How Much Could an Electric Vehicle Save You?

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A Tesla Model S charging. Parco Valentino car show hosted 93
Marco Destefanis/Pacific Press/LightRocket via Getty Images
Buying an electric vehicle has become something of an aspirational purchase for those looking to go green, but it's no longer only feasible for those willing to spend a fortune in the name of saving the Earth. It could actually be a way to save money on how you get around, especially as new, cheaper models come out over the next few years.

On a per-mile basis, the savings can add up quickly. Take a look at just how much you could save on a monthly basis.

Gasoline Savings Add Up

If you're the typical driver who puts 15,000 to 20,000 miles on your car a year, it wouldn't be uncommon to spend $150 a month or more at the gas pump. Depending on how efficient your vehicle is, the cost could be significantly more than that.

But electric vehicles use low-cost electricity, which can lead to significant savings each time you fill up. Below is an example of just how significant those savings can be.

If we assume the national average $2.79 a gallon of gas as of this writing and an average cost of electricity of 12.64 cents a kwh, here are the costs to travel 265 and 20,000 miles in a Telsa Model S, a BMW 3-Series, and a Ford Fusion Hybrid.

Measure Tesla Model S BMW 3-Series Ford Fusion Hybrid
Range/mpg 265 miles 32 mpg city 44 mpg city
Cost to travel 265 miles $10.74 $23.10 $16.80
Cost per mile 4.05 cents 8.72 cents 6.34 cents
Fuel Cost to Drive 20,000 Miles $810.56 $1,743.40 $1,267.92
Source: Company websites, author's calculations
For someone who drives 20,000 miles a year, the Tesla Model S could save $934 in fuel costs annually versus the BMW 3- Series. Even against a Ford Fusion Hybrid, the Model S would save $457.36 annually.

Add to that the savings of not having to change the oil ($30-plus every 3,000 to 6,000 miles) and even the added cost of buying an electric vehicle may not be all that daunting. But even that hurdle isn't as big as it once was, as the cost of electric vehicles is coming down.

As the Cost of EVs Comes Down, the Market Should Explode

Today, a Model S is significantly more costly than a BMW 3-Series, which I would say is a close competitor given the performance and finishes of each. The Model S starts at $75,000 ($67,500 after the $7,500 federal tax credit) and you can get in a 3-Series car for $32,950; the Ford Fusion Hybrid starts at $25,990. At those prices, even the fuel savings I've outlined above wouldn't make up for the added cost of an electric vehicle.

But the market will change in the next few years as more electric models are released. Tesla's Model 3 is expected to cost $35,000, while the Chevy Bolt will start at $38,000 and the Ford Focus Electric starts at $29,170, although it has just an 80-mile range. The clear trend is that electric vehicles are coming down in cost and they'll only be more competitive in the future.

Time to Think Electric

Depending on your personal situation, an electric vehicle might not be right for you. But it's becoming more and more clear that cost isn't going to be what holds back electric vehicle sales. In fact, many people could save money by going electric, simply because electricity is such a cheap source of energy.

Maybe fuel savings are something to consider next time you go car shopping. And it's probably time to look beyond mpg to miles per kwh the next time you look at a car.

Motley Fool contributor Travis Hoium owns shares of Ford. The Motley Fool recommends BMW, Ford and Tesla Motors. The Motley Fool owns shares of Tesla Motors. Try any of our Foolish newsletter services free for 30 days. Check out our free report on one great stock to buy for 2015 and beyond.
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