Electric car’s MPG equivalent (MPGe) can be impressively over 100. One might assume that this is how much the driving costs can be saved by. Like if you compare 100 MPGe and 25 MPG for a regular car, three quarters of the driving cost could have been saved when go with 100 MPGe. This is not really the case.

MPG equivalent actually is based on energy equivalent. One gallon of gas and 33.7 kWh of electricity contain same amount of energy, which is 121.32 megajoules. So for electric cars, MPGe equals the number of miles the car can drive using 33.7 kWh of electricity. For example, if an electric car is rated 101.1 MPGe (that is 3 times 33.7), what it means is that the car would use 1 kWh for every 3 miles.

Now we can convert MPGe into something related to driving costs – miles per dollar equals to MPGe divided by the product of 33.7 kWh and the electric rate (like $0.1/kWh). Similarly, for regular MPG, the miles per dollar equals to MPG divided by the gas price.

For example, if we still compare 100 MPGe and 25 MPG for driving costs, here is how they look. If your electric rate is $0.1/kWh, 100 MPGe means roughly 30 miles per dollar [100/(33.7X0.1)=29.7]. For the 25 MPG car, assuming a gas price of $2.5/gallon, then 25 MPG means 10 miles per dollar (25/2.5=10). So two thirds of the driving cost could be saved when go with 100 MPGe.

You can plug in real numbers and calculate real savings.

The MPG label (the Monroney label) has the car’s estimated annual fuel cost and for electric cars, how much can be saved over a 5-year span. The numbers are based on some estimated (not may not be up-to-date) numbers like gas price, electricity rates and annual mileage (which usually is 15,000 miles). Therefore, it will be more accurate to estimate using your actual situation.

One more word on electricity rates – the electricity you use to charge the electric car at home is somehow included in your overall household usage. With this being said, you may want to do a little research to find out which electric rate plan fits you better, as you add a few hundreds of kWh to your monthly energy consumption.

For example, the utility company PG&E in the Bay Area has a plan for EV charging. During off-peak hours (11pm to 7am), the rate is as low as 11 cents/kWh. On the flip side, during peak hours (2pm to 8pm), the rate is 44 cents/kWh, which is quite high compared to other rate plans.

Back to MPGe, if it is confusing to electric car buyers, why is it still there? For one thing, the officials use this number to calculate each carmaker’s average fuel economy. Many countries set standard on the average fuel economy. For example, for Model Year 2020 in the US, carmakers need to reach 49 MPG on average for compact cars. In this regard, electric cars with high MPGe helps a lot.

Some of the top runners in terms of MPGe: BMW i3 (124 MPGe), Chevy Spark EV (119 MPGe) and Fiat 400e (116 MPGe).