When it comes time to purchase a new vehicle, trying to choose between gasoline, gas-electric hybrid (HEV), plug-in hybrid (PHEV), and electric (EV) models makes the selection process more confusing than ever before.
Gasoline-powered cars can be inexpensive, but fuel prices are volatile and are likely to rise at some point in the future. HEV powertrains can help save money on fuel and don’t cost much extra, but if you’d rather delve into the electric driving realm, they won’t quite cut it. PHEVs and EVs can carry hefty price premiums, but other savings can offset the number on the window sticker if your location and lifestyle allow it.
The quick answer is that there is no quick answer. It all depends upon where you live, what you do, how far you drive every day, and how many people or how much stuff you need to cart around. What works for one person won’t necessarily be right for another. But since buying a car is one of the biggest purchases you’ll ever make, it pays to do a thorough investigation of all the options and how they apply to you.
I’ve been through this drill myself. After reading about climate change for years, it wasn’t like the information hadn’t penetrated, it’s just that I felt powerless to do anything about it.
But when I finally bought my own house in the spring of 2018, I figured it was finally time to reduce my carbon footprint – if ever so slightly – by swapping out my sooty 1980s Subaru for a clean-running plug-in hybrid. That way, I’d enjoy the benefits of in-town EV driving while still being able to drive the car on long trips without worrying about where I would recharge it. In addition to helping save the planet, I thought I’d save a bunch on my fuel bill, too.
Then I started doing my research and ran into a hiccup in my plan.
Cost vs. Environmental Impact
Electricity, where I live, is about 77% more expensive than the national average. Plus, many of the electric power plants in the area are fueled by No. 2 fuel oil and natural gas. Natural gas is cleaner-burning than gasoline, but much of it is extracted through a process called hydraulic fracturing – better known as “fracking” – which is known to have adverse air and water quality impacts.
This was hardly the clean energy scenario I had dreamed of, so I considered adding a solar array to my house to offset my fossil fuel-powered electricity consumption. That, however, is an expensive proposition. Even with federal and state tax rebates, I’d still have to lay out tens of thousands of dollars to get the solar panels and wiring installed.
It also struck a narcissistic chord – there are no solar panels on the market that won’t make your house look like a house with solar panels on it, and that’s not really the look I wanted for my 1920s Craftsman cottage.
But mostly it was about the money. As with many people, solar wasn’t going to work for me.
The Appeal of the Plug-in Hybrid
Price-wise, PHEVs fall somewhere between EVs and internal combustion engine cars, and they allow short-range electric driving with the benefit of a gasoline engine to make long trips easy and hassle-free. This combination of traits made owning one appealing to me.
Of course, their cost-effectiveness all depends on the model you choose and how hard you lean on the car’s built-in EV capability. But assuming you do your due diligence and plug in every day at the office and every night at home (and assuming you choose a model with enough EV range to meet your commuting needs), the only gasoline you’d ever have to use would be on longer jaunts or unplanned side trips.
In terms of PHEV all-electric range, the Chevrolet Volt, with 53 miles, and the Honda Clarity Plug-in Hybrid, with 48 miles, top the list. Then there’s the Chrysler Pacifica Hybrid minivan, which boasts tons of interior space and seating for seven while providing an EV range of 32 miles.
Most other PHEV models offer EV ranges of less than 30 miles (and many less than 20), and you know how it can go when you’re out running errands and taking the children to and from activities – 50 miles can go by in a flash. The good news is that a PHEV works just like an HEV once the battery charge is exhausted, so you’ll still get better fuel economy than in a regular vehicle.
If you never plan to plug a vehicle in, but you want a more efficient form of transportation, consider a traditional hybrid. They improve upon gasoline engine fuel economy and don’t necessarily add the cost increase you’ll see with a PHEV. For example, the Honda Insight, Hyundai Ioniq Hybrid, Kia Niro, and Toyota Prius are all conventional hybrids with base prices under $25,000. All of them boast outstanding fuel-economy ratings and don’t require plugging in.
Not everyone has access to charging stations, either. Many people live in apartment buildings or housing complexes where plugging a car in isn’t possible, and some locales just don’t have many public charging stations. Traditional hybrids make great sense in these situations.
The Cost of Going Electric
Let’s compare the costs associated with owning gasoline, hybrid, plug-in hybrid and electric vehicles. No car company offers one of each in the same body style, so to make this as apples-to-apples a comparison as possible, we’ll examine similar front-wheel-drive small vehicles built by the same parent company. The contestants are the Hyundai Kona, the Kia Niro hybrid, the Kia Niro Plug-in Hybrid, and the Hyundai Kona Electric.
As this article is published in January 2019, according to the U.S. Energy Information Administration, the national average rate for residential electricity is $0.13 per kWh, while the American Automobile Association (AAA) says the average price of a gallon of gas is $2.25. For loans, we’ll assume a 4.5% rate for a 48-month term, and a 20% down payment. We’ll also figure on driving each car 13,500 miles per year, which is the average according to U.S. Department of Transportation.
