A study by researchers from the University of Michigan has compared the Total Cost of Ownership (TCO) of internal combustion engine and electric vehicles (EVs) across 14 cities in the US. The open-access study is published in the Journal of Industrial Ecology.

The study found that for a 300-mile range midsize electric SUV, TCO varies by $52,000—nearly 40%—across locations. Home charging access reduces the lifetime cost by approximately $10,000 on average, and up to $26,000, even when including the cost of the home charger.

EVs are more competitive in cities with high gasoline prices, low electricity prices, moderate climates, and direct purchase incentives, and for users with home charging access, time-of-use electricity pricing, and high annual mileage.

For internal combustion engine vehicle, hybrid electric vehicle, and 300-mile range battery electric vehicle (BEV) midsize SUVs, (a) the refueling costs, with three different charging scenarios for the BEVs (indicated by dots), (b) the total cost of ownership over the vehicle's 25-year lifetime, with three different charging scenarios for the BEVs (indicated by dots), in each city. Moody et al.

In general, the study found that small and low-range EVs are less expensive than gasoline vehicles. Larger, long-range EVs are currently more expensive than their gasoline counterparts. Midsize EVs can reach cost parity in some cities if incentives are applied.

Cumulative recurring costs (not discounted) for an ICE vehicle, hybrid EV, and 300-mile range BEV midsize SUV in each city over a 25-year vehicle lifetime.

The University of Michigan team examined the 14 cities that represent major vehicle markets and a wide range of climates, electricity markets, gasoline prices and levels of public policy incentives. The cities were Atlanta, Boston, Chicago, Cleveland, Dallas, Detroit, Houston, Los Angeles, Miami, Manhattan, Philadelphia, San Francisco, Seattle and Washington DC.

EVs are currently a cheaper option in some cities and for some owners driven by policy and environmental factors outside of their immediate control. As battery costs decline, we expect EVs will become cost-competitive in more locations and for more people.

—Maxwell Moody, lead author

Other key findings include:

• Location matters: Across the 14 cities studied, the total cost of ownership of an EV can vary over a vehicle’s entire lifetime. For gasoline vehicles, refueling is most expensive in San Francisco and Los Angeles and least expensive in Houston and Dallas. For electric vehicles, charging is most expensive in San Francisco, Los Angeles and Boston, and least expensive in Atlanta, Chicago and Cleveland.

• Incentives: Federal incentives, such as the $7,500 federal tax credit, play a pivotal role in accelerating the break-even point between electric vehicles and gasoline vehicles. In some cities, federal incentives can be combined with state and local incentives.

• Accessibility: The higher purchase price of EVs is a challenge for low-income households, but operating costs offer savings compared to hybrid and traditional internal combustion engine vehicles. Ensuring equitable access to home charging infrastructure, especially for renters and those in multifamily dwellings, is essential for the transition to electrified transportation.

Resources

• Woody, M., Adderly, S. A., Bohra, R., & Keoleian, G. A. (2023). “Electric and gasoline vehicle total cost of ownership across US cities.” Journal of Industrial Ecology, doi: 10.1111/jiec.13463