Summary
- EVs can save owners thousands of dollars over time, despite higher upfront prices
- EV costs should be divided into five buckets to compare with combustion cars
- Home charging is the most cost-effective fuel option for EVs
- EVs require less maintenance and repair costs compared to gas cars
- EVs have higher insurance premiums and depreciation rates, but are expected to decrease over time
Article
Electric cars have gained popularity for being quick, green, and technologically advanced. However, the decision to switch to an electric vehicle (EV) often hinges on the long-term cost implications. Studies have shown that despite higher upfront costs, EVs can save owners thousands of dollars over time due to lower operating costs. This guide aims to provide an overview of the costs associated with owning an EV and equip consumers with the tools to make an informed decision.
The upfront cost of an EV is typically higher than a conventional combustion car, with the average transaction price for a new EV being 16% higher than the industry-wide average price for gas cars. However, the federal EV tax credit can reduce this difference by up to $7,500 for qualified vehicles and buyers. Leasing an EV can also provide access to the tax credit, resulting in attractive lease deals. Additionally, the used EV market offers opportunities for cost savings, with federal incentives available for qualifying purchases.
Fueling an EV can be cheaper than gas cars, especially when charging at home using Level 2 setups. The cost of a full charge for an EV can be significantly lower than filling up a gas tank, leading to cost savings over time. While setting up home charging infrastructure may involve initial costs, federal and state incentives can help offset these expenses. Public charging costs vary depending on location and time, with home charging being the most cost-effective option for EV owners.
Maintenance costs for EVs are generally lower than gas cars due to fewer moving parts in the electric powertrain. Research has shown that EV owners spend less on repairs and maintenance compared to gas car owners. While one-off repairs for collisions may be more expensive for EVs, battery replacements are rare and should not be a major concern for most owners. Insurance costs for EVs can be higher than gas cars, with premiums varying based on factors such as the make and model of the vehicle and the provider.
Despite EVs depreciating more rapidly than gas cars, cost savings in other areas make them a more financially viable option in the long run. Various studies have shown that EVs can save owners significant amounts of money over the course of ownership, especially in certain vehicle segments. With the decreasing cost of lithium and the introduction of more affordable EV models, the cost benefits of owning an EV are expected to continue growing. Ultimately, choosing an EV not only benefits the environment but also offers financial advantages to consumers.
Read the full article here
