If your commute is that short, why not charge only when you have 25% left instead of charging everyday?
Well, because people want to be able to
use their cars. And since recharging a car is pretty slow if you need to do it suddenly, it's not a great feeling to find that you need to drive somewhere that's 40 miles away, but you can't make it there and back because you let it get down to 25% (60 miles).
I understood that keeping a battery in a higher state of charge causes damage, the higher the charge, the more the damage.
That is a generally conceptually accurate statement, but you are making the mistake of thinking that it is a straight linear effect, where every % drop has the same amount of effect of reducing damage. It's not linear. The effects get more drastic, the farther toward the extreme ends of 0% and 100% you are. So being at 90 instead of 100 is a huge change. 80 instead of 90 is less change. See?
Also, going to Zero causes damage, so I think the best compromise in your case is charging only to 50% (since your drive is so short) and plugging back in when you reach 25%
That wouldn't be the best, because then you are always between 25 and 50%, or below half all the time. The ideal is to be
around that midpoint, not below it. So if you're going to go there, for that best case, you would want to charge above 50% by some amount, and go down to below 50% by some amount, and back and forth. But then this gets to the factor of your car needing to be practical and usable instead of only having some little 80 mile window of use--might as well get a Nissan Leaf then.
So back to the previous point is that you get the most bang for your buck of battery healthiness in bringing your upper limit down into the 70-90ish% range instead of 100%, but that's still high enough to have a good amount of driving range to use.