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. You can read about it here: “How a Rogue Toyota Dealer Became a Marketing Agent for Tesla.”

That was then

Back then, I was driving a 2010 Lexus RX 350 with more than 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.

Another motive was the fuel bill

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

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

The EV alternative

Here’s what we did. Last October, I took delivery on a new Tesla Model Y. You can read about it here: “Shocking News, I’ve Gone Tesla.”

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 per day from Pedernales Electric Cooperative. Of course, cutting at least 636 gallons of mid-grade gas per 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 per year to fuel with electricity compared to $2,162 for gas. That’s a net saving of $1,812 per year.

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

The “yield” on efficiency

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

In fact, the savings are 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% tax bracket or $2,384 in the 24% tax bracket. Either way, that’s a “yield” more than 6%.

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

Whatever happened to “range anxiety?”

I also like the fact that more than 90% 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 Tesla CEO 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.

A more 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 per year. That cost about $1,230 per 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 per year, a saving of 90 gallons or $261 per 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.