2022’s final quarter brought relief at the pump for drivers of traditional internal combustion engine (ICE) vehicles as the cost to drive 100 miles dropped by more than $2.
With the cost for electricity also trending upward during the year, mid-priced ICE cars became more economical to fuel than their EV counterparts for the first time in 18 months, according to research from Anderson Economic Group (AEG).
“The run-up in gas prices made EVs look like a bargain during much of 2021 and 2022,” said AEG’s Patrick Anderson. “With electric prices going up and gas prices declining, drivers of traditional ICE vehicles saved a little bit of money in the last quarter of 2022.”
In Q4 2022, typical mid-priced ICE car drivers paid about $11.29 to fuel their vehicles for 100 miles of driving. That cost was around $0.31 cheaper than the amount paid by mid-priced EV drivers charging mostly at home, and more than $3 less than the cost borne by comparable EV drivers charging commercially.
Drivers of luxury EVs continued to a fueling cost advantage, regardless of charging method.
Findings by Vehicle Type
Mid-priced vehicles: In this market segment, fueling ICE vehicles was more economical than comparable EVs in the fourth quarter, regardless of charging primarily at home or commercially.
Luxury cars: Drivers of high-end EVs still enjoyed a significant fueling cost advantage, but the gap narrowed in Q4. Assuming mostly home charging, the cost benefit to fuel a luxury EV vs. a luxury ICE car dropped from $11.20 per 100 miles to $7.56.
Pickup trucks, entry-priced cars: ICE vehicles are still the only widely available options in these two segments.
Approach
Anderson Economic Group calculates all four categories of costs for fueling EVs and ICE vehicles across benchmarks representing real-world U.S. driving conditions, including:
- The cost of underlying energy (gas, diesel, electric)
- State excise taxes charged for road maintenance
- The cost to operate a pump or charger
- The cost to drive to a fueling station (deadhead miles)
All use cases reflect 12,000 miles per year, with the cost of residential charging equipment amortized over five years. Calculations are based on energy prices and taxes in the state of Michigan. Benchmarks for ICE vehicle drivers assume the use of commercial gas stations. For EV drivers, AEG considers both drivers who routinely charge at home and those who rely primarily on commercial chargers.
Source: AEG
