Driving Electric Savings–One Utility’s View

By Paul Gipe

While prepping for an upcoming talk to the local chapter of the Sierra Club about electric vehicles I stumbled on our local utility’s web site promoting EVs.

Pacific Gas & Electric’s Welcome to the EV Savings Calculator opens a multi-page tool for comparing and contrasting various EVs with an equivalent fossil-fueled vehicle.

Of course electric utilities like EVs because they use . . . electricity. Duh. Still, it’s bold for a conservative business notorious for placing obstacles in the path of renewable energy in California to launch a program promoting EVs.

PG&E makes clear where they stand. The opening page begins by arguing that EVs are a good idea because they save money, are less of a hassle, and you can drive anywhere with them. (The latter may be a bit of a stretch even in “Green” California, but you get the idea.)

Now I haven’t analyzed PG&E’s estimates of the savings from an EV in detail, but they’re within the range I’ve calculated.

One item I do note, however, is that they use the Manufacturers Suggested Retail Price (MSRP) less any federal and state incentives, that is, subsidies. The problem is that Tesla’s MSRP is what you have to pay. There’s no dickering, adjustments, or rebates that lower the price you pay. In contrast, you’d be a fool to pay the “sticker” price for any other kind of car, such as, a Chevy Bolt. These are subject to negotiation and all kinds of “deals.”

For example, Tesla’s Model 3 is listed as $39,500 on PG&E’s web site and the Chevy Bolt as $36,600. Once you’ve added “options” to the Bolt that makes it equivalent to the Model 3, you’ve quickly pushed the price up to that of the Model 3. Yet few pay the full retail price for the Bolt. At the time of writing the official GM discount on the Bolt is $8,500 and with various other dealer incentives you can buy a Bolt for $10,000 off the MSRP.

Nevertheless, PG&E’s tool is useful for conveying the magnitude of savings from driving an electric car for those who don’t currently own one.

Tesla Model 3

PG&E estimates that a Model 3 will cost $31,300 after all incentives in California are applied. (With the expiration of the federal tax credits, the cost has risen to $33,700.) That’s for a white standard range plus. In comparison to driving a Toyota Camry 10,000 miles per year for three years, the Model 3 will save you almost $6,000. (With the expiration of the tax credits, the savings have dropped to $3,200.)

Chevy Bolt

PG&E also compares Chevy’s Bolt EV to Toyota’s Camry, though to me they seem quite different. PG&E says the Bolt will cost $29,000 after incentives and will cost $700 less than a Camry to fuel for an entire year. Total savings from the Bolt for three years is a whopping $7,000.

Flexible Calculator within Limits

The calculator is flexible. It allows the user to compare buying the car to leasing. You can also adjust the number of miles driven per year. And you can adjust the interest rate on the lease or loan. However, it doesn’t allow the user to adjust the sales tax, price of gasoline offset, or the price of electricity consumed.

I’d like to adjust the sales tax to include licensing and fees.

I also find the price of gasoline high relative to prices around Bakersfield, and the price of electricity used by the calculator is significantly lower than what we pay. PG&E assumes that the customer will switch to a rate plan that requires charging at night during off peak rates. The calculator assumes the cost of off-peak electricity is $0.16 per kWh. We pay a flat rate of $0.23 per kWh. I’ve calculated that switching to a new rate schedule is not in our overall best interest–so we haven’t.

All-in-all I found the PG&E calculator a useful tool, but I advise using the results with a modest amount of caution.