Methodology — How evornot Calculates True Car Ownership Cost

01

Overview & total cost model

The total cost of ownership (TCO) is the sum of every dollar you spend on a vehicle over your ownership period — including costs that never appear on the dealer sticker.

Total Cost of Ownership

TCO = Financing + Fuel + Maintenance + Insurance + Depreciation Where Financing = Down payment + Trade-in credit + Total loan payments Fuel = Lifetime fuel or energy cost Maintenance = Annual service × years + Tires + EV extras Insurance = Annual premium × years Depreciation= Purchase price − Estimated residual value

Each of these five components is calculated independently, then summed. The calculator computes TCO for all three powertrains simultaneously using the same ownership period and annual mileage.

Why we include depreciation: Depreciation is typically the single largest cost of vehicle ownership — often $3,000–$8,000 per year on a new car — yet it appears on no invoice. Most car cost comparisons omit it entirely. We include it because it represents real wealth lost whether you sell the car or not.

02

Vehicle financing

We model a standard amortizing loan. The user inputs the out-the-door price, down payment, trade-in value, APR, and loan term. We calculate the monthly payment, total interest paid, and the portion of that interest that falls within the ownership period.

Loan principal

Loan principal calculation

Principal = max(0, OTD_price − Down_payment − Trade_in − EV_credit) // OTD = out-the-door price (after taxes and fees) // EV_credit applied to EV principal only // Floor at 0 — no negative principals

Monthly payment

Standard amortizing loan formula

r = APR / 100 / 12 // monthly interest rate M = P × r / (1 − (1+r)^−n) // monthly payment Where P = Principal n = Loan term in months r = Monthly interest rate // Special case: if APR = 0%, M = P / n (no-interest loan)

Total interest over ownership period

Interest paid during ownership

Months_paid = min(Ownership_months, Loan_term) Total_paid = M × Months_paid Interest_paid = max(0, Total_paid − Principal) // If you own the car for 3 years on a 5-year loan, // we count only 36 months of payments and interest

Simplification: We do not model early payoff, refinancing, or balloon payments. We assume the loan runs to term or the end of ownership, whichever comes first. The remaining principal balance after ownership ends is not included in TCO — this reflects the net out-of-pocket cash flow perspective.

03

Fuel & energy costs

Fuel costs are projected over the full ownership period using a flat per-unit price. We do not model price escalation or deflation over time — the user sets the price they want to model, including scenario prices like the "high volatile oil market" case.

Gas & hybrid fuel cost

⛽ Gas / Hybrid fuel cost

Total_miles = Annual_miles × Years Gallons_used = Total_miles / MPG Fuel_cost = Gallons_used × Price_per_gallon

EV energy cost

EVs are charged at two rates: a home rate and a public DC fast charging rate. The user sets what percentage of charging happens at public stations. We blend these into a single effective rate.

⚡ EV blended energy cost

Home_rate = Solar_rate if solar = yes = Grid_rate otherwise Blended_rate = (1 − Public_pct) × Home_rate + Public_pct × 0.45 // $0.45/kWh public avg kWh_used = Total_miles / Efficiency_mi_per_kWh Energy_cost = kWh_used × Blended_rate

Constant	Value	Source
Public DC fast charge rate	$0.45/kWh (fixed)	Industry average 2024–25 EIA
US average home electricity	$0.16/kWh (default)	EIA residential average 2025 EIA
Gas price default	$3.50/gal	EIA national average Mar 2025 EIA
High volatile oil scenario	$5.80/gal	Estimated Strait of Hormuz disruption scenario

Key simplification: We use a flat fuel price for the entire ownership period. In reality, gas prices fluctuate significantly year to year. The tool is best used to model a specific price assumption rather than as a precise multi-year forecast. Use the "High volatile oil market scenario" to stress-test EV economics.

04

Maintenance & tires

Maintenance costs differ significantly by powertrain. EVs eliminate oil changes, transmission service, and have substantially reduced brake wear due to regenerative braking. However, their greater weight and torque cause faster tire wear, and EV-specific tires cost more.

Annual maintenance calculation

Annual_maint_cost = Service_repairs + Tires_annualized Total_maint_cost = Annual_maint_cost × Years + Charger_net_cost // EV only, if applicable + Rental_days × $80 × Years // EV only, if applicable

Tire cost annualization

Tires are a lumpy cost — you spend nothing for years, then replace a full set. We annualize this using the expected replacement interval:

Annualized tire cost

Annual_tire_cost = (4 × Cost_per_tire + Installation) / Replacement_interval_years // Example: 4 × $80 tires every 6 years = $53/yr // Example: 4 × $200 EV tires every 4 years = $200/yr

Cost item	Default value	Basis
Gas — annual service	$650/yr	AAA YDC 2025, sedan at ~12k mi/yr AAA
Hybrid — annual service	$500/yr	Fewer oil changes, longer brake intervals AAA
EV — annual service	$250/yr	Cabin filter, wipers, fluids only AAA
Gas/Hybrid — tires/yr	$110/yr	4 × ~$80–100 / 6-year cycle, incl. mounting
EV — tires/yr	$160/yr	4 × ~$150–290 EV-spec tires / ~4.5-year cycle CR
Road trip rental (EV)	$80/day	Approximate national average daily rental rate

05

Insurance

Insurance is modeled as a flat annual premium entered by the user. We do not calculate insurance programmatically — it varies too much by driver age, location, driving history, and coverage level to model accurately.

