles. I strongly recommend looking into your state’s electric-car tax credits as the tax incentives can drastically lower the cost of electric cars. Buying an EV in the US seems like the opposite of how booking a room in a hotel works.
Taxes are added to every service you request in the hotel, but tax credits are added to you buying the EV from federal tax credits of $2,500 to $7,500 to electricity discounts and even dealership discounts since most EV makers do not sell through dealerships.
What is the Cost to Charge an EV in kWh?
“A conservative rule used mostly is that an electric car gets 3 to 4 miles per kWh,”. So, divide the total miles you drive each month by 3, to get the kWh you would use monthly. Multiply that number by your cost per kWh. The dollar or cedi amount you get will most likely be lower than what you pay each month to buy gasoline or petrol.
To put this into perspective, let’s give an example. Let’s say you drive about 1,000 miles per month. For an EV, you will use 333 kWh in that timeframe. Using the U.S. household average from May 2021 of 14 cents per kWh, it would cost $46.66/month to charge an EV.
The average cost per kWh for Ghanaian households as of January 2021 average from 32.6 Peswes per kWh for the 0-50 tariff category and 61.4 peswes for the 51-300 tariff category. So, using the 51-300 tariff category because your car might be charging between that range per hour, it would cost you Ghc 204.5/month to charge an Electric vehicle for 1,000 Miles or 1,609.34 kilometers. Just remember the tariff rates are different for residential and non-residential.
Do the Numbers Add Up?
Again, to keep things digestible, let’s use a simple formula.
Suppose you put 1,000 miles on your vehicle which is the same as 1,609.34 kilometres each month, for example, and pay 61.4 pesewes in your area for each kilowatt-hour of electricity. In that case, this pegs your at-home EV recharging bill at Ghc 204.5 per month (based on the calculation of 3 to 4 driving miles equaling one kilowatt-hour). Even if you increase your electric rate to 94 pesewes per/kWh, your EV recharging cost will be Ghc 313.33.
So, the formula would be for cost of charging would be = (Distance in miles / 3) * Cost per Kwh in your location
How Does the Recharge Cost of Electric Vehicles vs Fuel Vehicle Compare?
Let’s use the 2019 Honda CR-V AWD 1.5 L, 4 cyl, Automatic (variable gear ratios), Turbo, Regular Gasoline which has 30 MPG combined city/highway consumption.
The average cost per gallon is $4.088 (Ghc 24.53) in Ghana and $3.18 per gallon in the US as of this writing.
So, let’s say your regular monthly travel is 1000 miles or 1,609 kilometers and you use the 2019 Honda CR-V AWD 1.5 L which consumes 1 gallon per every 30 miles or 48.3 kilometers.
You will need to fill the car with 33.3 gallons of fuel over the month or period involved to cover the 1000 miles or 1,609 kilometers.
So, 33.3 gallons * $4.088 (Ghc 24.53) = $136.27 (Ghc 817.67).
Using the Honda CRV will cost you Ghc 817 for the whole month compared to Ghc 204.5 or Ghc 313 if we decide to use the highest tariff charge of 94 peswes per kWh in Ghana for the electric vehicle. This means you will be saving between Ghc 7,358 to Ghc 6,056 every year using the EV compared to the Honda CRV in Ghana.
Remember this is only an estimate since fuel prices and mileage are so variable though. But considering few cars and SUVs come anywhere close to delivering a 30-mpg combined average, my conservative estimate in this scenario makes it clear that recharging will cost less than keeping a car refueled. The financial gap narrows with a more fuel-efficient car, but it remains.
Electric Vehicles vs Fuel Vehicle charging stations: availability and cost
Most electric cars nowadays can go about 200 to 350 miles on a single charge with 400 miles + expected soon, and the availability of public electric car charging stations is growing. (Currently, there is 72,000 electric vehicle charging stations in the US, compared to 136,400 gas stations, CNBC has reported meanwhile China has 1,680,000 charging stations. But in Ghana, there is none except at individual homes. So, it (theoretically) should be rare to find yourself running out of power with no vehicle chargers nearby.
