Many California EV Owners Missing the Sweet Spot

Lack of information & complicated utility rates create barriers for savings

People who buy or lease an electric vehicle (EV) mainly do so to save money on fuel costs. Unfortunately, the majority of California EV owners don’t achieve the greatest savings, which may hamper increased EV adoption.

CSE conducted a study to understand the impact that electricity rate selection has on overall cost of EV ownership. I presented the results at the Behavior, Energy & Climate Change Conference held Dec. 7-10 in Washington, D.C.


View poster of "Calculating the Economic Benefit of Switching to Time-of-Use Rates for California EV Customers."

The key problem is that across the state’s three major investor-owned utilities – Pacific Gas and Electric, Southern California Edison and San Diego Gas & Electric – many EV owners don’t take advantage of readily available special electricity rates for vehicle charging.

What we found

In Clean Vehicle Rebate Project (CVRP) consumer surveys, some 38 percent said their primary motivation for getting an EV was fuel cost savings.

During the EV purchase process, 17 percent of buyers surveyed reported that sales staff did not discuss electricity rates at all and another 50 percent of buyers characterized them as not very knowledgeable about rates. Only about one-third reported interactions with sales people who had a concrete understanding of utility rates.

Dealerships differ in their commitment to selling EVs and their training of sales staff in the various components of EV ownership. Some do a great job of this, while many still lack knowledge that would be helpful for consumers, especially relating to electricity rates.

Despite this lack of dealership knowledge, about 70 percent of buyers reported awareness that special vehicle charging electricity rates were available from their utility but many were not taking advantage of these rates.

The next barrier

Once they leave the car dealership, EV owners are left largely on their own to figure out how various utility rates will impact their cost of EV ownership and monthly energy consumption. They have to undertake a complicated analysis that includes each rate’s parameters, their vehicle’s battery specifications, hourly home energy consumption, seasonal baseline allowances and myriad other aspects of electricity billing and vehicle charging. Few resources give them personalized estimates of how much they will be charged on different rates.

The result of all this complexity is that 60 percent of surveyed EV owners simply remain on a standard domestic rate, while only 40 percent switch to the more optimal EV time-of-use (EV-TOU) rate. It’s the path of least resistance.

We found that the 60 percent of the EV owners who remain on their standard rate instead of EV-TOU rates forfeit an average of $800 a year while some who switched to EV-TOU saved up to $3,000 a year. Nearly all California EV owners (98 percent) who use 4,000 kilowatt-hours or more a year (typical household) will save on electricity costs by switching to EV-TOU.

The bottom line

Clearly, informing EV customers on energy rates is essential to realizing fuel cost savings. This starts by ensuring dealers are better equipped to meet customer needs through education and outreach. Equally important is streamlining the cost comparisons of standard rates and special EV rates to present purchasers with clear direction to optimize the cost of EV ownership.

Demystifying utility rates is critical to ensure that EV customers achieve the fuel cost savings they expect and to promote continued expansion of the EV market.

John Horn's picture
December 9, 2014 - 15:39 -- John Horn