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Electric car economics are showing some sparks

Latest MoneyWatch headlines
Latest MoneyWatch headlines 01:03

Pushed by federal regulations, automakers are spending billions to develop new all-electric cars. But with gas prices staying relatively low, consumers aren't buying the electric offerings available now.

17 cars you can own for under $300 a month
17 cars you can own for under $300 a month

Except for the glamorous and expensive Tesla Model S, electric vehicle sales for the first half of 2016 are down 11 percent, according to Kelley Blue Book. (Tesla doesn't report monthly sales, but estimated Model S sales are about even with last year.)

However, the major drawbacks for electric cars -- limited charging stations and modest range before a new charge is needed -- may be changing due to new models and a new federal initiative. And with used electric models selling very cheaply, an electric vehicle can be a money-saver for some commuters even in an era of low gas prices.

Here are some of the coming developments.

Federal initiative. The Department of Transportation announced last week that it would use up to $4.5 billion in loan guarantees to spur creation of a national network of fast-charging stations for electric cars. The plan also involves creating a coalition of automakers and utilities to get behind this effort, and it will promote cooperation from state and local governments.

Affordable long-range electrics. Going on sale late this year, the Chevrolet Bolt will be the first affordable electric with a range of about 200 miles before it needs recharging. (The $70,000 and up Tesla Model S is currently the only electric car meeting that standard). Chevy is likely to price the Bolt below $40,000. Buyers will get a $7,500 federal tax credit and additional state and local incentives in some places. In late 2017, Tesla will start selling the Model 3, around the same price and with 215 miles of range.

To see what motivation extra range can be, consider the year-to-date sales of the Chevrolet Volt, often described as an electric car but also featuring a backup gasoline engine. Sales for the newly redesigned 2016 Volt are up 75 percent for the first half of this year. That new Volt can go an estimated 53 miles on battery before needing to be recharged.

But when the backup gasoline engine kicks in, total range is 420 miles. The federal website estimates that the 2016 Volt would save you $3,500 in fuel costs over five years vs. an average new gas-only car.

Cheap used electric cars. As new electric car sales have dropped, resale values for used electrics have plummeted. After surveying used-car sales, reports that the average price of a one- to three- year-old Nissan Leaf is just $12,533. It cost nearly $30,000 new, even after federal tax credits.

Writer Sami Grover on the environmental site recounted his adventures after buying a used 2013 Leaf. It has an estimated range of 84 miles before a new charge is needed. Grover noted that the range of his Leaf can drop greatly if it's driven aggressively or with extended highway driving.

Still, the website estimates savings of $4,000 over five years for that Leaf compared with the average 2013 car.

Based on Grover's experience and other expert advice, here are some suggestions if you're considering following his example with a used Leaf or other electric.

  • Compute your daily mileage carefully. If you're close to the national average of a 30-mile round-trip daily commute, you should be fine with recharging the car every night even if you run some errands as well. But if you have a longer commute or live out in the country where long drives often are necessary, the electric car math likely won't work for you.
  • Buy a home charger. If a plug is convenient to where you park, you can recharge your electric with a regular AC outlet. But it will usually take eight hours or more for a full charge. If you buy and install a 240-volt level-two charger at home, you can cut that to four to five hours. The cost to buy and install such a charger should run $1,500 or less -- depending on the difficulty of installing a new circuit.
  • Keep a gasoline car for longer road trips. The day will come, most likely, when electric cars will work well for all purposes. But for now a gasoline engine is your best bet for taking that drive three states away to visit relatives or see a national park. Even if you can find fast chargers on the road (and you usually can't), it takes 20 minutes to recharge -- much longer than a gas station fill-up. Of course, if you've been driving an electric car for daily commuting, you have saved plenty of money to buy gas for that road trip.
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