Many EV owners buy their charging stations for home use. The cost of installing one in your home varies, and if you live in a shared apartment getting one put in may be tricky. For the cheapest model, which gives you 5 miles of charge per hour a vehicle is plugged in costs between $300 and $2,300 for the unit and installation, according to Fixr.
Unlike a typical 240-volt Level 2 home recharging system, Level 3 chargers are prohibitively expensive for a private individual to have installed. Tesla has its own dedicated Supercharger network. The rates can vary widely depending on region, timing, the model of Tesla being charged and not others EVs can charge on their network as of now, and even if you choose Tier 1 or Tier 2 recharge speeds (the latter being quick but more expensive).
Maintenance Cost of An Electric Vehicle
We all know EVs have fewer moving parts than their engine-powered counterparts. There are no engines to maintain, no belts to check, no oil to change and the list goes on. As you might imagine, having fewer mechanicals to check and maintain makes running EVs significantly cheaper, and the U.S. Office Of Energy Efficiency and Renewable Energy has recently given us insight into just how much cheaper electrics can be as part of a look at the government’s own vehicle fleet.
Electric cars aren’t exactly maintenance-free so let’s look at the top five electric car maintenance needs and things that could lead to repair.
It’s common to all cars but on EVs, it remains important if not more so because they swap out their heavy transmission engines for a heavy battery putting a lot of loads on tires.
- Braking system on your car.
Not the pads but the fluid that puts pressure on the pads to the rotors. This is key because if they get stagnant, polluted it doesn’t work right. These are also changed in fuel vehicles as well.
- The coolant in your electric car.
Though there’s no engine, there’s a cooling system that keeps everything under the hood cool. You will still change the coolant in your internal combustion engine car, and it might be changed more regularly than the EV.
Now we are talking pads and rotors. Same thing will be done on your internal combustion engine vehicle.
I can’t give you the number of miles or number of months before you can get the brakes done.
The number one maintenance side of your EV is the motive power battery. This is the heart of your car’s range and therefore its livability as well as your car residual value whether you’re leasing or buying it. Well, you will have to change your car battery in your internal combustion engine but that cost less than the EV.
So technically, all maintenance cost associated with the EV is also associated with the internal combustion engine except they are much smaller and will not be done regularly as in your fuel driven car.
Price of An Electric Vehicle
It is obvious we don’t make EVs in Ghana or Africa and in the same way, we don’t have EV policies or tax credits here. Many EVs are pricier, there are state and federal tax credits totaling thousands of dollars and many shoppers in the US look at these tax credits as a sort of discount on the car itself.
Let’s use the Chevrolet Bolt EV which cost $31,995 (Ghc 194,148). This can give you 259 miles (416 kilometers) on a single charge. Remember there are “cool looking” EVs than this car.
Using the current T-bill rate of 13% PA in Ghana, it would take almost 12 years to recover the purchase price of the car if the cost per kWh was 0.61 pesewes and almost 13 years if the cost per Kwh was 0.94 pesewes.
Cost Savings From Using An EV compared to Fuel Car
Remember this is only an estimate since cost per Kwh can change at any time. But considering we used higher tariffs for this estimate, my conservative estimate might still hold when things change a bit. I would also not imagine you keeping your car for 12 to 13 years, but this shows you have an opportunity to get your money back compared to keeping an internally combusting car that eats into your pocket rather. The cost savings on this car was compared against the Honda CRV 2019 1.5L model.
Should You Buy an Electric Vehicle
The answer depends on your current financial situation, but my advice is to buy it especially if you are in Africa because governments have seen fuel as an easy step to taxation, but an EV is a simple way to reduce that burden.
Most countries like the US and UK offer Tax credits for EV buys which can help offset the high initial cost of the car which is currently unavailable in Ghana.
The initial cost involved in buying an EV will ultimately be higher than that of a combusting engine, but you must remember it will pay off after some time. The technical support and charging infrastructure will also be a challenge for an EV user in Ghana as of now but you can defiantly charge at home and use it as frequently as you use your other cars.
——–
By: Raphael Amuri