What Does It Really Cost to Own an Electric Car?

What Does It Really Cost to Own an Electric Car?
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An automotive revolution is in its early stages. Electric cars dominate headlines, and they’re touted as greener, more efficient vehicles that cost a fraction of a gas-powered vehicle to operate. But there are hidden costs of owning an electric car that potential shoppers probably haven’t considered, and those costs can play a factor in your decision about which car to buy.

The hidden costs of owning an electric car

Most of us know the benefits of driving an electric car—lower maintenance costs, fewer moving parts that can break down and environmental benefits from switching away from fossil fuel-powered engines. But there are trade-offs for going electric, and they usually manifest as higher upfront costs.

Initial EV purchase costs

Purchase price is a major difference between gas-powered and electric cars, although EVs are moving closer in initial cost. Take the Chevrolet Bolt EUV for example, with a starting price of $33,995 for a well-equipped but not luxurious LT trim level. A comparably equipped Chevrolet Trailblazer LT begins at $25,340. That represents a premium of about 25% for an electric vehicle. The initial sticker price definitely plays into the calculation.

That’s not all there is to purchase pricing. EVs may be eligible for as much as $12,500 in tax credits. Whether or not you’re eligible for the credits is important because they could actually put the purchase price on par with—or below—a traditional vehicle.

Take a look at a premium EV such as the Tesla Model S. It starts at $99,490 for a dual motor, all-wheel drive version with an estimated range of 375 miles. A popular comparison could be the Audi A7 Sportback, with a sticker price for the top-end Prestige trim starting at $78,350. That’s a difference of around $20,000 to go electric over gas-powered. Getting the tax credits would be crucial in making the costs more comparable.

Charging equipment

Unlike gas-powered vehicles, you probably want to have your own fuel station at home. Most models come with a Level 1 charger that plugs into any 110-volt household outlet, but that would take days to fully charge your car.

A Level 2 charger is a good bet for home charging. Even though they’re considerably less than they used to be, a Level 2 home charger can easily be $700 and up for a high-quality, brand-name version.

If you want even faster charging, you need to go to an EV charging station.

Electricity

How much does charging an electric car at home cost? One of the variables that swings widely from state to state, and even from county to county, is electricity pricing. To get a ballpark average, look at the cost to charge electric car batteries based on an average United States residential rate of 13.31 cents per kilowatt hour.

The most common EV sold in 2021 is the Tesla Model Y, commonly manufactured with a 75-kWh battery pack. At the average US residential rate, charging your Tesla Model Y battery from completely empty to full costs $9.98.

What throws a wrench into the calculations and can double the energy bill is charging during peak times. Between 1:30 p.m. and 8:30 p.m. is when your electricity charges cost the most. Inversely, charging your car during the off-peak hours of 10:30 p.m. and 6:30 a.m. could lower the costs of topping up your battery.

Keep in mind these are broad generalizations based on typical energy consumption practices in the US. Track down your electric bill to see what you actually pay.

Compared to a gas-powered car, you pay less to charge an EV than you pay to pump gas into the tank.

Charging on the go

Maybe you forgot to charge your car overnight or you’re on a roadtrip with the family. What can you expect to pay at a public charging station? Logically, pricing varies by state, just like residential rates. Although there are select locations where you pay by time, most are by the amount of charge you receive in kWh.

You pay more at a public charging station than residential rates. Here are a few comparisons:

  • California’s average home rate is 19.9 cents per kWh, where Electrify America’s rate is between 31 cents and 43 cents per kWh.
  • Florida’s average home rate is 11.37 cents per kWh, and Electrify America’s rate is between 31 cents and 43 cents per kWh.
  • Arkansas’s average at home is 99.9 cents per kWh, compared to 12 cents to 32 cents at a public charger.

Rates depend on how much power you need and if you’re a member or not. Using the lower rates for our Tesla Model Y example, Californians and Floridians can expect to pay $32.25 for a full battery charge-up while Arkansans would pay just $9.

