Electric vehicles (EVs) continue to struggle to gain a foothold in the mainstream vehicle market. For many potential buyers, EVs are too expensive, come with uncertain technology (like battery life), aren’t available as more popular models, have a short driving range—the list goes on. But these obstacles are slowly fading: buyers are becoming more familiar with the vehicles, and EV prices have been coming down as more affordable models enter the market, battery costs fall, and new technologies emerge for battery re-use. EVs are making progress, but limited driving range—often thought to give buyers “range anxiety”—continues to be one of the major hurdles preventing the penetration of EVs into the mainstream market.
In considering vehicle driving range, buyers need to take stock of two components: One is the availability and ease of refueling infrastructure. The second is the number of miles the vehicle can travel without being refueled.
Let’s look first at refueling infrastructure. Gasoline vehicles are the common point of comparison for potential EV drivers. The United States has about 150,000 gasoline stations and about 50,000 public EV charging stations. The time it takes to charge an EV at fast-charging stations has come down in recent years, but uncertainty remains about the locations, convenience, and availability of charging opportunities. For example, charging time and the number of plug-in sites varies at each station. On the other hand, many EV drivers will primarily fuel their vehicles at home or work, which is more convenient and often lower cost than finding their way to a gasoline station. Overall, the EV market will likely expand as drivers who have easy, inexpensive access to plug-in stations begin to adopt EVs in greater numbers. For many consumers, however, infrastructure concerns will remain an obstacle until refueling locations become more familiar and refueling times get even faster.
The second characteristic of vehicle driving range is the travel distance on a single charge or fill-up. Gasoline vehicles can last 400 to 500 miles on a single tank of gas, which can get a car from Los Angeles to San Francisco without the need to fill up. In contrast, EVs get 100 to 300 miles per charge. EV driving range has made gains in the last few years; however, the range of an average EV still falls well below the range of a typical gasoline vehicle (Figure 1).
Figure 1. Driving Range of EVs and Gasoline Vehicles, 2012–2019
Notes: The data are quarterly averages weighted by new vehicle sales from IHS Automotive. Data on EV range are from Wards Automotive. Gasoline vehicles are assumed to have an average driving range of 412 miles (based on https://www.energy.gov/eere/vehicles/fact-939-august-22-2016-all-electric-vehicle-ranges-can-exceed-those-some-gasoline)
Comparing the driving range of EVs to gasoline vehicles may actually misrepresent the tradeoff that consumers face when buying a vehicle. Certain EV models such as the Tesla Model S have a relatively high range (around 250 miles), but are prohibitively expensive for the average new vehicle buyer. Normalizing the driving range by purchase price gives a better assessment of “bang for buck.”
In Figure 2, we plot the cost per mile of driving range for new EVs and new gasoline vehicles. We use range, price, and sales data for every quarter from 2012 to 2019, plotting two different versions of cost per mile of driving range for EVs: one without the $7,500 federal tax credit available for new EV purchases and one with the credit.
Figure 2. Cost Per Mile of Range, EVs and Gasoline Vehicles, 2012–2019
Notes: Cost per mile of range is defined as purchase price divided by maximum driving range. For the blue line, purchase price is equal to manufacturer suggested retail price (MSRP). The red line subtracts the federal tax credit of $7,500 per vehicle from the MSRP. The data are quarterly averages weighted by new vehicle sales from IHS Automotive. Data on MSRP are from IHS, and data on EV driving range are from Wards Automotive. Costs are defined in $2019 by deflating prices with the consumer price index from the Bureau of Labor Statistics. Gasoline vehicles are assumed to have an average driving range of 412 miles (based on https://www.energy.gov/eere/vehicles/fact-939-august-22-2016-all-electric-vehicle-ranges-can-exceed-those-some-gasoline), an average purchase price of $35,000 in 2012, and an equivalent inflation adjusted price through 2019
In 2012, the cost per mile of driving range for EVs was huge—about $400 to $500 per mile, or about four to five times that of a typical new gasoline vehicle. Since then, the cost per mile of EV driving range has dropped considerably, to less than $200 per mile in 2019, even without accounting for the federal subsidy.
The cost per mile of EV driving range is showing signs of convergence to the gasoline cost per mile. This convergence in cost is driven by gradual increases in EV driving range (Figure 1) and sharp declines in EV purchase prices over time. Extrapolating the rate of decline suggests that we could see parity or below in the mid-2020s. Perhaps then, we will enter an age of EV “range serenity,” so that a selling point of EVs is a good price for a good driving range. Until we reach range serenity, however, policies like the $7,500 federal tax credit are necessary to continue giving new vehicle buyers enough incentive to purchase EVs.
