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By Russ Finley on Dec 30, 2013 with 14 responses

Volt’s 5-year ownership cost is much cheaper than Prius?

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Five Year Ownership Costs for a Chevy Volt

Like a lot of headlines, the one I chose for this article isn’t true. I borrowed it from a website I found in a link in another article called True Cost Of Owning A Chevy Volt Might Surprise You.

When I went to the same Edmunds Cost To Own website used by the original article and plugged in my zip code and quotes from my own insurance company, I found the following out-of-pocket expenses including purchase price after five years at 15,000 miles per year:

Volt =     $57,974 – $7,500 = $50,474

Leaf =     $50,501 – $7,500 = $43,001

Prius =     $44,876

Cruze =   $44,328*

Versa =   $39,941*

*The Volt and Leaf are derived from the Cruze and Versa models respectively.

So, no, the Volt’s five year ownership cost is not much cheaper than a Prius, and neither is the Leaf’s. An inexpensive economy car is still the cheapest way to go if your overarching concern is cost. The adage “the most environmentally friendly car is the one you already own” is also still true. Buying a new car every five years may be good for car dealers, but not so much for the environment.

I was surprised to see that the Prius only costs $324 more per year for energy than a Volt and that the Leaf only costs $126 less for energy per year than the Volt ($450 less per year than a Prius). The Prius used about half as much fuel as the Cruze and Versa.

Some cities give a significant electricity rate discount to electric car owners if they charge them at off-peak hours. Using an Indianapolis zip code instead of a Seattle one for example would drop the five year fuel costs for a Leaf from $3,562 to $2,202. On the other hand, Indianapolis gets its electricity from coal, so an electric car there still has about the same carbon footprint as a Prius.

I realize that this is a relatively unimportant topic, but years ago an automobile research company published a study claiming that the Prius actually used more lifetime energy than a Hummer.

wrote an article about that study in Grist but it was too late. The story was making headlines all over the place. I thought I’d jump on this one before it got loose.

In hindsight, the Hummer/Prius study proved to be wrong because of an assumption they made when trying to predict a future trend. Assumptions about the future are the most powerful tool we have to bias a study in a direction that suits us.

They assumed that Hummers would be driven for far more miles in their lifetime than a Prius. They might have been right had they been comparing a Hummer to a Pinto but I recently rode in a Prius taxi with over 400,000 miles on it.

My intent wasn’t to knock the Volt or Leaf. It was simply to correct misleading information before it hit the internet echo chamber. I’m fortunate to live in a time in modern history where I could buy an affordable, practical, electric car produced by a major automobile company. Hopefully, the cost of these cars will soon drop low enough to compete with other economy cars on cost. They are not there yet.

  1. By Ben on December 31, 2013 at 11:01 am

    RF

    I dare say this is important given the (adverse) impact of transport fuels on our overall energy requirements. Improvements in this market segment are a critical component of efforts to improve upon our reliance on fossil fuels and foreign sourced supplies.

    Expert and unbiased analysis of the quality that you’ve consistently provided in this space helps inform the understanding of consumers to make wiser judgments about resource allocation. On that note, it is not unlike your advocacy for the preservation of natural diversity; there is an enlightened self-interest in protecting feedback loops that ultimately sustain all of life. Taking the long view of things really is the essence of the whole exercise and for your emphasis on such a sensibility, well, we shall remain in your debt.

    I’m anticipating a substantial drop in EV costs within the next few years. That will lead to major market penetration further bolstered by local policy initiatives will add inducements to the adoption of much lower carbon footprint vehicles.

    Happy New Year to you and to all ETI readers.

    Ben

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    • By Russ Finley on January 1, 2014 at 9:33 pm

      Got my fingers crossed …price down, range up.

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  2. By bill on December 31, 2013 at 12:06 pm

    The Volt is derived from the Cruze? Wrong Better do some better investigating. The Volt came out before the current Cruze and is a very different car.

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    • By Russ Finley on January 1, 2014 at 9:12 pm

      Thanks. I’m also not so sure how much the Leaf shares with the Versa. Cars tend to share components to save costs so its a matter of degree I suppose. According to Wikipedia, when describing how and why the final version of the Volt varied from the original concept car:

      Another reason was the use of General Motors’ new global compact vehicle platform Delta II to keep costs reasonable, and shared with the 2010 model year Chevrolet Cruze.

