Consumer Reports has found that over the lifetime of electric vehicles and traditional cars, electric vehicles tend to be less expensive than their gas-powered cousins. What’s also true, however, is that electric cars can be more expensive upfront. This includes potentially higher insurance rates, more expensive parts/repairs, and higher state registrations. If you are considering buying an electric vehicle, be sure to check out how much electric cars are really going to cost you.
Here, The Manual investigates the hidden costs of electric vehicles for consumers to answer the question: How much do electric cars cost, really?
Electric vehicles cost more and prices are rising
An August comparison by car-buying database iSeeCars found that prices for electric vehicles are rising – fast. According to research, prices for electric vehicles have increased by 54% from 2021 to 2022, while gasoline-powered cars have only increased by 10%. To assess this increase, iSeeCars analyzed more than 13.8 million used car prices, comparing cars sold between January and July 2021 and purchased between January and June 2022.
Several factors drive sticker prices up. A global shortage of chips has led to huge industry-wide production shortages, sending retail costs skyrocketing. Rising gasoline prices have led to an increase in demand for electric vehicles, which Econ 101 says is driving up prices.
Cox Automotive, parent company of Kelley Blue Book, quoted the “average transaction price” for electric cars at $65,291 in September 2022. Meanwhile, gas-powered vehicles have an average transaction price of around $48,100. $. Although the costs may be lower over time, it is a significant initial investment to achieve these savings.
Higher insurance rates
MoneyGeek’s analysis of car insurance premiums for 17 current electric car models showed that electric vehicles cost 15% more to insure than internal combustion engine (ICE) vehicles. By comparing the corresponding types of electric vehicles and gasoline cars, this research led to a cost increase of 6% to 40%. Additionally, 15 of the 17 electric vehicle model insurance rates were above a comparative national average.
The reason EVs have higher insurance rates than ICE cars comes down to technology. Electric vehicles contain more high-tech parts – sensors, expensive computers and performance components. As we just saw, electric vehicles also cost more than their gas-powered counterparts. Crashing or otherwise damaging the surface or interior of electric rides will simply cost more to repair, making them more expensive to insure (per MoneyGeek).
Higher registration fees
State gasoline taxes are assessed to help pay for road repairs and infrastructure problems caused by constant road use. However, fully electric vehicles do not need fossil fuels to operate, allowing owners of electric vehicles to avoid these essential taxes.
As a result, some states have added additional registration fees for electric vehicles to compensate for lost revenue. According to the National Council of State Legislatures, 31 states charge special registration fees for plug-in electric vehicles, and 18 states also charge additional fees for plug-in hybrid vehicles. Registration fees range from as little as $50 per year in Colorado, South Dakota and Hawaii, to an extra $225 for electric vehicles in Washington. The purpose of this tax is not only to keep the roads rolling, but also to serve as an investment in future EV infrastructure. Washington uses $75 of its fee assessments to grow its charging network; Alabama uses $50 of its $200 annual fee (according to NCSL).
These additional expenses are expected to increase over time. Several states have set registration fee increases along with inflation metrics to compensate for the diminishing purchasing power of gasoline taxes.
Opportunity costs of charging time
While super-fast EV battery charging isn’t too advanced, it still takes an average of 15-30 minutes for EVs to charge to their fastest clip. That’s already a lot longer than a typical trip to the pump. Electric vehicle owners who charge through a Tier 1 port (eg, a typical household outlet) may have to wait six to 12 hours for the batteries to reach desired power levels.
Drivers planning to use electric vehicles for long journeys could waste precious hours waiting for cars to charge. At least owning an electric vehicle requires time to plan how and when the cars are going to be used. This mental and temporal space costs money and time that could be spent on something more lucrative and/or productive. This consideration should not be overlooked when considering a significant investment in an electric vehicle.
Home charging stations
One solution to long charging waits is to install a home battery charger. Level 2 chargers are 10% more efficient than Level 1 models, which is about four times more kilometers per hour of charge. Level 2 home chargers not only take less time to fill, but they also reduce electricity bills with fewer power units consumed. While a great way to recharge quickly, high-speed chargers don’t come cheap. They range from $350 to $950 on Amazon. Retrofitting the home is also expensive, typically costing homeowners at least $1,000 for a certified installation.
Expensive battery replacement is sneaking up soon
Per Auto Week, every EV purchased in this country has a battery warranty “which extends for at least eight years or 100,000 miles.” Driving 10,000 to 12,000 miles a year means new EV owners won’t have to worry about battery degradation for eight to 10 years. When they do, however, electric car drivers face a big bill — between $5,000 and $10,000, according to Consumer Reports.
The non-profit consumer advocacy site explains that electric batteries degrade and decrease in capacity over time (much like cell phone or laptop batteries). Today, electric vehicles lose about 2% of their autonomy per year. Five to 10 years later, it becomes noticeable. Although mechanics can service electric vehicle batteries, at some point the entire battery will likely need to be replaced.
As the federal government continues to encourage domestic production of electric vehicles, the market for electric vehicles is only expected to grow. One solution is to wait out high gas prices and supply shortages. The hidden costs of EVs described above should not necessarily inhibit EV buyers, but rather should inform such an expensive long-term investment.
#Heres #full #hidden #costs #electric #cars