Insurance cost

Total_insurance = Annual_premium × Years

Vehicle type	Default annual premium	Basis
Gas (sedan)	$1,400/yr	AAA YDC 2024 medium sedan average AAA
Hybrid	$1,550/yr	Slightly above gas; similar repair profile
Electric	$1,950/yr	AAA YDC 2024 EV average; 10–25% premium over gas AAA

EVs cost more to insure because repair costs are higher — EV body panels, sensors, and battery components are expensive to fix. The LiDAR and camera systems common on EVs also increase repair complexity after accidents.

Important: Insurance is the input that varies most between users. We strongly recommend replacing the default with your actual insurance quote before drawing conclusions.

06

Depreciation

Depreciation is modeled using a compound annual rate applied to the original purchase price — the same model used by accountants for vehicle book value. This produces a declining-balance curve: steeper early loss that flattens over time, which matches observed real-world patterns.

Compound depreciation model

Residual_value = OTD_price × (1 − Rate)^Years Depreciation_loss = OTD_price − Residual_value // Example: $45,000 EV at 18%/yr over 5 years // Residual = $45,000 × (0.82)^5 = $45,000 × 0.371 = $16,695 // Loss = $45,000 − $16,695 = $28,305

Vehicle type	Default rate	Basis
Gas	15%/yr	Kelley Blue Book historical averages, mid-size sedan KBB
Hybrid	13%/yr	Hybrids hold value well; strong used-market demand KBB
EV	18%/yr	Higher rate reflects rapid tech change & thinner used-EV market KBB

Why EV depreciation is higher: Battery technology is improving rapidly, making older EVs less desirable. The used EV market is also thinner than for gas vehicles, reducing residual values. This rate is expected to improve as EV adoption matures. Hybrids like the RAV4 Hybrid currently have exceptional resale value — sometimes better than equivalent gas models.

Note on depreciation vs. cash outflow: Depreciation represents real economic loss even if you never sell the car. A car worth $20,000 less after 5 years means your net worth is $20,000 lower than if you'd kept cash. We include this in TCO because it represents the true economic cost of ownership.

07

CO₂ emissions

We calculate lifetime CO₂ emissions in metric tons across three categories: tailpipe (operational) emissions, manufacturing carbon, and grid-sourced emissions for EVs. All figures are CO₂-equivalent (CO₂e) unless noted.

Gas & hybrid tailpipe emissions

⛽ Tailpipe CO₂ (gas or hybrid)

Gallons_burned = Total_miles / MPG CO2_lbs = Gallons_burned × 19.6 CO2_metric_tons = CO2_lbs / 2,205 // 19.6 lbs CO₂ per gallon of gasoline // Source: EPA emissions factor for motor gasoline

EV grid emissions

EV carbon depends entirely on how the electricity was generated. We use EPA eGRID 2023 state-level grid intensity data to convert kWh consumed into CO₂ emissions:

⚡ EV operational CO₂

kWh_total = Total_miles / Efficiency_mi_per_kWh Grid_lbs_per_kWh = State_grid_intensity_lbs_per_MWh / 1,000 CO2_lbs = kWh_total × Grid_lbs_per_kWh CO2_metric_tons = CO2_lbs / 2,205 // Grid intensity source: EPA eGRID 2023 (published March 2025) // US national average: 767 lb CO₂/MWh

Manufacturing carbon

Battery production requires significant energy and raw material processing. We add a one-time manufacturing carbon penalty to reflect the higher embodied carbon of EVs vs. gas vehicles:

🏭 Manufacturing carbon premium

EV_extra_manufacturing = 14,000 lbs = ~6.3 metric tons Hyb_extra_manufacturing = 4,000 lbs = ~1.8 metric tons Gas_extra_manufacturing = 0 // baseline Total_CO2 = Operational_CO2 + Manufacturing_premium // EV figure: mid-range of MIT/IVL Swedish Research Institute estimates // for a 60–75 kWh battery pack (typical mid-size EV) // Range in literature: 8,800–19,800 lbs depending on battery size // and manufacturing energy source

Grid region	lbs CO₂/MWh	Primary source
US National Average	767	EPA eGRID 2023 EPA
California (CAMX)	429	High renewables, nuclear EPA
NY Upstate (NYUP)	242	Hydro-dominant EPA
Pacific Northwest (NWPP)	632	Columbia River hydro system EPA
Texas (ERCT)	734	Mixed gas/wind EPA
Colorado/Rockies (RMPA)	1,037	High coal share EPA
SERC Midwest (MO/IL)	1,240	Coal-heavy EPA
Hawaii Oahu (HIOA)	1,490	Oil-fired generation EPA

The grid parity point: On the US average grid (767 lb/MWh), a typical EV breaks even on carbon vs. a 30 MPG gas car after roughly 2–3 years of driving, once manufacturing carbon debt is paid off. On a clean grid like upstate New York (242 lb/MWh), break-even comes in under 1 year. On a coal-heavy grid like Missouri/Illinois (1,240 lb/MWh), an EV may never outperform a modern hybrid on carbon.

