“The future of the auto industry is electric,” President Joe Biden said during a recent speech in Michigan. “There’s no turning back.”
Electric vehicles (EVs) are dominating the news right now, as manufacturers roll out their new all-electric options. They come with appealing features like zero exhaust, little maintenance and (unlike their hybrid cousins) no gas tank. And with average fuel prices now hovering around $3 per gallon, this might seem like an advantageous time to embrace electric.
But while owning an EV removes the need for costly fill-ups, the bigger price picture is more complicated. Here’s what to consider.
Sticker Price
Prepare yourself, because EVs usually retail for significantly more than similar gas-powered cars. Why? One word: batteries. In a midsize sedan, the battery alone can cost around $15,000 (and weigh some 1,000 lbs!). That pushes an EV’s purchase price up above a traditional vehicle’s by $10,000-$19,000 (or 10%-40%).
● Yes, but… That gap may be closing, as prices for EVs come down and prices for gas-powered cars go up. Unless you’re looking for an electric Porsche or Jaguar (yes, they exist), you can find affordable options. As EVs enter the used car market, they often sell for less than the average price of all automobiles.
Tax Incentives
One way to lower the up-front cost of an EV is with federal tax credits, which can net you up to $7,500 (depending on battery capacity) for many makes and models. That credit disappears when a manufacturer has sold 200,000 vehicles (as Tesla and General Motors have), but you may be able to find other incentives from states, cities or utility companies.
● Yes, and… Further incentives may lie ahead. The government’s proposed infrastructure plan includes $174 billion to nudge Americans toward EVs.
Operating Costs
Since your “fuel” is electricity and you’ll be charging the car at home, your electric bill will go up. How does that cost compare with filling your tank? Gas and electricity prices vary widely by state, but the Department of Energy (which tracks both here) says it costs about half as much to operate an EV. In raw numbers, the typical EV owner can expect to save an average of $800-$1,000 a year.
● Yes but… You will probably need to buy a charger for your home, which can run $500-$2,000 (incentives could help lower that cost), and you may need to pay an electrician to install it. Also, 28 states impose fees on EV owners—from $50 to $200 per year—to make up for road maintenance dollars they would normally get through gasoline taxes.
Maintenance and Repair Costs
Because they have no oil, no air filters and fewer moving parts, EVs offer tempting savings in maintenance and repair costs, which run about $0.012 per mile (vs. $0.028 per mile for gas-powered vehicles). As the odometer climbs to 100,000-plus miles, that cost for electrics jumps to $0.031 per mile—but it’s even higher for gas-powered cars ($0.061 per mile). So what can an EV save you over the lifetime of the vehicle? Around $4,600.
● Yes but… When something breaks on an EV, fixing it will cost more than with a traditional vehicle. Insurance companies are well aware of this, of course, and charge about $450 (or 23%) more each year to insure an EV.
Environmental Impact
With no fuel and no tailpipes, EVs don’t emit carbon dioxide, which is a major contributor to global warming—so buying one is a clear vote for the environment.
● Yes but… Beyond these “direct emissions” are “lifecycle emissions,” which include the effects of a vehicle’s production, distribution and disposal. And here, even EVs aren’t perfect. Manufacturing those 1,000-pound batteries requires lithium, which comes with an environmental cost, and charging the car may increase the pollution from power plants. Still, an EV’s effect on the environment is less damaging than the effect of extracting, refining and transporting petroleum. And you can help Mother Earth even more by using solar panels to power your EV.
Health Impact
In addition to releasing carbon dioxide, gas-powered vehicles release nitrogen oxide, which creates smog. And smog can “trigger health problems such as aggravated asthma, reduced lung capacity and increased susceptibility to respiratory illnesses, including pneumonia and bronchitis,” according to the Department of Transportation. Gas-powered vehicles can also expel “fine particulate matter,” which is linked to asthma, chronic bronchitis and heart attacks.
● Yes, but… No buts about it: EVs remove the cause of these problems.
What’s the Bottom Line?
According to the number crunchers at Consumer Reports, an EV starts saving you money right away—almost $5,000 or more during the first seven years. Over an EV’s lifespan, you could pocket $6,000–$10,000 … and even more for a luxury model.
Consider these two examples:
● Purchasing a Chevrolet Bolt EV will run you $8,000 more than the Hyundai Elantra GT (a gas-powered equivalent) but costs $15,000 less to operate over 200,000 miles. Savings: $7,000.
● A Tesla Model 3 costs less than the gas-powered BMW 330i, and you’ll save around $17,000 over its lifetime. Win-win!
So, When Should I Buy an Electric Car?
Keep an eye on the price of batteries—remember, that’s an EV’s most expensive component. From 2010 to 2020, that cost dropped a whopping 89%, from $1,100 per kilowatt hour (kWh) to $137 per kWh—and may tumble to $58 per kWh by 2030. But in just a couple years, by 2023, the cost is expected to drop to $101 per kWh. At that level, manufacturers could afford to sell an EV for around the same price as a gas-powered vehicle. Similar sticker prices may make purchasing an EV more appealing.
Just remember that the infrastructure to support your car is still being built. Many places have nowhere near enough public charging stations to support roads full of EVs. But that’s today. With a national commitment to EVs and some inevitable technological developments, driving could soon become affordably electric.
Rich Beattie is a former executive digital editor of Travel + Leisure and has written for outlets such as The New York Times, Popular Science, New York Magazine and SKI.
LEARN MORE: How to Save for Buying a Car in 5 Easy Steps
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