Or, How I lost $1,000 plus per year by plugging my car in!
Note: this was a question from a buyer considering the same car I am currently purchasing – A Rav4, 2026, which is available in a Plug-in Version. Will they – or you – save $$ by charging a PHEV (Plug in Hybrid) at Home?
Here are some calcs.
I’m going to do it as if it were me.
I have expensive electric (so do many!), however you will see that the cost of Electric is not the deciding factor.
Plug-in hybrid vs. regular hybrid: cost comparison
Would the plug-in cost more to own for one year? Change a few figures to see.
Assumptions and explanation from The Energy Primer
Regular hybrid: 42 MPG. Plug-in hybrid on gasoline: 40 MPG. Plug-in electric driving: 3.0 miles per kWh measured at the outlet, including charging losses. Additional plug-in insurance: $200 per year. These are illustrative figures, broadly based on a compact SUV; actual models and driving conditions vary.
The extra purchase price is used to estimate one year's cost of tying up that money at 5%. For example, 5% of $8,000 is $400 per year. The $8,000 itself is not added again to the annual result. This rate is an illustration, not a predicted loan rate or investment return.
*Some states or localities assess an annual vehicle tax or fee based on value. The checkbox estimates the additional cost of owning the higher-priced plug-in at $150 a year, not the total tax paid on the vehicle.
The comparison does not estimate resale value, actual financing costs or investment returns, maintenance differences, rebates, or changes in future fuel prices. The electric share represents miles driven using purchased electricity; it is not the vehicle's MPGe rating.
My own Situation…….below – which I calculated before I built the calculator.
Facts at Hand: The Plug-In version, including a basic charger at home (very basic) and extra Sales Tax, etc. will cost approximately $10,000 more than a lower Trim Level Hybrid.
1. Fact #1: Cost of Money – that same 10K earns 5% ($500 a year) in CD’s or 10% ($1000 per year in the Stock Market).
2. Fact #2: The Insurance Cost of the more expensive Rav4 will add about $200 a year to my insurance bill.
3. Fact #3: In MA, we have personal property taxes paid each year. It will cost me $200 or more per year more – the first year and also cost quite a bit more for a few years.
4. The Plug-In Model actually gets 2-3 MPG less than the Gasoline Version, so my car will cost more when running on gasoline.
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In total, the extra costs will be, in addition to the “sunk” money for the more expensive vehicle, in the realm of $1500 extra per year. When I sell the car used in 8-10 years I am very unlikely to get much of that 8K (extra car cost beside charger) back.
Now- Let’s see how much each mile driven on the gas – and electric – cost me.
https://theenergyprimer.com/compare-the-costs-per-mile-of-usa-passenger-vehicles-gas-or-electric/
Plugging it in at home (.33 a kWh) will cost me about .11 a mile driven. Buying gasoline at $4 (average over the years…it will probably be less!) will cost me 9.5 cents a mile. So I will LOSE Money on the plug in – beside all the extra money!
However, let’s say you pay 1/2 as much for Electric as I do and you drive 10K miles a year – 50% of them electric! You would then save $250. per year in fuel.
OK, so you get your electric FREE. You pay zero for the 5,000 miles, thereby saving $500. Congratulations- you lost only $800-$1000.
This does not include the lesser MPG of the Plug-in Model. It does not include any benefit you might feel if your Electric Grid is majority renewable (US Grid is less than 20% PV and Wind).
Also, it does not figure on future vehicles with Plug-in being available at a small or no up charge. If that were the case, it might provide a good “fuel insurance policy”, especially if a homeowner installed PV Solar on their own home.
In summary, however, the amounts of money being saved – in general – are not enough to offset the much higher costs of the Plug-In car being asked about (2026 Rav4 by Toyota).