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  3. By Jack Bacon on December 31, 2013 at 11:34 pm

    I don’t know where they’re getting the $750 a year fuel cost. We just got one and in the first 5000+ miles and 6 months we’ve used 4.6 Gallons of fuel. Works out to about $20. At this rate we’ll wrap up the year at less than $50. Until the competition comes up with a competitor that can run 40+ miles on battery only the Volt is in an untouchable class of its own for the price! GM did their homework on the 40 mile average daily roundtrip for the average family car. The Prius at 13 battery miles is a joke. And don’t forget, while you’re sitting in rush hour traffic at a standstill the only power you’re using is for system computer, radio and heat/AC which is minimal. And every time you brake for a slowdown the ReGen system puts that inertia back into your battery.

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    • By Russ Finley on January 1, 2014 at 9:21 pm

      I’m with you. I don’t know how they derived most of their numbers and wouldn’t bet my first born child on them.

      They were comparing it to a standard Prius, not a plug-in Prius. But you bring up a very good point. There may be a reason they didn’t compare the two. Their program assumes you sell the car at the end of five years and so the resale price has a huge impact. If the Plug-in Prius has much better resale value, it might save more money than the standard Prius, assuming you sell after five years.

      That’s why I substituted my own insurance quotes in for theirs. I also assumed the car would not be sold after five years, in part, to eliminate the educated guess about resale value five years from now.

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  4. By Steve Funk on January 9, 2014 at 6:28 pm

    Cash price does not directly figure into ownership costs. Instead, you need to estimate depreciation (difficult on a new model) plus Plus the cost of having your own money tied up in car equity instead of an interest bearing investment. Alternatively, you could just use the lease cost.

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    • By Russ Finley on January 9, 2014 at 10:40 pm

      The Edmonds site does make an educated guess about depreciation. I eliminated the guesswork by assuming the car was not sold after five years. Resale values are presently being hurt by the $7,500 tax credit for new cars. If there is a superior battery replacement for a reasonable cost in five years, the resale value of these cars could be huge.

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      • By Nick G on February 10, 2014 at 6:50 pm

        Including the full purchase price of the car in the “5 year” cost badly overstates the cost of the more expensive cars. That’s why Edmunds uses depreciation – it’s the right way to do the analysis.
        This analysis makes the Volt look much more expensive than it really is. If fuel gets more expensive used Volts will rise in value and depreciation will fall – that would make a Volt an even better buy.

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        • By Russ Finley on February 11, 2014 at 12:29 am

          Including the full purchase price of the car in the “5 year” cost badly overstates the cost of the more expensive cars.

          If you don’t sell your car after five years, that total cost is how much you have invested in that car. End of story. You have an argument only if you sell your car, and the second you buy one to replace it, you are in the hole again. It’s all about giving consumers an excuse to go out and buy another new car.

          The most common way to bias any study is through “predictions” … things like future costs. Only time will tell if five years from now consumers will pay that much for a four seat car that will by then have an electric range similar to that of a Prius plug-in and gets 25% worse gas mileage than a Prius plug-in.

          If fuel gets more expensive used Volts will rise in value and depreciation will fall – that would make a Volt an even better buy

          It isn’t that simple. The Volt’s electric range continues to drop with age, meaning that a Volt driver will be using more gas.

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  5. By Jacob White on January 21, 2014 at 10:20 am

    Hey, thanks for the comparison! As a suggestion, I think that you should discount future costs to present value – the relative position of the Volt to the Prius probably won’t change, but it would help with the sticker shock of 5-year values.

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  6. By Glen Gibellina on January 27, 2014 at 3:39 pm

    Your 57K is way out of line. New volts are 34,185 MSRP and invoiced at 32,818. Did I mention the Volt comes with a 8 year 100,000 warranty. Please provide accurate numbers in the future. http://usnews.rankingsandreviews.com/cars-trucks/Chevrolet_Volt/prices/

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  7. By Glen Gibellina on January 27, 2014 at 3:43 pm

    Your 55K is way out of line the MSRP: $34,185 and Invoice: $32,818. Now take another 7500 tax credit off and your down to 25K less than 1/2 of your estimate. That and the Volt comes with a 8 year 100,000 mile warranty. Please be more accurate in your reporting. http://usnews.rankingsandreviews.com/cars-trucks/Chevrolet_Volt/prices/

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    • By Russ Finley on January 27, 2014 at 9:55 pm

      I don’t see a 55K number anywhere. The Total Cash Price came from Edmunds, not me. It depends on model year and your zip code. See their definition below.

      It isn’t real clear what the Volt warranty covers. Read:

      Testing the Electric Car Battery Warranty Waters

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