Compare E85 and regular gasoline costs.
E85 is cheaper per gallon and more expensive per mile unless the discount is large enough. Ethanol holds roughly a third less energy than gasoline by volume, and at 85% blend the practical economy penalty is around 25 to 30% — so a car returning 28 mpg on gasoline manages about 20 on E85. That means E85 has to be discounted by at least the same percentage just to break even. The break-even price is the useful output here: multiply the gasoline price by one minus the energy penalty, and any E85 price above that figure costs you money per mile even though it costs less at the pump.
E85 vs Gas Cost
E85 mpg = gasoline mpg x (1 - energy penalty%); annual cost = miles / mpg x price for each; break-even E85 price = gasoline price x (1 - energy penalty%)
E85 must only be used in flex-fuel vehicles. Running it in a vehicle not certified for ethanol blends can damage fuel system components and may void the manufacturer's warranty.
About 25-30% below gasoline just to break even on cost per mile. A 15% discount at the pump is still a loss once the economy penalty is counted.
Yes — its high octane rating supports more aggressive tuning in engines set up for it, and it burns cooler. Those are performance arguments, not economy ones.