With gas prices so high, is it time to think electric?*

nissanleaf.jpgNot unless you're planning to keep the vehicle for many, many years. It's true that operating costs for all-electric cars are way lower than what you would pay for a gasoline-powered vehicle - 22 cents per mile for the Nissan Leaf, writes LAT editorial writer Dan Turner, who used an online calculator from the Energy Department. (Operating costs cover electricity, maintenance, insurance, license, and registration per mile traveled.) The Prius hybrid was next cheapest, at 29 cents per mile, followed by the Ford Focus (33 cents). The problem with electric cars - and one of the reasons marketers are having such a hard time drumming up interest - is that you're paying a lot more up front. From the Times:

Also interesting is a DOE chart that shows the cumulative cost of ownership per year for my eight models, from year one of ownership to year 15. This is helpful because it's not just about fuel costs; it also considers the purchase price, assuming buyers took out a five-year loan with a 10% down payment, as well as the costs of registration, insurance, maintenance and other factors. And on this measure, the economy cars -- the Ford Focus, Mini Cooper and, very surprisingly to me, the CR-V -- start to look more attractive. Until year 12, in fact, the Focus is the cheapest car to own on the list; that's when the superior fuel savings of the Prius finally make up for its higher purchase and other costs. Given that few Americans keep a car for 12 years, that makes the Focus, which gets 38 mpg on the highway, a more economical choice than a Prius for most people. As for the Leaf, it does, eventually, make up for its higher upfront cost: Its cumulative cost of ownership finally matches the Focus and the Prius at year 15.

By the way, you might be hearing all sorts of of gloomy predictions about how gas prices will stay crazy high for weeks, even months. Truth is, no one knows. I'm doubtful that the $5+-a-gallon gas will last long - a week, maybe two. There's actually some give in the production process, especially if government officials intervene. And this week's spiking of wholesale prices is largely the result of panic buying, and that's unlikely to continue. Of course, any return to normal prices really depends when they can repair the refineries that are out of service.

*Update: Times just ran a correction. Original item neglected to factor in the $7,500 federal tax credit in determining the cumulative costs of owning and operating an electric vehicle. For a lower-priced car like the Leaf it can make a difference; for higher-priced cars like the Tesla, not so much.

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Mark Lacter
Mark Lacter created the LA Biz Observed blog in 2006. He posted until the day before his death on Nov. 13, 2013.
Mark Lacter, business writer and editor was 59
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