08

EV-specific costs

EVs carry two unique cost items that don't apply to gas or hybrid vehicles: home charger installation and road trip rental cars.

Level 2 home charger

⚡ Charger net cost after tax credit

Charger_net = Installation_cost × 0.70 // Federal 30C tax credit covers 30% of EV charger installation // Typical installed cost: $800–$2,500 // Default: $1,200 × 0.70 = $840 net cost // Credit applies to homeowners only — renters cannot install L2 charger

Road trip rental cars

For users who would occasionally need to rent a gas car for long trips beyond EV range, we add an annualized rental cost:

🚗 Annual road trip rental cost

Annual_rental = Rental_days_per_year × $80 Total_rental = Annual_rental × Years // $80/day = approximate US average daily rental rate // This cost is added to EV maintenance total only

09

Key assumptions & limitations

No model perfectly captures reality. Here is a complete list of simplifications we make and why.

Assumption	What we do	Real-world nuance
Flat fuel price	One price applied to all years	Gas prices are volatile; electricity rates change with utility tariffs. Model a range of scenarios.
Constant annual mileage	Same miles every year	Driving patterns change over time. High early mileage increases fuel and depreciation costs more than our model shows.
No resale modeling	Depreciation loss = purchase price minus residual	Actual resale value depends on condition, mileage, market timing, and trim level — factors we can't predict.
Flat maintenance cost	Same annual service cost every year	Older vehicles require more repairs. Year 8 maintenance is typically higher than year 2. Our model may understate long-ownership costs.
No registration or taxes	Not included in TCO	Annual registration fees, property taxes on vehicles, and state inspection costs vary widely. Add roughly $300–$800/yr depending on state.
Static grid intensity	One eGRID 2023 value for all years	US grid is decarbonizing. An EV bought today will have lower carbon emissions in year 5 than year 1 as more renewables come online. Our model slightly overstates EV carbon for longer ownership periods.
Manufacturing carbon	Fixed values from literature midpoints	Manufacturing carbon varies by battery size, factory energy source, and raw material sourcing. Our 14,000 lb EV figure is a reasonable mid-size EV estimate but could range from 9,000–20,000 lbs.
EV charging efficiency	Uses rated mi/kWh from spec sheet	Real-world efficiency drops ~15–25% in cold weather. Charging losses add another ~10–15% (AC → DC conversion). Our model may slightly understate EV energy costs in cold climates.
Loan payoff timing	Payments capped at ownership period	If you sell before the loan ends, remaining principal would be paid from proceeds. We treat the vehicle cost as fully owned by end of period.
No opportunity cost	Down payment is treated as a sunk cost	A larger down payment reduces loan interest but sacrifices investment returns on that capital. We don't model this trade-off.

10

Data sources

Every default value and constant in evornot is traceable to a primary source.

AAA Your Driving Costs 2025 Annual fuel, maintenance/repair/tire, insurance, depreciation, and financing benchmarks for new vehicles across 9 categories. Our primary source for maintenance, insurance, and fuel defaults. newsroom.aaa.com →
EPA eGRID 2023 Summary Tables State and subregion-level CO₂ output emission rates in lb/MWh. Published March 2025. Used for all EV grid carbon intensity values. epa.gov/egrid →
EIA — Electricity Explained: CO₂ Emissions per kWh US national average: 0.81 lbs CO₂/kWh (2023). Our 767 lb/MWh default aligns with EPA eGRID; EIA provides corroborating figures. eia.gov →
EPA — Greenhouse Gas Equivalencies Calculator Source for the 19.6 lbs CO₂ per gallon of gasoline combustion factor used in all gas and hybrid tailpipe calculations. epa.gov →
IVL Swedish Environmental Research Institute / MIT Energy Initiative Lifecycle analysis studies on EV battery manufacturing carbon. Source for the 14,000 lb EV manufacturing premium (range: 8,800–19,800 lbs depending on battery size and production region).
Kelley Blue Book — Depreciation Data Historical residual value data and depreciation rate benchmarks by vehicle type. Basis for 15% (gas), 13% (hybrid), and 18% (EV) default annual depreciation rates. kbb.com →
JD Power / Consumer Reports — Tire Cost & Longevity Source for tire replacement cost ranges ($50–$75 for economy sedans; $150–$290 for EV-specific tires) and typical replacement intervals (4.5–6 years).
IRS — Section 30C Alternative Fuel Vehicle Refueling Property Credit Federal tax credit covering 30% of Level 2 EV charger installation costs for homeowners. Applied in our charger net cost calculation. irs.gov →