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Ever wondered why the eGallon Calculator is so useful? Well, we wanted to provide the essential knowledge that people should know about it, so we wrote a comprehensive guide about it, which details its features and how it can be of benefit. Since 2013, the United States Department of Energy has been using the eGallon as an important metric to determine how affordable it is to drive an electric vehicle, supported by the eGallon calculator that automatically determines the real cost of ownership.

This is a key aspect of determining whether or not electric vehicles make financial success for consumers – at present, they’re still significantly more expensive to own than gasoline vehicles. In this guide, we’ll take a look at some basic metrics, how the eGallon is actually calculated, and what you can do to bring costs down for yourself.

Understanding the Costs of Fuel

City and Highway Mileage has always been one of the most important metrics for vehicles – better mileage means it takes less gas (i.e. money) to travel the same distance. Since internal combustion engines are significantly more efficient around the 60-mph mark, highway speeds are separate from the gas-intensive stop-and-go of city driving.

People have different driving habits, so there are actually three estimates you’ll need to consider when calculating the cost of fuel: city, hybrid (average of city and highway), and highway. All of these have the same basic calculation, but they use different numbers.

The calculation itself is (distance divided by mileage) times the current price of gas. As an example, let’s take a look at the costs of driving with a gas price of $2 per gallon with efficiencies of 20 miles for city driving, 25 miles for hybrid driving, and 30 for highway driving. For simplicity’s sake, we’ll be driving 10 miles.

  • City: (10/20) = 0.5 * $2 = $1.00
  • Hybrid: (10/25) = 0.4 * $2 = $0.80
  • Highway: (10/30) 0.33 * $2 = $0.66

As you can see, our 10-mile trip costs about 34 cents less if we’re traveling at highway speeds. The difference in price is small for any given tri but adds up to a significant amount of money if you spend a lot of time on the road.

Electric vehicles (EVs) do not use gasoline. Instead, the eGallon is calculated by the amount of electricity needed to move an electric vehicle the same distance. As explained on the Department of Energy’s Gas vs Electric car calculator, the cost to drive an electric vehicle is about half that of a gasoline-fueled competitor. For more exact results, you can use the eGallon calculator to check the relative costs in your area.

The Big Question: Is It Affordable?

Electric vehicles are generally more expensive than gasoline-only vehicles, so the cost to buy or lease them is higher. However, since they’re also less expensive to actually drive, there’s a potential for savings there. In short, electric vehicles make financial sense when the reduced cost of driving outweighs the increased cost of ownership. The more you drive, the more likely it is an electric vehicle makes sense for you.

The Problem with Comparisons: Spiking Gas Prices

It’s easy to calculate the relative prices of gasoline and electricity at any given moment – but as we all know; the price of gasoline can fluctuate wildly throughout the year. Prices tend to be higher in the summer and lower in the winter, but international events – including wars – can have a major impact on the price of gasoline.

Since nobody can predict exactly what the price of gas will be in the future, there’s no way to make a perfect comparison of how much you stand to gain (or lose) by using an electric vehicle. However, it is possible to get an estimate. By looking at gas costs over time and averaging it to filter out short-term events, we can get a good idea of the expected future costs.

That’s more in-depth than most consumers really need, though – the important question is whether an electric vehicle makes financial sense at all. If so, calculating any further is just a way to find out how much of a benefit you’ll receive.

The Benefit of Electric Vehicles: Stable Fuel Prices

Unlike gasoline prices, electricity costs are generally stable throughout the year, dipping a little in winter and rising in the summer by small amounts. If you know how much time you spend on the road, this makes it much easier to calculate the cost of electricity for your vehicle and use it as a reference point for gasoline prices.

There is, of course, one catch: while prices for electricity are stable overall, they vary wildly throughout the day. Electricity is most expensive during business hours when manufacturers and large employers are busy. On the other hand, electricity is much cheaper during low-demand hours, such as just after midnight.

