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The Problem With The eGallon


The Department of Energy wants you to drive electric vehicles.  So much so that they are willing to fudge the numbers in favor of electric to convince the public.   The DOE recently released a metric they call the eGallon; a tool apparently meant to shame the troglodytes among us who are still driving gasoline powered automobiles into realizing how much money we are wasting. 

Admittedly, the numbers they published were impressive – and news outlets everywhere ran with the ready made headline.   “Save $2.78 per gallon by switching to an electric vehicle”.  “Fill-up costs for Electric Vehicles 1/3 that of gas”.

The problem with all of this is that the DOE’s eGallon calculation is flawed, incomplete, and misleading.

First a look at the DOE’s methodology:

On the surface, the eGallon is an attempt to normalize the cost comparison between fueling gasoline powered vehicles vs. fueling electric vehicles.   It’s a good premise; but poorly executed.

The DOE started by looking at the average fuel economy of 2012 traditional autos (28.2 miles per gallon).  They then calculated the amount of electricity required to drive an average EV that same distance. Electricity rates are different in every state but the national average price for an eGallon was $1.14 as of 6/10/2013.

The DOE’s calculation for eGallon is fine as far as it goes.  But it doesn’t go far enough.   The fuel cost for an electric vehicle actually has two components – electricity and battery replacement costs.  By some measurements, the battery costs could be almost twice that of the actual electricity.

There are other factors to consider as well.  The gasoline price the DOE published by way of comparison to the eGallon includes as much as 69 cents per gallon in taxes.    These taxes don’t represent a fuel cost.  They are used for road and bridge maintenance among other things.   They have nothing to do with the cost of fueling the vehicle.  They skew the numbers and distort a true comparison of fuel costs.

An adjusted eGallon calculation would take these additional factors into consideration and paint a truer picture of the fuel cost of driving an electric vehicle. Unfortunately, when you do this the story that the DOE is trying to tell with its eGallon concept is turned on its head.  It turns out that the true eGallon rate may actually be higher than a gallon of good old-fashioned regular unleaded gasoline.

Certainly there are benefits to switching to electric vehicles both for the individual consumer and for society as a whole.  But the case for electric should be made without resorting to misleading half truths.

In certain cases and for certain consumers EV over gas makes sense today.  As technology improves and costs come down the financial case for EV will be made more clear.  

Switch the EV if you want to do something positive for the environment.  Switch to EV if you think it will help promote U.S. energy independence.  Switch to EV if you think the Chevy Volt or the Nissan Leaf is cool.  Don’t switch to EV if you are hoping to save money.  You won’t.