Cost is a major consideration no matter what type of car you are buying. Electric vehicles are great options to help save the environment, but what good are they if they’re out of your budget? Let’s take a look at the factors that affect electric vehicle prices and see how they stack up against traditional cars.
Do electric vehicles cost more than traditional cars?
Electric vehicles have a higher initial cost than gas cars, but are less expensive over their lifetime, mainly due to cheaper fuel. Several studies break down this total cost of ownership. Consumer Reports estimates that “for all EVs analyzed, lifetime ownership costs were many thousands of dollars lower than all comparable costs of ICE (internal combustion engine) vehicles, with most EVs that offered savings of between $6,000 and $10,000.”
That’s great, but the long-term nature of these savings is a big caveat. Even though batteries are getting cheaper and cheaper, the initial cost of electric vehicles is getting more and more expensive. Yes, the fuel savings will eventually make an EV worthwhile, but you still have to be able to afford the car in the first place. Cox Automotive estimates that the average starting price of an EV is still around $65,000. By comparison, midsize cars cost about $32,000 and full-size cars are $44,000. EV sticker prices place them between full-size trucks ($60,082) and midsize luxury SUVs ($69,608).
Do hybrid cars cost more than EVs?
Initial costs for hybrids are usually cheaper than EVs. The May 2022 average cost of a hybrid car stands at $38,335, which is below the overall industry average of $46,426, and comparable to small/midsize pickup trucks, which average $39,783.
If you buy a plug-in hybrid, calculating lifetime gas costs will really depend on your use case. If your trips are short enough to rely on the battery and you’re only using gas power in emergencies, you can get the best of both worlds: a lower initial cost and cheap fuel.
Is it cheaper to charge a car with electricity than to refuel with petrol?
Like gasoline, the price of electricity varies considerably, so making a direct comparison is tricky. That said, a 2020 study pegs the difference in EV fuel savings at a minimum of $3,000 over 15 years, and up to $10,500. Another 2018 study suggested that it is twice as expensive to keep a gasoline vehicle on the road compared to an EV.
Is EV maintenance more expensive?
Maintenance costs will depend a lot on how hard you are with your car, but EVs have a good leg up. With fewer moving parts than traditional cars and without the mechanical stresses of internal combustion, EVs can last significantly longer. Even with the higher fees that mechanics charge for electric vehicles due to the greater computerization involved, recent research suggests that electric vehicle owners pay about 30% less in service costs after three years of ownership.
Is EV insurance more expensive?
Insurance for electric vehicles is really higher. This is because individual repairs can be more expensive, although they occur less frequently. However, the gap is not large. One study estimated that insurance costs are on average 15% higher for electric vehicle owners. Fortunately, insurance companies are likely to lower rates as they develop confidence in the reliability of EVs.
Are EVs discounted?
Yes, electric vehicles have discounts, but their availability can be difficult to determine. For one, discounts and rebates will depend on the region. Some states and even some cities will have discounts that aren’t available elsewhere. The next challenge is timing. The budget for those discounts is usually for a specific time.
Subsidies are a big part of what makes EVs financially viable. The research suggests that “financial subsidies have enabled battery electric vehicles to reach cost parity in the UK, California and Texas, but this is not the case for plug-in hybrid electric vehicles which have not received as much financial support”. To find rebates for your area, be sure to check the US Department of Energy database.
Are electric cars getting cheaper?
Unfortunately, due to growing supply chain problems and a push among manufacturers to pack larger batteries into their vehicles to ease range anxiety, upfront costs for EVs are rising. The data shows that from April 2021 to April 2022, the average EV cost increased 16.1%, compared to an industry average of 13%. That said, gas prices are also rising and could make up the difference over time.
There are many variables at play when weighing the costs of your vehicle, but in general, EVs are cheaper than gas cars in the long run, especially if you take advantage of rebates and are a moderate user.
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