The automobile is one of the great American pastimes. The open road. Muscle cars. Road trips. Electric supercars.
Hidden beneath the joys of car ownership, are the high, and largely ignored, expenses:
According to Nerdwallet, the average cost of car insurance in America is $1400 per year.
According to Wallethub, in the 27 states that place an annual property tax on vehicles, the average amount paid is $440 per year.
About $30 dollars per year in most states.
$30 dollars per year in certain states.
Traditionally this would be the cost of gas, but with the tesla model 3 breaking into the top 10 best selling vehicles in the USA, the cost of electricity may be an increasing alternative to gas costs. In 2020, with the average gas price in the USA of about $2.50 per gallon, driving 15k miles per year will cost about $1,500 with an average 25 mpg car. A 100 kWh electric battery will cost you about $15 per full charge at average electricity prices in the US. Given that 100 kWh battery will get you about 300 miles in range, you can expect to pay around $750 in electricity to go the same 15k miles as the gasoline car.
According to AAA, this can cost an average of $1200 per year for a newer vehicle.
Depreciation is one of the biggest costs of owning a car. For the typical $30k car, the car depreciates about $7k in the first year and about $3k each year for the few years thereafter.
Total car ownership costs:
Adding all the costs, the total cost of a $30k car in the first year is a whopping $11,600. The second and 3rd years will still be $7,600 per year.
DIY Electric Bike
While some bikes may be worth enough that insurance makes sense, for a budget DIY Electric bike build, insurance is largely not necessary. Further, there will be zero cost for property tax, registration, and inspections.
The national average cost for a kWh of electricity is 13 cents. A 48V/13AH battery holds about 0.6 kWh of energy generating some 20 miles of all-electric range. Therefore the cost per mile for an e-bike is 0.4 cents per mile. Riding 50 miles a week, or 2500 miles a year will cost a whopping $10 in electricity for the whole year!
An electric bike will have a higher maintenance cost than a regular bike. As with a regular bike, tires, inner tubes, brake pads, and the chain will need to be replaced after a few years in the range of about $50 total. Brakes and gears will need to be tuned up every year or so which can be done yourself or an hour or so of labor from a bike mechanic for about another $50. Regarding the electric components, motors typically have long lives but the lithium ion battery will need to be replaced about every 3 years at a cost of $250.
DIY E-bike Build Cost and Depreciation
A well built 21 speed hybrid bike can cost you under $500 brand new, even cheaper for a used model. An entry level kit for electric bike conversion can run $250 for a 1000W motor bike and an electric battery can be about $250. So, the total cost of a very functional electric bike can be about $1000. Electric bikes will depreciate just like cars and if we use the same depreciation curve, a $1000 bike will incur $240 in depreciation in the first year and about $110 in the few years thereafter.
Total DIY Electric Bike Ownership Costs
Adding up the electricity, maintenance and depreciation, an electric bike comes out to $400 in the first a year, and $250 per year for the next few years. This total cost is less than 5% of the total car ownership cost.
Car vs Bike Utility Comparison
Now that we have explored the monetary benefits of a bike, let’s consider other daily benefits/costs of a bike vs a car:
There are likely very few places where there is “bike traffic,” such that the traffic is actually caused by bikes themselves. However, bikes often have to compete with cars whether you are sharing the road or riding on bike paths, meeting congestion at car intersections. Additionally, the traffic comparison between bikes and cars is highly dependent on the level of dedicated bike trails in your area and the number of street crossings on your ride. In most cases, riding a bike will result in no more waiting at traffic lights than a car and likely much less.
This is an easy one. Bikes are pure exercise unless of course you are getting an electric powered assist. The nice thing about most electric bikes though is that you can either choose to use the electric boost or not, dialing in the desired amount of exercise for the commute. However, on a hot day, a human powered bike will cause a lot of perspiration, likely requiring a shower and change of clothes at work.
Modern cars are highly reliable machines and rarely break down. However, there are a lot of moving parts in a car and breakdowns do happen from time to time. Breakdowns are a real hassle in a car too since you have to call a tow truck, bring the car to a repair shop, get a rental car, etc. Bikes, on the other hand, are simple machines that do not really “break” down. Sure a tire may pop or a chain may fall off, but these are easy fixes that can often be done on the go. Even if the electric motor fails on an ebike, human power can always replace the motor until it is fixed.
Most bike maintenance can be done at home with a few basic wrenches. Maintenance typically includes brake adjustments and pad replacements, replacing tires, chain lubrication/replacement, and gear shifter tuning. For a car, maintenance is never ending, costly and time consuming: Oil changes, tire rotation/replacements, fluid refills, brakes, alignments, transmission, batteries, and lights, to name a few.
On a nice day, the enjoyment of riding a bike is unmatched compared to a car, except perhaps an expensive convertible. Conversely, on a rainy/cold/snowy day, riding a bike can be miserable while a car can be a climate-controlled luxury.