Does a greener car mean more green from your pocket?

The popular frenzy around plug-in vehicles (PEVs) drives lots of excitement around the benefits they bring, but the enormous sticker price leaves consumers shocked. And that may be an understatement, because the first generation of plug-in vehicles cost a whole more more than their internal combustion engine (ICE) counterparts.

According to CNN's Money magazine, "A good rule of thumb is to plan on spending 10 percent to 15 percent of your total monthly budget on all automotive expenses."  This probably puts leasing the $850-per-month BMW miniE out of most of our budgets.  Granted, the first generation of any technology will be prohibitively expensive for most consumers, and most experts are projecting battery costs, a key driver of the premium, to drop in the future.

On the other hand, it is quite cheap to "fuel up" a PEV from the power supply in your garage, and based on early reviews, PEVs are fun to drive. The societal positive benefits include potential to:  Drastically reduce our foreign oil dependency, combat global warming by reducing green house gases, and serve as a key enabler to a nationwide smarter and greener grid with more renewable energy. So for those people who still do want to consider buying a plug-in vehicle in the near future -- does it make sense financially? 

Nobody wants to hear, "it depends," but it really does depend: Multiple unknown or driver-specific factors affect the economic benefit of driving a PEV versus an ICE-powered vehicle including how long you own or lease a vehicle, gas prices, resale value, how often and far you drive, when and where you recharge it, and federal incentives among others.

To help make clearer decisions, Rocky Mountain Institute as part of Project Get Ready has created a Total Cost Comparison Calculator for people to estimate the financial implications of taking the PEV plunge. Given your best estimates, you can replace the magic with math and get a rough idea on how much it will cost or save you to make your next vehicle a PEV. 

The calculator will also provide you information on how much oil, carbon dioxide, and fuel costs will be saved between different vehicle comparisons. More options are available to advanced users who would like to adjust other factors -- such as PHEV driving and charging scenarios, the price of diesel gasoline, resale value, and maintenance costs. 

Given an average consumer, what really contributes to breaking even on a PEV?  Like most big investments, focus on the long run and the most important factors: How long will you own the car, what is the sticker price difference, and will I make up that difference in my annual running costs? 

PEV prices will change and new vehicles will come out. We plan on updating the calculator as we learn more information and hear your comments. The next challenge may be finding charge stations outside of your home, and RMI is working to assess the business case for stakeholders considering investments in PEV charging station infrastructure.

Visit the Total Cost Comparison Calculator.