To describe the fuel economy of EVs, manufacturers and the Environmental Protection Agency (EPA) use the concept of MPG Gasoline Equivalent (MPGe). According to the concept, one gallon of gasoline is attributed with energy of 33,7 kWh. For example, the 2020 Tesla 3 Standard Range is labeled with a combined fuel economy of 131 MPG. This means that an EV's battery needs to draw from an external power source, such as a grid or a charging station, 33,7 kWh of electric energy to enable a vehicle with a driving range of 131 mi. In other words, the vehicle's fuel efficiency is  [33,7/1,31], i.e., around 26 kWh/100 mi.

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Does it mean that the cost of electricity for the 2020 Tesla 3 Standard Range is [131/30], i.e., 4.4 times cheaper than the cost of gasoline for a comparable in- class and pick-up time vehicle, 2020 BMW 330i, with a combined fuel economy of 30 MPG? The answer is no, not even close. 

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To accurately compare the cost of electricity for an EV and the cost of gasoline for conventional IC engine vehicles, it is necessary to attribute EV with so-called True Fuel Economy (TFE) and then directly compare it with the fuel economy of a conventional IC engine vehicle. 

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TFE of an EV is defined as the fuel economy of a comparable IC engine, i.e., the vehicle of similar class and having 0-60 mph pick-up time substantially the same as that of the EV:

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                                     (D/De)*CE=(D/TFE)*CG,

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where D is the distance driven; CG – the national average cost of one gallon of gasoline; CE is the national average cost of one kWh of electricity; De is the distance that an EV runs on one kWh of electricity (De=MPGe/33.7 kWh). According to the equation, TFE can be calculated as follows:

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                                     TFE=MPGe*CG/33.7*CE

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Since in 2019, the annual national average CG was $2.6 per gallon, CE was $0.13 per kWh, then:

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                                             TFE=0.59*MPGe

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Since the costs of electricity and gasoline may vary depending on the location, obtaining an accurate estimate requires using of the annual average prices for a particular territory.

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Here is an example. In 2019,  the TFE of the 2020 Tesla 3 Standard Range was [131*0.59], i.e., around 77 MPG. Accordingly, the specific cost of electricity for  the 2020 Tesla 3 Standard Range was [77/30], i.e., 2.6 times lower than the cost of gasoline for the 2020 330i BMW, having a combined fuel economy of 30 MPG.