Cost Comparison of new vehicles

Source: https://www.popularmechanics.com/cars/g1792/12-new-cars-that-are-worth-waiting-for/

I have spent the last few days pricing out the differences in costs between the various hybrids, Plug-in Hybrid Electric Vehicles (PHEV) and Electric Vehicles (EV).

Currently, there are A LOT of options to choose from if you are interested in one of these three classes of cars, with many more set to hit the market later 2018, another round in 2019 and most producers offering full electric line-ups come 2020.

If you are willing or able to wait to buy, my belief is that through increased competition and technological advancements, over the next 2 years, we will see drastic decreases in the cost of these vehicles while simultaneously witnessing increases in electric range and capabilities.

But what exists now? Well based on a current level of driving and costs being faced I worked out the annual, 5-year and 10-year costs of ownership for each car on the market.

This is a limited study, however as it only focuses on new (2018) Vehicles because the data on these vehicles is easiest to obtain. furthermore, it does not include maintenance costs because I could not determine a reliable estimate of the new vehicle types (PHEV and EV). I would expect however that if you include maintenance costs, it would push up the price of Hybrid, and PHEV placing EVs at the lower cost spectrum in the long-run.

Without further adieu, The assumptions followed by the graphs.
Assumptions:

1. Gas is currently $1.459. over the last year, gas prices have increased by 12%. This seems aggressive to continue into the future, so I assume that gas prices will grow at an average rate of 8% a year. 
2. Electricity in BC is on a stepped system, I took an average cost of $0.09/Kwh while over the last year, electricity prices have decreased, I don't see this as a long-run trend so I make the assumption that electricity costs would increase at inflation, thus on average 2% a year. 
3. Car loans are at 5%, with any such loan being amortized over 5 years. 
4. The discount rate is 5%. That is $100 next year is only worth $95.24 today. 
5. Driving a total of 80km a day, 4 times a week (This is high for most I realize). 

Onto the graphs showing the cost by vehicle. First the cost of ownership over the first year followed by the a 5 year aggregate and 10 year aggregate cost. 

First up the annual cost of ownership. 

• Annual loan (blue) is the value of all loan payments in the first year.
• Annual gas - this guy gets a little complicated. 
• If the vehicle is PHEV and the one-way commute is less than the range then technically no gas has been used. However to include "one-off" long trips I have still included a fuel usage at 10% of total km driven. 
• Otherwise, the gas usage is straight gas usage based off of average L/100km. 
• Annual Electricity - How many Km driven versus the range of the vehicle providing the # of full charges required in a year. The Kwh required to charge multiplied by the cost yielding the electricity cost. 

At the 1 year horizon. 4 out of the 5 cheapest cars are hybrids, with one PHEV (Hyundai Ioniq EV+) making the list.

Moving out to the 5 year mark. at this point we are incorporating inflation of gas, electricity, as well as my discount rate (Future payments are not worth as much to me as present payments). As expected over this time period, the pricier cars which don't depend on gas begin to migrate to the cheaper side.

On the 5 year horizon, the top two remain constant, however, in the top 5 now only 3 are hybrids, one PHEV and one EV (Hyundai Ioniq dominates here).

Finally the ten year horizon, over this horizon the cost of gas begins to outweigh the larger purchase prices and the EV's overall begin to win out ... If you keep them, and they are not obsolete in 10 years...

Now the top 5 are made up of 3 EVs, one PHEV, and one Hybrid. over this time horizon, the cheapest vehicles are the 3 versions of the Hyundai Ioniq (EV, PHEV and Hybrid) as well as the Kia Soul and Nissan Leaf.

So if you are considering buying a vehicle, and view each vehicle as having very little differentiation, then the clear winner is the Hyundai Ioniq series of cars.

If you have a degree of preference of one model or brand over another, then you can begin to weigh your options between price and preference.

For this, I would really focus on the 5 year time horizon. Over the ten year horizon I feel that there will be so much technological change over the next ten years that the majority of vehicles bought today will be nearly obsolete in relation to the range and capabilities of the vehicles ten years from now.

This is all my 2 cents at least.

What are your thoughts? what do you think about all the new EV, PHEV cars hitting the market? Feel free to comment below.