With gas prices up more than 58% compared to last year, you might be thinking of switching to an electric car to save money.
But given that EVs tend to be more expensive than gas-powered cars, and electricity has its own costs, is it actually cheaper to go electric? The short answer is yes, although it also depends on your driving habits, where you live and the type of vehicle you buy. You might even want to consider a hybrid vehicle that has both a gasoline engine and an electric motor.
Here is an overview of the costs of electric vehicles compared to gasoline-only cars.
Electric vehicles have a higher initial cost
The average transaction price for an electric vehicle (EV) is $56,437, according to Kelley Blue Book, about $10,000 more than the overall industry average of $46,329 that includes gas and fuel. VE. In terms of price, an EV is equivalent to an entry-level luxury car.
To save time charging EVs and extend battery life, many drivers also install so-called “Level 2” chargers in their homes, at a total cost of around $2. $000, installation included. With a Level 2 charger, it will take less than eight hours to charge your vehicle, according to JD Power.
Most electric vehicles come with a Level 1 charging cable that can be plugged into a common 120-volt household electrical outlet, but it can take up to 40 hours to fully charge your vehicle. It’s cheaper, but less convenient.
Tax credits can reduce the cost of an electric vehicle
While surveys show that the price gap between electric vehicles and gasoline vehicles is expected to narrow over the next decade, this will depend on continued improvements in battery technology, which could lead to lower production costs. students.
In the meantime, customers can offset part of the premium paid for electric vehicles through tax credits. The federal government offers a non-refundable tax credit worth $2,500 to $7,500 for newly purchased electric vehicles manufactured after 2010.
However, the credit only applies to the first 200,000 vehicles sold by a manufacturer. Tesla and General Motors have already exceeded this number, so no credit is available from these manufacturers. A list of electric vehicles that still qualify for the federal tax credit can be found here.
Your state may also offer its own tax credit or refund. Electric vehicle advocacy group Plug In America has an interactive map that shows the electric car incentives in each state. New York, for example, offers a discount of up to $2,000.
Electric vehicles tend to have cheaper fuel and maintenance costs
Although electric vehicles generally have higher initial purchase prices, owners can save a lot on operating expenses. A 2020 Consumer Reports study found that electric vehicle owners spend an average of 60% less fuel than internal combustion engine vehicles.
This calculation includes the average use of commercial charging stations (11 visits per 15,000 miles, for a car with a range of 200 miles), which can be two to three times more expensive than charging your car at home. Rates vary when charging at commercial stations, but the total cost per session is around $10-45 to fully charge your car battery.
When it comes to home charging, home electricity rates vary by state, depending on a number of factors such as regulations and how the electricity is generated, but the average monthly cost is about $25 per month.
And because electric vehicles have fewer parts than gas-powered cars (there’s no oil to change, no spark plugs to replace), they also tend to have lower maintenance costs. A recent report by analytics firm We Predict found that after 36 months on the road, maintenance costs were 31% lower for electric cars and light trucks compared to similar gas-powered vehicles.
So which one is the cheapest overall?
A report by the US Department of Energy shows that after 15 years, electric cars generally cost less than similar gasoline-only models, when taking into account price, maintenance, financing, repairs , federal tax relief and fuel costs. The electric version of a small SUV costs $0.4508 per mile, which is $0.0219 less than the $0.4727 per mile rate you get with a similar gasoline model.
Based on the average lifespan of a car – 200,000 miles, according to Car and Driver – the cost of a gas-powered car would then be $94,540, while a similar electric vehicle would be $90,160. , for a difference of $4,380. Note that this total does not include any possible state tax relief, however, since they were not included as part of the study.
While EVs are generally less expensive than their gas-powered counterparts in the long run, new EVs with battery ranges over 300 miles can end up costing more. Light-duty EVs that travel 300 miles on a single battery charge have a cost per mile four cents higher than similar gas-powered models, though that’s mostly because they’re newer EVs and peak that are sold at the price of luxury cars.
Although cheaper, electric vehicles come with trade-offs
One of the biggest knocks against electric vehicles is that charging the car battery is impractical if you don’t have access to commercial charging stations or at least a Level 2 charger at home. And even with the faster Level 3 chargers you find at commercial stations, it can still take up to 30 minutes to fully charge your EV.
“Time is money if you have to sit for a few hours waiting for your car to charge,” says Matt DeLorenzo, Senior Editor of Kelley Blue Book. “That’s the competitive disadvantage of electric vehicles, they’re inflexible when it comes to refueling requirements, whereas a petrol car you only have a few minutes at a gas station and you’re back on the road. .”
Since there are only around 46,000 commercial charging stations compared to 150,000 gas stations, potential buyers will want to make sure there is one nearby, using this interactive map. And since the average range for electric vehicles is less than 200 miles, you might want to consider a hybrid electric vehicle if you frequently take long-haul trips. A hybrid has both an electric motor and a gasoline engine, allowing you to switch between the two depending on how far you plan to travel.
“If you only have one car, I think you better own a plug-in hybrid,” suggests DeLorenzo. “With gasoline at $5 a gallon [in some parts of California], you’ll get a car with an electric range of 30-50 miles, and if you’re only going 15-20 miles, you could use it primarily as an electric vehicle. But if you’re on a road trip or there’s a power outage, you have a gas engine to lean on.”
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