The Consumer Value of Transportation Efficiency

            Energy efficiency pays good dividends.

            Let me show you how.

            I started looking to replace the Burns family’s aging automobiles nearly two years ago. That’s when I started looking. It’s also when the frustration began, mostly because auto dealers weren’t playing nice.

That was then

Back then I was driving a 2010 Lexus RX 350 with over 200,000 miles. It had been great for years. It simply ended all temptation to change cars, that’s how much I liked it.

My wife drove a bright turquoise 2013 Honda Fit Sport. She loved it because she could whip into any parking space and the color stood out everywhere. But it had nearly 150,000 miles. Also, neither car had any of the safety equipment that is now standard.

Better fuel bill

We live 13 miles from the nearest town, Johnson City. We were racking up about 14,000 miles a year.  On each car. The Lexus burned about 636 gallons of mid-grade a year. The Honda was burning about 424 gallons of regular a year. That’s a total of 1,060 gallons a year.

We were spending nearly $3,400 a year at the pump. Sure, it could be a lot worse. But why not spend less?  And how about being safer as well?

EV alternative

Here’s what we did. Last October I took delivery on a new Tesla Model Y.

It’s out-the-door cost? About $37,000. I haven’t been to a gas station since.  It takes about 10 kilowatt hours of charge a day from Pedernales Electric Cooperative.  Of course, cutting at least 636 gallons of mid-grade gas a year isn’t a free lunch.

But it’s close.

With our cost per kilowatt hour at about 10 cents, the EV will cost about $350 a year to fuel with electricity compared to $2,162 for gas. That’s a net saving of $1,812 a year.

Will the savings pay for the new car? No way.

Efficiency “yield”

But that isn’t necessary. By any reasonable measure, the Lexus was fully depreciated. A replacement was in order. In effect, the $1,812 a year saving is a nearly 5 percent “dividend” for changing cars. I can live with that.

In fact, the savings is effectively greater because that $1,812 in saving is in after-tax money. To have $1,812 after taxes you’d need $2,323 in pre-tax income in the 22 percent tax bracket or $2,384 in the 24 percent tax bracket. Either way, that’s a “yield” over 6 percent.

Today, with more than six months and 7,769 miles on the car, I am delighted with the Model Y in every respect.

Range anxiety?

I also like the fact that more than 90 percent of all miles can be done with home-charging. Tesla Superchargers are only needed for long trips, not daily driving. This is a big deal. I have exchanged finding and spending time at gas stations for plugging the car in when I get home.  I unplug it when I leave home. That’s it.  I can even forget to charge one day and still do normal driving the second day. I haven’t visited a Supercharger station in several months.

No, it’s not perfect

If it has a fault, it is one shared with virtually every brand of car made today – the huge display screen tempts with too many information opportunities when you really need to just drive. That’s life in the Attention Economy. We all need to find ways to avoid screens taking over our lives.

But what about Elon Musk?

There are bumper stickers for that. Elon will go on being Elon and everyone who wants to go to Mars will benefit. The rest of us will just enjoy driving an electric car, whoever makes it.

Incremental purchase

A less favorable calculation applies to replacing the Honda. It averaged 33 miles to the gallon of regular, burning 424 gallons of regular a year. That cost about $1,230 a year.

We replaced it with a 2025 Toyota Corolla Cross for about $34,000 out of pocket. The Cross is larger, but it gets 42 mpg on regular. So, it should burn about 334 gallons a year, a saving of 90 gallons or $261 a year.

Little to brag about there. Except…

The Cross is roomier, safer and more comfortable than the Honda Fit. It also has an estimated range of 445 miles.  Basically, this is about productivity in consumer spending. We look to get more, for less. The Cross delivers.

The big picture

Here’s how our spending pencils out.

–The total original cost of the cars we replaced was $61,000.

–Adjusted for inflation since purchase we would need to spend $88,194.

–But we spent less, $71,000. That’s a good price for two new cars.

— And now we consume less energy while having additional space and significantly better safety.

This is our power as consumers. All of us, as individual or households, are small businesses running our household consumption business. If enough of us pay attention to what makes sense, we can change our world.

Related columns:

Scott Burns, “How a Rogue Toyota Dealer Became a Marketing Agent for Tesla, 5/21/2023: https://scottburns.com/how-a-rogue-toyota-dealer-became-a-marketing-agent-for-tesla/

Scott Burns, “Shocking News, I’ve Gone Tesla,” 1/12/2025: https://scottburns.com/shocking-news-ive-gone-tesla/

Sources and References:

Dan Neil, Wall Street Journal, “Here’s Why I Bought a Tesla, in Spite of Elon,” 3/21/2025: https://www.wsj.com/business/autos/heres-why-i-bought-a-tesla-in-spite-of-elon-d0225634?mod=Searchresults_pos1&page=1

BLS inflation calculator: https://www.bls.gov/data/inflation_calculator.htm

This information is distributed for education purposes, and it is not to be construed as an offer, solicitation, recommendation, or endorsement of any particular security, product, or service.

Photo: MakaraHeng on Pexels

(c) Scott Burns, 2025