March 25, 2025 | Travis Madsen, Transportation Program Director
Full report coming soon…
Life of vehicle and electric vehicle tax rebate cost comparisons
Go here for full data comparisons.
Clik here to view.
Methodology
SWEEP researchers calculated potential vehicle lifetime savings for EVs using local driving patterns, prior research into gas and residential electricity rates, federal fuel economy data, and Atlas Public Policy’s Dashboard for Rapid Vehicle Electrification tool. We attempted to be as regionally-specific as possible, relying on Southwest vehicle usage, county fuel cost, and state incentives and fees for EV registration. However in some cases, namely insurance prices and loan interest rates, there was not sufficient public data available to aggregate generalizable estimates by state, so we defaulted to DRVE’s assumed rate ($600 per year for light-duty vehicles, $4,000 per year for medium-duty vehicles and 7.00% APR respectively). Hence, one’s actual savings may skew higher or lower depending on current insurance rates and credit health.
DRVE inputs and data sources
Fuel prices and driving demographic behavior data
The basis of our statewide fuel costs and driving behavior assumptions was derived from our previous research into county-specific residential electricity costs and annual vehicle miles traveled (VMT) data, for SWEEP’s EV Savings Tool.
Typical county VMT data was available through the Center for Neighborhood Technology’s Housing and Transportation Affordability Index, which compiles U.S. Census information. Average statewide VMT, weighed by county population, were then calculated and used in the DRVE input. Hence, annual VMT tended to skew lower than what may be typical in rural areas in which individuals need to drive longer distances to get to places (increasing maintenance and fuel prices, especially for gas vehicles).
Vehicle lifetime use was calculated by dividing the assumed vehicle lifetime VMT (200,000 miles max standard) by the state VMT average. It is important to note that contemporary commercial electric vehicles are believed to be able have the same if not longer lifespans than their gas counterparts under the right charging and maintenance conditions, meaning that our comparison is likely a conservative estimate of lifetime EV savings.
SWEEP researchers compiled the best available residential electricity rate for public, cooperative and municipally-owned utilities across the U.S. Southwest. We identified utilities using bundled residential utilities retail sales data from the U.S. Energy Information Administration. For each utility, we looked up residential rate information, and identified the best available rate for EV charging – whether a specific EV rate, a whole-house time-of-use rate, or a generic residential rate. For time-varying rates with seasonal variations, we annualized the rate assuming that the amount of charging would be the same every month year round. Statewide residential rates were then calculated using weighted averages based on county population data from the Housing and Transportation Affordability Index, the same source as the driving behavior data we relied on previously. In DRVE we followed a scenario in which 100% of charging takes place under the statewide average residential rate, assuming optimal charging behavior for our EV cost of ownership analysis.
We took a snapshot of statewide gasoline prices from the AAA Fuel Price Index on February 11th, 2025. DRVE uses information from the U.S. Energy Information Administration to calculate estimated fuel inflation during the vehicle’s lifetime. Regional gas prices may differ, with higher prices increasing the net EV savings and vice versa.
Fuel economy data
Fuel economy data for both EVs and combustion engine vehicles was obtained from the Department of Energy and Environmental Protection Agency’s Find A Car vehicle catalogue. Both city and highway fuel economy data was used, with DRVE assuming a CC/HW ratio of city to highway driving
Vehicle selections
When selecting vehicles for cost of ownership comparisons, we identified highly comparable EV and gas models of a similar type (sedan. SUV, pickup truck, truck SUV), whether the vehicle was eligible for the federal tax credit, the manufacturer’s suggested retail price (MSRP), and the vehicle’s popularity. We relied on DRVE’s gas vehicle fleet data when identifying gas vehicles to compare with our EV selections, unless there was a case in which there was a more appropriate gas model available. For example, rather than compare the Ford F-150 Lighting Pro pickup truck to the Chevrolet Silverado, as DRVE auto-selected, it made more sense to compare it to a gasoline powered Ford F-150. The make an model for the total cost of ownership calculations are as follows:
- 2024 Toyota Corolla (gas sedan)
- Tesla Model 3 RWD (electric sedan)
- Ford Explorer RWD (gas SUV)
- Honda Prologue EX FWD (electric SUV)
- Ford F-150 2WD (gas pickup)
- Ford F-150 Lightning Pro (electric pickup)
- Jeep Wagoneer 2WD (gas truck SUV)
- Jeep Wagoneer S (electric truck SUV)
Since the state of Colorado has additional EV tax incentives for the purchase or leasing of vehicles under $35,000 MSRP, regardless of meeting the domestic manufacturing and mineral sourcing requirements for the federal EV tax credit, SWEEP decided to analyze additional EVs with more affordable purchase prices. The vehicles under $35,000 MSRP chosen are as follows:
- Chevrolet Bolt EV ($26,595 MSRP, qualifies for federal and state credits)
- Chevrolet Equinox EV ($34,995 MSRP, qualifies for federal and state credits)
- Nissan LEAF S ($29,280 MSRP, qualifies for state credits)
- Hyundai Kona Electric ($34,270 MSRP, qualifies for federal and state credits)
We relied on MSRP information from Car and Driver’s pricing index, and selected the cheapest available EV and gas vehicle to compare. DRVE includes a standard 2.0% annual inflation rate (based on the Federal Reserve’s inflation target), which impacts maintenance and operating costs over time.
Fuel economy data
Fuel economy data for both EVs and combustion engine vehicles was obtained from the Department of Energy and Environmental Protection Agency’s Find A Car vehicle catalogue. Both city and highway fuel economy data was used, with DRVE assuming a CC/HW ratio of city to highway driving.
Purchasing and leasing assumptions
MSRP was sourced from Car and Driver’s Pricing Index, which are derived from the manufacturer. Given that loan rates and procurement varies so much between individual consumers, we did not think that it would be feasible to analyze every potential procurement option, and instead we relied on DRVE’s purchasing assumptions, which assumes upfront full-price cash purchases. Thus real savings may differ slightly, however given that EV and gas vehicle loans operate the same, there’s likely to be significant differences in savings beyond residual interest.
Leasing information was provided from multiple local dealerships, confirming that the federal EV tax credit was directly applied to negotiating residual value for each individual lease term at the time of financing. While DRVE does have a lease function, similar to the customization issue with identifying differences in loan costs, we assumed leasing cost-savings based on qualifying tax credits to be the best generalization of savings.
The post Tax credits are good for Colorado first appeared on Southwest Energy Efficiency Project.