In other words, when you charge your vehicle is just as important as its efficiency for determining the actual cost of ownership. Low-demand charging in states with low electricity costs (like Washington state) means paying almost nothing for electricity while charging during high-demand times in high-cost states like Hawaii means electric cars may actually be significantly more expensive than a gasoline vehicle.

What You Can Do to Bring Costs Down

The easiest way to reduce the cost of owning an electric vehicle is to only charge it during low-demand periods. Overnight, at your home, is usually the best. Of course, this means that you’ll need to have a vehicle with enough range to support any daily round-trip needs, as well as any other excursions you may want to do.

Here are some other ways you can control costs.

Green Loans

Some banks offer better loan rates on “green” (environmentally friendly) items. This can soften the monthly payments or – in some areas – even be the deciding factor in whether or not an electric vehicle is financially sensible for you.

Banks don’t always advertise these rates, so consider shopping around. You can ask dealerships for a list of banks offering good rates, but don’t limit yourself to that list. In addition, look at credit unions as well as banks – they may have lower fees and better rates.

The Best Charger

In most cases, you’ll need to buy a home charging station yourself. Which station you’ll need to get depends on your vehicle and how fast you need it to charge. While they can cost more than $1000 from popular retailers like Amazon, local energy providers often offer rebates (valued at hundreds of dollars) for efficient charging stations. Be sure to ask about any incentives they’re currently offering.

Insurance Rates

Unfortunately, owning an electric vehicle or an at-home charging station can affect your insurance costs. This is especially true for the chargers, which may not be covered by your normal plan and could require additional liability coverage. Speak to your insurance company to find out how they treat electric cars.

As electric vehicles become more popular, we expect to see their costs wrapped up into normal insurance packages. Until then, talk with your insurance agent about your plans and see if there’s any way to mitigate – or even eliminate – any extra charges. You may need to switch providers to get the best deal.

Resale Price

Electric vehicles are advancing quickly, and new models tend to have significantly better features – they aren’t just tweaked versions of the previous year’s release. That creates a problem for resale prices, which have tumbled down fairly far.

Before leasing or purchasing an electric vehicle, use resources like the Kelley Blue Book to get a better sense of what your car will be worth when you expect to trade it in. Remember that most electric vehicles are designed to last for a long time with minimal maintenance required – which lowers the costs – but also that they’re more expensive to fix if you get into a collision.

Battery Replacement

Finally, there’s one major charge that could affect your total cost of ownership: replacing the battery. In an electric car, this is its lifeline. Think about how important an engine is to a car that runs on gasoline. That’s the importance the battery is to an electric car. Knowing that, you can expect to find that the price of a battery on an electric car is more than the standard battery that you find on a regular car. The large lithium-ion batteries used in electric vehicles are expensive, and a total replacement could cost $5,000 or more. That’s enough to wipe out quite a lot of the benefit of lower fuel prices, although there are a few silver linings here.

First, as electric vehicles become more popular, the price of batteries is expected to drop substantially. Most electric vehicles have batteries good for at least 10 years, which is enough time for new, low-cost replacements to reach the market.

Next, many of these batteries are useful beyond their lifespan in vehicles. Some locations are buying old batteries to provide backup power for energy grids, and as more and more EV batteries enter the market, more people will be interested in old batteries.

Finally, some manufacturers allow you to lease the battery instead of owning it. This means it’s their problem if the battery’s usefulness drops below acceptable levels.


The eGallon Calculator is a vital first step in determining whether or not an electric vehicle makes financial sense for you. However, while you should definitely check it, the calculator is not the only major cost involved. You also need to consider the other factors we discussed above.

It’s important that you take all the aspects into consideration to determine if an electric vehicle is worth your while. We have mentioned pretty much everything that should be considered, but we cannot make that decision for you. Consider everything.

Then, and only then, will you know if owning an electric vehicle is worth it.

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