Can I Afford An Electric Vehicle?

In 2015, America had the best year on record for vehicle sales since the industry emerged in the early 1900s. This is great news for the economy but also great news for the electric vehicle market. With a recovering economy and more demand for EVs, these environmentally friendly vehicles are making a come-back since their debut in 1890! So, how much does it cost to own an EV and can you really afford one?

Cost of Purchase: With both federal and state government subsidizing the production and sale of EVs, today, they are relatively as affordable as gasoline and diesel powered vehicles. Depending on your budget and taste, you can get EVs for prices ranging from as low as $23,000 (a Mitsubishi i-MiEV for example) to over $80,000 (a Tesla for example). Beyond the purchase price, however, is the incentives provided by the government for the purchase and maintenance of EVs:

  1. For EVs purchased after December 31 2009, there is Federal Tax Credit ranging from $2,500 to $7,500 depending on the vehicle’s weight rating and its battery capacity.
  2. For EV charging stations, there is a Federal Tac credit of 30% of up to $1,000 for consumers installing a charging station in their residence.
  3. Multiple states offer reduced vehicle registration fees, exceptions from otherwise necessary yearly or bi-annual inspections, and more.

Cost of Fuel: At an average cost of about $2.30 for a gallon of diesel or gasoline compared to $0.12 per kWh of electricity, electric vehicles are relatively cheaper to “fuel” than gasoline and diesel powered vehicles. With an average fuel economy of 28.4 mpg compared to 30 khw per 100 miles, the average EV owner spends about half as much on powering their vehicle as those who own conventional gas or diesel cars or trucks. As an example, if you typically spend $150 a month on fuel for your gas or diesel vehicle, you’ll likely save $75 or more if you switch to an electric vehicle remembering that the cost to fuel it now becomes a part of your light bill. Plus, you can fuel up an EV for free at certain business that have charging stations in their parking lots.

Cost of Maintenance:  Simplicity is a big factor in keeping the cost to maintain EVs low. This is not to stay that the maintenance for EVs is lower than for gas or diesel powered vehicles, but with fewer moving parts under the hood, it is certainly less complicated. The cost to maintain electric vehicles has not been proven to be more or less expensive than their more popular counterparts. The cost of ownership over a 3 or 5 year period has been noted as higher for EVs due to the previously higher purchase prices, but that has changed over the last 12 to 24 months. As noted earlier, purchase prices are not only lower today that in previous years, but federal incentives providing a return on your taxes for the purchase of an EV may make them less expensive on this front. In terms of on-going maintenance, don’t expect to spend less than for a gas or diesel vehicle but you likely won’t spend more either. As with any new vehicle purchase, make sure to negotiate a really good maintenance package to cover these costs for the first few years.

More to Consider

Cost to the Environment: This is of course difficult (if not impossible) to quantify on an individual level but there is something to be said for the cost that greenhouse gases, like those produced by gas and diesel vehicles, has on our lives. You may not be able to directly tie this to your personal finances but, if you include things like higher (home/renters) insurance fees, pricier produce, and a slew of other negative effects caused by a warming planet, you may find that driving an EV can have a big impact on your overall carbon footprint. While a data driven argument for this yet to come, many of us can agree that saving the environment through smarter transportation choices is an investment worth making.

Increased National Energy Security: With the United States’ aggressive push for ensuring greater energy security for future generations, the wider adaption of the use of electric vehicles will certainly contribute massively towards this goal. By reducing the dependency on fossil fuels which are largely imported, Americans benefits in many ways. This can include less volatility in the cost of fuel to more and bigger subsidies for electric powered machines. A more stable cost of fuel and more subsidies for green energy means savings for the population as a whole in more ways than one.

Despite what many people may believe, electric vehicles are now much more affordable to acquire and maintain than before. With the help of technology and innovation in research and development, electric vehicles are sure to become even more affordable in the years to come.

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