Our gasoline vehicle is the Hyundai Kona SE, which starts at $21,035 and has an average fuel economy rating of 30 mpg in combined driving from EPA. According to Hyundai’s website, the monthly payments for a 4-year loan on a Kona SE would be $384 per month. Once we amortize the cost of the $4,207 downpayment, the annual ownership cost would be $5,660 until the car is paid off. Fuel would cost $1,012.50, putting the annual cost to own and operate this vehicle (not including insurance and registration fees, which are a whole other ball of wax) at $6,672.50. If you leased the Kona for 36 months and 45,000 miles, your total annual cost would be $4,560 annually.
2019 Hyundai Kona SE
- Buy = $6,672.50 annually
- Lease = $4,560 annually
Moving on to the conventional hybrid powertrain, the Kia Niro – a hybrid you don’t have to plug in – starts at $24,485 and, in FE trim, has an EPA average fuel economy rating of 50 mpg in combined driving. Using Kia’s payment calculator, I came up with a monthly payment of $447 per month. Adding in the amortized $4,900 downpayment, the overall annual ownership cost is $6,589. Fuel would cost $607.50 for the year, for a total own/operate cost of $7,196.50. The annual cost to lease and operate a Niro LX would be $6,338.
2019 Kia Niro
- Buy = $7,196.50 annually
- Lease = $6,338 annually
This starts to get complicated when we talk about ownership costs for a PHEV, because it all depends on your daily driving patterns and both your willingness and ability to plug the vehicle in on a regular basis.
The Kia Niro PHEV has a 26-mile electric driving range and gets 46 mpg in combined driving after the gasoline engine turns on. Based on the DOT’s average mileage data, we know that the average American drives about 37 miles per day. Going by the EPA’s plug-in hybrid worksheet, I can break down my driving into commute miles and long trips with an assumption that I’ll be busy and will only charge once per day. It puts my vehicular electrical use at $337 for the year, and gasoline use at $264, for a total fuel cost of $601.
The Niro PHEV is priced from $29,495. A federal tax credit applies to this car, reducing the price to about $24,950. According to Kia’s payment calculator, my $455 per month payment and amortized $4,990 downpayment would result in an annual ownership cost of $5,571. Add in the fuel bill and the total to own and operate is $6,175. The annual cost to lease and operate a Niro Plug-in Hybrid would be $5,011. (Kia uses the tax credit to lower the cost of the lease payments.)
2019 Kia Niro Plug-in Hybrid
- Buy = $6,175 annually
- Lease = $5,011 annually
Finally, we’ll crunch the numbers on the Hyundai Kona Electric, which starts at $37,495 and – according to Hyundai – has an impressive 258-mile range. The cost to keep its 64 kW battery charged up over 13,500 miles would be $435. If you buy the car, you get a $7,500 federal tax credit – and another tax credit from the state if you live in California, New York and a number of other states. So your annual ownership cost, with only the federal credit applied, would be $8,617. The estimated annual cost to lease and operate a Kona Electric* would be $6,055. It’s important to note that you don’t get the tax credit if you lease an EV, but the automaker can use the credit to help lower lease payments.
2019 Hyundai Kona Electric
- Buy = $8,617
- Lease = $6,055*
Obviously, these values are in a constant state of flux, and it really depends on where you live, how much you drive, the model you choose, what’s happening with gas prices, and what deals the car companies are offering.
What appears clear, however, is that buying a plug-in hybrid vehicle is likely to be your best bet among all of these choices, while leasing a PHEV is second only to gasoline models in terms of low cost of ownership.
Finding the Right Electrified Vehicle Isn’t Easy
Finding the right electrified vehicle isn’t easy. Let’s say you need more space than a subcompact commuter-mobile can provide. Or maybe you prefer a luxury marque instead of a mainstream model. Perhaps you live in a place where it snows a lot and you want all-wheel drive. In any of these cases, up goes cost and down goes efficiency.
Range is another important consideration. Gasoline-powered vehicles offer decent range – usually 300 to 400 miles – and it’s easy to find filling stations for them. But hybrids and plug-in hybrids offer the ultimate in overall range, with many models able to go 500-600 miles between fill-ups. And neither requires that you find an electrical outlet in order to keep driving.
Comparatively, EVs can remain challenging to “refuel,” and aside from Tesla’s expensive model lineup, the closest thing to gasoline range in the EV segment is the Kona Electric, which still falls short at 258 miles. You need to be a planner to own an EV, whereas the other vehicle types offer much greater flexibility.
The Bottom Line
One of the best ways to help choose between gas, HEV, PHEV, and EV is to create a spreadsheet or a chart listing the models that interest you.
In addition to charting expenses based on fuel or electricity rates in your area, and your annual mileage, be sure to include columns for vehicle price, range, size, safety technology, cargo volume, and any other features you find necessary. Then test drive the vehicles that meet your needs and see what you like. That visceral feel from behind the wheel is not something you’ll get from columns of numbers.
This is a time-consuming exercise, to be sure, but taking it on is better than getting stuck paying for a vehicle that doesn’t work for you, even if it is cheaper. After all, a Niro may be one person’s hero and another’s Gremlin.
If your main concern is your carbon footprint, however, there’s a very simple solution that precludes any difficult decision-making. Drive less. The less energy you consume – whether fossil fuel or electrical – the less carbon dioxide will end up in the atmosphere.
By the way, I still have my old Subaru. I just don’t drive it as much as I used to.
* As this article was published, Hyundai had not established lease programs the Kona Electric. We used the car’s announced base price and a leasing calculator on Nerdwallet to make this estimate.