Battery leasing

EV batteries are the most expensive part of the car and can potentially fail or wear out over time. That could influence some drivers to play it safe and stick with internal combustion engine vehicles. Carmakers are exploring the option for drivers to buy the vehicle but lease the battery. That keeps the initial purchase price 30% to 40% lower and reduces the potential of being stuck with an astronomical battery replacement bill down the road.

Hyundai is exploring the possibility of battery leasing, but there aren’t any real-world numbers yet. Drivers would need to remember that leasing costs would continue even after the car itself is paid off.

Maintenance

EVs don’t need oil changes or engine air filters, but there are maintenance costs to keep them in good mechanical order. Like any car, there are tires, brakes and wiper blades to change in addition to suspension and steering parts and wheel alignments.

You might not expect fluid changes, which can be one of the hidden costs of owning an electric car. The thermal management system contains coolant that needs to be exchanged, and the brake fluid will also need to be flushed periodically. Some models may also have transmission fluid that needs to be serviced from time to time.

All in all, there are fewer systems that need servicing, so although the maintenance costs may not have been expected, they remain significantly less on an electric car over the life of the vehicle. Just how much difference is there? A Tesla Model 3 costs approximately $190 per year in maintenance while a Toyota RAV4 costs nearly $1,000 per year to maintain

Insurance

Beware of sticker shock when you insure your new EV. Compared to their gas-powered cousins, EVs cost more in insurance. The disparity makes sense, though. The average electric car costs more than a gas-powered vehicle, and there’s no denying that purchase price makes a difference to insurers because claims payouts would need to be higher. Currently, EVs are costlier to repair because only certain shops have the equipment to deal with high-capacity batteries.

A Tesla Model 3 costs an average of $2,283 per year for insurance, about $600 higher than the average insured rate in the US.

Resale value

When you go to sell your EV after a few years—you’ll probably want an upgrade by then—you might be surprised it’s dropped so much in value. EVs have a reputation for above-average depreciation rates.

A typical gas-powered car will depreciate around 39% after three years, while an EV will crater by 52%. In general, car buyers, who fear complications from second-hand advanced technology, are hesitant to buy used EVs—a leading reason for the steep depreciation. The demand for EVs is there, but longevity has yet to be proven. The exception? Tesla models. They’ve earned the industry’s trust, with a Model 3 depreciating just 10.2%.

Repair costs

Anyone can change wiper blades, swap a set of struts or change a pair of tires. But if something goes seriously wrong with the technology, EV owners might be in for a shock. Battery packs can easily cost $12,000 and up—that’s the cost of a Chevy Bolt’s battery pack recall parts—and other systems, such as the Advanced Driver-Assist Systems and infotainment screens, could run up massive repair bills.

Because there are no right-to-repair laws in place, carmakers can hold you hostage for any issues that come up. Diagnostic systems and parts might only be available from the dealer, and there’s almost always a pricing premium for servicing with the dealer.

Your time

Fueling up a gas tank from empty takes maybe five to seven minutes on average. But when your EV’s battery is down to just half, charging it back to full takes much longer. Charging a Tesla Model Y 75kWh battery at 50% at home with a Level 2 charger would take approximately four hours. The fastest available rate is at a Tesla Supercharger station, where topping up half the power range would take about 15 minutes.

If you don’t properly plan for charging, there’s one hidden cost you can never get back: your time.

Are electric cars cost effective?

Generally, there are more costs associated with driving an EV than people expect. There are still parts to repair and systems to maintain, the insurance is higher and electricity costs are wide-ranging. Most prohibitive is the initial purchase price, which is sometimes tens of thousands more than a gas-powered car.

However, in the long run, an EV will likely save you money on reduced fuel expenditures alone, assuming you keep the car for at least a few years. What’s more, you can feel good knowing that your car isn’t contributing to pollution at nearly the same rate as vehicles running on fossil fuels.


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Disclaimer: The above is solely intended for informational purposes and in no way constitutes legal advice or specific recommendations.