Friday, August 10, 2012

EPA Sticker of the 2013 Chevy Volt: Savings Examined

As I have stated in previous posts, buying an electric car takes a little more thought and consideration when compared to a normal car.  Not only do you have to examine your typical commute and accessibility to charging infrastructure, but you also need to look beyond the EPA Sticker on the car to determine your actual savings.  Let's look at the 2013 EPA Sticker for the Volt, and examine this in some detail.

According to this label, the average driver will save ~$7,000 in fuel in 5 years of ownership.  How do they define the average driver?
  • 15,000 miles a year
  • $3.80 a gallon fuel
  • 12 cents per kWh energy rate
  • 35 kWh/100 miles
Compared to the same driver purchasing a vehicle getting 23 MPG.

So there are actually 5 variables here plus one hidden variable.  At least hidden to me (point it out if I have missed it).   They are considering that Volt owners will enjoy a mixture of both electric driving and gasoline driving.  How do I know that? We'll examine below.

After 5 years of driving a car at 15k miles a year, you will have 75,000  miles on the odometer.  For the car averaging 23 miles per gallon, this means that car will have burned 3,261 gallons of fuel.  At  $3.80 a gallon, this will give you $12,392 spent in gas (in the fine print on the sticker, they have $11,600 in gas, but they obviously forgot to update that with a new gas price, as my math is not wrong).

The Volt, if driving by the sticker efficiency of 35 kWh per 100 miles, and driving 100% of the time in electric mode, will cost the following in electricity:

75,000 miles divided by 100 mile units = 750 units
750 units multiplied by 35 kWh = 26,250 kilowatt hours
26,250 kWh multiplied by 12 cents per kWh = $3,150

If we take the fuel cost in the 23 MPG car and subtract it from the electricity cost:
$12,391 - $3,150 = $9241.  This savings exceeds the EPA sticker rating.

So, if you drove the Volt 100% of those miles in electricity, your savings are $2,000 more than the sticker.  So how did they come up with a savings of $6,850?  By assuming a considerable percentage of your driving will be on gas.

How do we figure out the percentage?

Take $9,241 (our savings with 100% electric driving) and subtract from their savings of $6,850
= $2,391

We take that number, and divide by their fuel cost of $3.80 per gallon
= 629 gallons

In the Volt, 629 gallons will get you 23,902 miles (based on 38 MPG combined). 

So, exactly what percentage of your time driving the Volt does the EPA think you'll be using gas?  Apparently just about 1/3 of the time.  They are giving you a combined MPG rating of  119 miles per gallon (75,000 miles / 629 gallons).  As it turns out, that reasonably matches what we're seeing on for the average Volt driver.

So, the sticker is making some reasonable assumptions.  Why can't you take this at face?

Let's examine my situation with a few changes to their assumptions to match mine:

  • 15,000 22,000 miles per year
  • $3.80 a gallon fuel
  • 12 6 cents per kWh energy rate
  • 35 31 kWh/100 miles

So, I drive a lot more.  My energy rate for charging is HALF the national rate.  I am more efficient in my driving than the sticker, and am averaging about 31 kWh per 100 miles, which extends my actual electric range per kWh consumed.

I'll use their assumption of 119 MPG combined for the moment.  Let's run through our math again:

22,000 miles per year * 5 years = 110,000 miles

For our traditional car getting 23 MPG.
110,000 miles divided by 23 MPG = 4,782 gallons
4,782 gallons multiplied by $3.80 = $18,171

For the Volt:
We need to get their 'electric and gas miles' based on 119 MPG combined rating.
110,000 / 119 MPG = 924 gallons burned
924 gallons multiplied by 38 miles per gallon = 35,112 miles

So, they think the average person will travel 74,888 miles on electricity and 35,112 miles on gas.
Those costs:

924 gallons burned mutiplied by $3.80 = $3,511
74,888 miles divided by 100 mile units = 749 units
749 units multipled by my efficiency of 31 kilowatt hours per unit = 23,215 kWh
23,215 kWh times my electric rate of 6 cents per kWh = $1,392

Combined cost of gas and electricity in the Volt: $4,903

5 YEAR FUEL SAVINGS OVER THE 23 MPG CAR: $18,171 - $4903 = $13,268

My actual savings are closer to $16,000, as I am driving 96% electric, or over 850 MPG combined rating, which is over SEVEN TIMES BETTER than the EPA rating.  I have included my running total chart below.  Its more math, but just know that it isn't hard to improve dramatically beyond the 119 MPG combined rating of the EPA chart and really increase your savings.

So, what does all this boil down to?  The Volt is NOT an expensive car when you look at all the costs:

In the EPA case (15k miles a year with all their assumptions):
Volt cost of ownership = $32.5k (post tax rebate) + $4,538 (fueling cost) = $37,038
23 MPG car = [$20k .. 25k] + $12,391 (fueling cost) = $32,391 .. $37,391

In my case (22k miles a year with a higher efficiency and half cost electrical rate):
Volt cost of ownership = $32.5k (post tax rebate) + $4903 (fuel costs) = $37,403
23 MPG car = [$20k .. 25k] + $18,171 (fueling cost) = $38,171 .. $43,171

Conclusions:  The Volt, even by EPA data is marginally more expensive than a very inexpensive $20-$25k car, and WILL be cheaper as your approach the top of that range and go beyond.  If you drive more miles and have better electricity rates, the Volt is CHEAPER UNDER THAN A $20K CAR.