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Total Costs Associated With EV Charging Higher Than ICE Fueling, Report Says

Total Costs Associated With EV Charging Higher Than ICE Fueling, Report Says

Fueling an electric vehicle is often more expensive than fueling a similar
vehicle with an internal combustion engine (ICE) once the cost of at-home
charging equipment, premium electric rates and additional road taxes are
factored into the equation, according to the results of an analysis conducted
by a Michigan-based business research firm.

The 36-page study by Anderson Economic Group found that while the fueling cost
per hundred miles for ICE vehicles ranges between $8.58 to $12.60, commercial
charging costs for similar EV models range between $12.95 and $15.52/100 miles.
The cost of mostly home charging for a luxury EV model averages $14.15,
according to the study.

The driver of an entry or midpriced ICE vehicle could expect to pay about
$1,030 per year in fueling costs if they drove about 12,000 miles annually, and
the owner of a luxury ICE vehicle would likely pay $1,512, the study says. The
owner of a mid-priced EV using mostly commercial charging would pay about
$1,554 per year, and the owner of a luxury EV would pay an estimated $1,862.
The owner of a luxury EV who mostly charged at home would pay $1,698 to fuel
the vehicle, the report estimates.

The price comparisons for commercial charging and fueling include a cost for
what the study authors call "deadhead miles," which they define as the miles
incurred driving to a charger or fueling station. The study puts this cost as
higher for EVs, since there are relatively few commercial charging areas
available compared to the availability of gas stations.

The report estimates that in non-rural areas, it can take 20 minutes to drive
to a charging location and 20 to 30 minutes for fast charging to take place. It
said that, based on 2021 infrastructure, the time involved in recharging an EV
is typically five to 10 times that of fueling comparable ICE vehicles.

The study tries to calculate the cost of refueling time by applying the minimum
hourly wage, as well as the hourly wage of someone making $70,000 annually --
which the report said represented "sufficient income to qualify for a luxury
segment vehicle loan."

At the minimum wage, the time cost for an EV driver can be about $50 per month,
while an ICE driver would see a cost of less than $10. Using the higher annual
wage implies a $200 per month time cost for EV drivers compared to $33 for an
ICE driver.

The analysis also notes that for ICE drivers, many of the costs associated with
driving -- such as taxes to pay for road maintenance and the cost of fueling
equipment -- are bundled into the cost of gasoline.

"Because the industry and associated technologies are changing, these estimates
should be viewed as a snapshot of comparable expenses at the time of this
writing," the report says.

The study found that fueling costs for EVs vary much more than for ICE
vehicles. This is due to commercial charger rates that are often double or
triple residential electric rates, the study said. Use of commercial chargers
can involve a combination of per kilowatt hour cost, per unit time as well as a
per session cost.

"This produces charging costs that vary considerably when calculated on a per
kWh basis," the report said.

While residential charging costs can be significantly cheaper, time-of-use
rates can boost those costs by as much as 50%, the study says. The study
authors say they expect such time of use rates to become more prevalent as home
EV charging increases.

The report's conclusions show the cost of charging EVs as being substantially
higher than those presented in other studies on EV charging. But the authors
argue that their analysis considers the true expenses that EVs require.

"Many commonly-cited studies of the cost of driving EVs include only the cost
of electric power for EVs, but compare this with the total cost of fueling an
ICE vehicle. Moreover, many presume drivers can routinely charge at favorable
residential rates, ignoring the much higher costs of the commercial chargers EV
drivers must use when they are away from a residential charger," the report

The report is the first of a series Anderson Economic Group said it plans to do
on EV usage. The company bills itself as a "boutique consulting firm" that
primarily works in the automotive industry, consulting for such manufacturers
as General Motors, Ford, DaimlerChrysler, Honda as well as hundreds of

--Reporting by Steve Cronin,; Editing by Barbara Chuck,

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