Vincentric’s annual roundup on the cost of owning electric vehicles (EVs) compared to gasoline models reveals that many EVs have a lower five-year cost of ownership. The analysis considers factors such as depreciation, fees, taxes, financing, fuel costs, insurance, maintenance, opportunity cost, and repairs. It assumes that new vehicles are driven 15,000 miles annually over the first five years of ownership. While 49% of electric models were found to cost less to own over five years than their gasoline counterparts, depreciation remains a key reason why EVs lag behind gasoline vehicles.
The loss of the federal EV tax credit for many models has impacted depreciation, but analysts predict that EV costs will decrease in the coming years, potentially reaching price parity with gasoline models. This decrease is expected due to falling battery prices driven by excess manufacturing capacity and increased availability of raw materials. Despite this, 19 out of 41 EVs surveyed for 2024 were able to recoup their price premiums in seven years, with eight already having a lower purchase price than an equivalent gasoline model.
The analysis highlights that ownership-cost advantages can vary depending on factors such as location and vehicle type. A 2020 Consumer Reports study emphasized the strong ownership-cost advantages of EVs for SUVs and pickup trucks. The data from Vincentric serves as a reminder that while EVs may have lower ownership costs in certain circumstances, there are still areas for improvement, particularly in terms of depreciation.
Overall, the potential for EVs to achieve price parity with gasoline models in the near future is promising, with the continuous decrease in battery prices and other contributing factors. As EV technology advances and becomes more affordable, it is anticipated that more consumers will switch to electric vehicles, further driving down costs and increasing accessibility. The shift towards electric vehicles is not only beneficial for consumers in terms of cost savings, but also for the environment, reducing emissions and dependence on fossil fuels.
As more EV models are introduced to the market and existing models undergo updates and improvements, the range of options available to consumers will continue to expand. This diversity in models, combined with the potential for cost savings in ownership, presents a compelling case for considering an electric vehicle as an alternative to traditional gasoline models. With ongoing advancements in technology and infrastructure supporting EV adoption, the future looks bright for electric vehicles in terms of affordability and sustainability.
