How Expensive Is It to Own an Electric Car?

Does it cost more or less to own an electric car than a gas-powered vehicle? Some say the cost of ownership is much less for an EV than an ICE vehicle.

The world is quickly transitioning from gas and diesel-powered vehicles to those powered entirely by electricity. Although much better for the atmosphere, creating cleaner air quality in large cities where smog is an issue, other environmental concerns are present. That aside, we’re exploring the cost differences between gas and electric vehicles. How expensive is it to own an electric car?

Are EVs more expensive than ICE vehicles?

The price gap between gas-powered vehicles and EVs is closing. The average price of a new ICE vehicle is $48,520, while EVs cost $55,488 on average. Once you factor in the $7,500 Federal EV Tax Credit, you’ll close that gap and won’t need to worry about the price difference. With prices of EVs falling as new technology is developed to make them more affordable, you could pay less for an EV compared to a similar gas-powered model in the near future.

Is it more affordable to recharge electric car batteries than filling a gas tank?

Gas prices fluctuate regularly, which is shown on the station signs around the country. Electricity prices also fluctuate, but we don’t notice this nearly as much because it’s often hidden in our monthly electric bill. When charging your electric car at home, the most affordable time is overnight, during non-peak hours. If you recharge your EV batteries at public charging stations, you’ll pay more than at home, but the overall cost is typically much less than refilling a gas-powered vehicle.

Replacing EV batteries is extremely expensive

You could easily pay as much as $13,000 to replace the battery pack in your electric vehicle. This is the most expensive part of the car and is typically about 30% of the overall cost. Thankfully, the federal government mandates EV battery warranties cover this part for at least eight years or 100,000 miles. Typically, if a battery can no longer achieve at least 80% of its initial capacity, the batteries will be replaced by the automaker, but this should happen during the warranty period.

EV maintenance should be less expensive than ICE vehicles

Electric cars have fewer moving parts than ICE vehicles, which means there isn’t nearly as much to maintain. Still, you’ll want to perform a comparison of vehicles before committing to the maintenance costs of an EV. The average cost of repairs and maintenance for some electric vehicles is nearly the same as gas-powered models, which makes this a moot point. Still, some EVs are much more affordable to maintain and require fewer visits to the service center, making them much more enjoyable to drive.

It’s more expensive to insure an EV than a traditional vehicle

Insurance companies must weigh the costs before offering coverage at specific rates. Currently, there are fewer qualified service centers for EVs. These vehicles are much more expensive to repair because of the battery pack, and EVs make up a smaller percentage of the car population. As more EVs are added to the mix, we expect insurance costs to level off but not drip. Before buying or leasing an EV, find out how much your insurance premiums will increase.

Do EVs depreciate faster than ICE vehicles?

The overall value of a vehicle is calculated by depreciation. Currently, electric car owners experience much faster depreciation rates than traditional gas-powered vehicles. The depreciation difference could be the lack of demand for used EVs in the current market, which will likely change as more EVs are offered. As current models with longer driving ranges hit the market, we’ll see better depreciation rates for EVs. Until then, if you buy an EV, expect to drive it for a long time because it won’t be worth much in trade.

Is electric driving range a hoax?

When you fill a tank of gas with fuel, you can drive that vehicle until it’s nearly empty before refueling. Although similar factors impact ICE vehicles as EVs (city vs hwy, towing, environment, road conditions, etc.), electric vehicles don’t reach the posted range often. If you want to protect your EV batteries, it’s advisable to only charge them to 90% or less and recharge once they reach 10% capacity. Also, if you charge your electric car at a public station, the fast-charging system will only reach 80% capacity. This means you’re never actually using the full driving range of your EV.

Electric cars are cleaner and emit no harmful emissions into the atmosphere, making them good for the environment, but EVs have some costs that make them more expensive to own and drive than traditional gas-powered vehicles.