Conservative EV advocates need to be realistic about the costs of the technology and how those costs have been buried by EV proponents
Fuel costs are often more, not less, than comparable CNG vehicles
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Patrick L. Anderson founded the consulting firm Anderson Economic Group in 1996. He is the director and CEO of this company, leading a team of experts with extensive knowledge of the automotive industry and of customers in every automotive sector. The company regularly updates its Automotive Dashboard, and there it released two editions of the report Real World Fuel Costs for Electric and Internal Combustion Engine Vehicles.
Mr. Anderson is an accomplished author and has written over 100 other published works, including The Economics of Business Valuation published by Stanford University Press. Five of his articles have won awards for outstanding writing.
Mr. Anderson also served as Deputy Michigan State Budget Director under Governor John Engler and Chief of Staff for the Michigan State Department, and has had a leading role in several major public policy initiatives in his home state, including his author of the 1992 Term Limit Amendment to the Michigan Constitution and the 2006 law that repealed the 4-decade-old State Flat Business Tax.
The recurring refrain in American politics is that wealthy liberals like electric vehicles, and vote for politicians who subsidize them, and want the government to order companies to make them. As a result, many conservatives have an almost gut reaction against ICE (internal combustion engine) cars.
We at the Anderson Economic Group argue that conservatives should neither love nor hate CNG cars. Instead, they should insist on one powerful principle: those who buy and drive EVs should do so with their own money. If you really want to shape public opinion, one of the most powerful weapons and one of the simplest is to let people see what’s worth how much.
Michael Fumento recently noted in a post the conservatives’ almost reflexive aversion to CNG cars. He argues that this is a mistake and that DHGs have advantages that should be recognized. We agree that reckless antipathy towards any technology makes no sense. But Mr. Fumento makes the same mistake he sees others make, equating the Anderson Economic Group’s cost benchmarks with the biased journalism that DWG promotes. As a co-author of these reports, I want to emphasize our guiding principle: we neither encourage people to buy electric cars, nor criticize them for doing so. Instead, we tell people what costs how much.
Anderson Economic Group’s recent EV study identified four categories of fuel costs for both EVs and CNG vehicles such as energy (petrol, diesel or electric); road excises; the price of the gas station or the charger; and the cost of driving to a gas station or to a charging station. Americans are well aware of these costs for gasoline and diesel-powered vehicles. They are also used to paying their tolls as part of the price of a gallon of gasoline or diesel.
But the same cannot be said for electric cars. The true fuel costs of these cars are unclear to most consumers because:
First, EV drivers need to consider the cost of energy consumed in home and commercial charging. This requires decomposing energy consumption across the charging source while accounting for complex tariffs and charges.
Second, consumers must also add the cost of the charger and its installation if they intend to charge their cars at home.
Third, electric vehicle owners avoid paying the federal tolls charged on the fuel. However, half of all US states now require a special tax on electric vehicles instead of the state tolls included in the price of gasoline and diesel fuel.
Fourth, drivers need to get to and from charging stations, especially when traveling far from their home area. Since they are far less common than gas stations, it is necessary to travel extra miles for this purpose, which costs time and money.
Fifth, many EV users view their charging as “free” because some commercial charging is subsidized by government agencies, utilities, and businesses. However, electricity and charging equipment are clearly not “free” and consumers need to understand how they pay for this service.
The AEG reports carefully add up and compare each of these categories, “apples to apples,” for the two vehicle types. Once hidden costs are factored in, we find that the fuel costs of EVs are often more, not less, than comparable CNG vehicles. Indeed, in 2021, a typical EV costs slightly more and a luxury EV costs less compared to comparable CNG cars.
For example, a consumer driving an average-priced EV with about 12,000 miles per year, who gets most of his energy at home, pays about $10.34 in fuel to drive 100 miles. Counting the same costs, a similar CNG vehicle costs approximately $10.79. For EV drivers relying on commercial chargers — such as those who commute a lot and those who can’t charge at home — the cost is closer to $14.34 per 100 miles.
This should come as no surprise. Charging and refueling equipment costs money, and electricity and gasoline are not free, and roads cost a lot to build and maintain. Driving an electric car or a CNG vehicle means incurring all the above costs.
Conservatives should welcome exercises like the Anderson Economic Group’s surveys that reveal the true cost of important consumer goods. We must also demand that the government stop subsidizing one group of buyers at the expense of others. In this, we can join liberals in one obvious demand: stop subsidizing car purchases with incentives that greatly benefit the rich. It should be shocking to see that 78% of federal EV tax credits went to Americans with incomes over $100,000. That means taxpayers who walk, bike, drive used cars, or take public transportation pay part of the bill for expensive electric cars bought by wealthy households. There is no justification for this in public policy.
Americans need to get more facts and less guilt when making their car buying decisions. To that end, Anderson Economic Group encourages readers to access our full report and learn about the real costs of driving EVs and CNG vehicles. We do not censor our results to suit the political wind of the day. Instead, we provide taxpayers and consumers with information that empowers them to make up their own minds.
Translation for “Labor” – Pavel Pavlov
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