Background: <=24¢/KWH
Yesterday I calculated the cost of running a Prius Prime on electricity versus gasoline. At the current U.S. average of $3.24 for a gallon of gas, electricity is the cheaper fuel for a Prius Prime if and only if it costs 24 cents per kilowatt-hour or less.
That calculation was prompted by the claim that in much of New England, it’s now cheaper to run a Prime on gas, rather than electricity. As it turns out, that’s true. As of September 2022, most of New England faced electricity prices that exceeded that threshold. (As did the average price in California.) I’m guessing that New England rates have gone up further since September, owing to a recent spike in the price of natural gas.
Source: US EIA.
In a previous rant (Post #1548), I had already noted how expensive public charging stations were. Not only did I find the one I tried to use to be both baffling and unreliable, you can pay anywhere from $0.50 to $1.25 per KWH for the privilege of using one. Even last summer, when gas was expensive, it was cheaper to buy gas for the Prius Prime than to charge the battery at the commercial charging station I visited.
I’ll note in passing that there didn’t seem to be anything unique about the Prius Prime in this gas-versus-electricity calculation. I did the same calculation for a PHEV Volvo getting gas mileage about half that of the Prius, and came out with just about the same break-even price for electricity compared to gasoline. The Volvo simply uses more of either gas or electricity per mile.
The upshot is that, at current gas and electric prices, some fairly large segments of the public will not see fuel cost savings from electric transport. At the moment, that’s pretty much the entire population of New England and California. (Though I did not factor in generally higher gas prices in California.) And, likely indefinitely, that includes people who can’t charge at home and so must use a commercial charging station.
How large? California and New England together account for about 14% of the U.S. population. More importantly, near as I can tell, about a third of U.S. residents live in something other than owner-occupied or single-family housing. Assuming those folks typically have no option other than commercial charging stations, that means at current gas and electric rates, something close to half of Americans will see electricity as a more expensive motor fuel than gasoline.
I’m a big believer in electric transport. But I wasn’t quite fully aware of the large fraction of the population for which there are no fuel cost savings in switching to electricity. Sure, eventually apartment buildings might all come with chargers. And sure, gas and electricity prices will vary over time. But right here, right now, electricity is the cheaper motor fuel for only about half the population.
Tesla? No thanks.
Which got me to thinking about a name that’s been in the news these days: Tesla.
When we were shopping for our last car, and eventually settled on the Prius Prime, we considered going fully electric. But I can’t recall giving even a moment’s thought to getting a Tesla. And offhand, I couldn’t quite remember why.
So I took a look.
Oh, yeah, it’s because I’m cheap. And because we buy our cars purely to be practical transport.
In any case, here’s the head-to-head comparison between the Prius Prime and the cheapest Tesla, the Model 3 rear-wheel-drive, courtesy of fueleconomy.gov
To boil it down, the cars are equally efficient as electric vehicles, and are the same size (same total interior volume). But the Tesla costs almost $20K more, and has less than half the range.
The Tesla is faster, for sure. But in Northern Virginia traffic, that’s more-or-less completely irrelevant. My zero-to-sixty time isn’t set by my car, it’s set by whatever pace the inevitable traffic dictates.
I’m sure there are some bells and whistles on the Tesla that you don’t get on a Prius Prime. But, to tell you the truth, I don’t much like the ones we got on the Prius. The very first thing I switched off, from the factory settings, was the automatic-steering function in cruise control. I guess if I’m driving my car, I want to be driving my car. Not having the car second-guessing where I want to be on the roadway.
And, to be fair, the Prius lacks snob appeal. It’s a pedestrian workaday vehicle, suitable for middle-class people who have some sense of concern for the environment. It’s also exceptionally cheap in terms of lifetime cost-of-ownership. Or so said Consumer Reports, at some point.
But with a Tesla, you can user their network of superchargers. And if you have to pay for that, you’ll pay an average of $0.28 per KWH. (That, per a 2021 article in Motorbiscuit.) And, duly noted, $0.28 > $0.24. So even with that dedicated network of branded charging stations, at today’s prices, you’ll pay more to fuel your car with electricity than with gasoline.
But the environment …
In America, we burn an average of 600 gallons of gasoline, annually, per licensed driver. (Calculated from this reference and this reference). Driving a Prius Prime, I’m guessing that my wife and I are down to maybe 25 gallons each, per year. (I have to guess, because we go so long between tanks that neither of us could remember when we last bought gasoline.) That’s the result of driving mostly on electricity, and otherwise driving an extremely efficient hybrid.
In theory, sure, we could reduce that 25 gallons down to zero by going fully electric. But, honestly, in the context of my fellow Americans, I can only feel but so bad about the 25 gallons. And that annual quarter-ton of C02 emissions from driving is probably not the worst environmental sin I commit.
But, as importantly, right now, one of the biggest constraints to electrifying the U.S. fleet is the lack of battery manufacturing capacity. All the majors are now going full-out to build more battery factories. There just are not enough traction batteries available to electrify the entire U.S. fleet, and there won’t be for years to come.
So the other way to think of the Prius Prime is that it makes efficient use of a scarce resource: EV batteries. The same amount of batteries that will build one EV Tesla Model 3 will build about eight PHEV Prius Primes. Those eight Primes, displacing standard gas cars, will have a far larger environmental benefit than that single Tesla.
Moreover, that big battery, in the Tesla, is mostly wasted, in the sense that the driver will rarely use the entire capacity of the battery. By contrast, the PHEV Prius Prime has a much smaller battery, that is fully discharged far more frequently.
From that standpoint, EVs are … wasteful. As long as lack of battery capacity is a hard constraint on electrifying U.S. transport, we’d get a lot more environmental bang-for-the-buck out of PHEVs than EVs. For the simple reason that a PHEV has a small battery, and uses it hard. While an EV has a big battery that is hardly used.
Bottom line: I just don’t see the fundamental value proposition in a Tesla. Which means, to me, that people by-and-large were not choosing it based on a simple dollars-and-cents calculation. And if image was a big factor in the choice, well, based on what I’ve been reading in the newspapers of late, Tesla may face some challenges moving forward.
