Experts Say Gas Cars Remain More Economically Viable Than EVs Despite New Study, Implications for Policy Remain Unaltered

Gas Cars vs. EVs: Which is More Economically Viable?

In recent years, electric vehicles (EVs) have gained significant attention and popularity as a greener alternative to traditional gas-powered cars. However, a new study by Anderson Economic Group suggests that gas-powered vehicles may still be more economically viable than EVs, especially with dropping gas prices. This finding has implications for policy decisions surrounding the promotion and adoption of EVs in the automotive industry.

The study compared the fueling costs of gas-powered vehicles to EVs in the fourth quarter of 2023. It found that, on average, entry-level gas cars, such as the Honda Civic and Subaru Impreza, had a fueling cost of $9.46 per 100 purposeful miles. In contrast, similar-sized EVs, like the Chevrolet Bolt and Nissan Leaf, had an estimated fueling cost of $12.55 when primarily charged at home. The analysis also revealed that mid-priced gas cars, including the Chevy Malibu and Nissan Altima, were more cost-effective to fuel at approximately $10.71 per 100 miles compared to EVs in the same segment, which ranged from $12.61 to $16.11 depending on charging options.

The study’s findings come at a time when EV sales are facing challenges. Despite a hot start, EV sales at the beginning of 2024 represented only 9 percent of the new car market, with dealers struggling to move them off the lot. Hertz, for example, sold off tens of thousands of their EV inventory due to lack of demand. General Motors (GM) and Ford have also faced setbacks, with GM slowing its investment and producing more hybrids, while Ford experienced lower-than-expected sales for its all-electric F-150 Lightning and slowed production.

These challenges have led to questions about the government’s role in mandating EVs. The federal government has set a goal of requiring EVs to make up half of all new cars sold in the country by 2030. However, some experts argue that this goal may not align with market demand and that the government should reconsider its policies. Patrick Anderson, CEO and president of Anderson Economic Group, pointed out that dealers have had to absorb significant costs in building charging infrastructure, and the big question is whether the government should continue to mandate EV adoption.

The study’s findings have sparked debate among experts and industry insiders. While some believe that the study reflects a political backlash against EVs, others argue that it provides an honest comparison between different vehicle segments. Rex Roy, an automotive journalist and former OEM marketer, acknowledges that EVs vary greatly in terms of affordability and operating costs. He suggests that the study’s conclusion may be too simplistic and that there are affordable EV options on the market that are not only inexpensive to purchase but also to run.

Interestingly, luxury-priced EVs, such as the Porsche Taycan and Tesla Model X, were found to be the most economical in terms of fueling costs at $13.50 per 100 miles when charged mostly at home. This segment outperformed their gas counterparts, like the BMW 5 Series or Cadillac CTS, which had slightly higher fueling costs at $17.81 per 100 miles.

As gas prices fluctuate and technology advancements continue to improve EV efficiency and affordability, it remains to be seen whether gas-powered vehicles will maintain their economic advantage over EVs in the long term. While the Anderson study highlights some valid points regarding the current state of the market, it’s essential to consider the broader context and the potential for future developments that could tip the scales in favor of EVs.

In conclusion, the debate between gas cars and EVs’ economic viability is far from settled. The Anderson study challenges the notion that EVs are always more cost-effective to drive, especially with dropping gas prices. However, experts and industry insiders emphasize that the comparison should not be oversimplified and that there are affordable EV options available. As the automotive industry continues to evolve, policymakers, manufacturers, and consumers must carefully consider the economic implications of their choices to drive a sustainable and efficient transportation future.