The Economics of Owning an Electric Car: Is It Really Cheaper To Own an EV?

Electric vehicles do hold some advantages against their ICE equivalents regarding operating costs. They need less maintenance as they have fewer moving parts, and a full charge costs less than a full tank of gas. But this does not necessarily mean that owning an EV is cheaper than owning a gas-powered car.
People consider electric vehicles as an economical alternative to ICE cars 6 photos
Photo: Ford
Common mistakes people make when choosing their electric carCommon mistakes people make when choosing their electric carCommon mistakes people make when choosing their electric carCommon mistakes people make when choosing their electric carCommon mistakes people make when choosing their electric car
When it comes to electric vehicles, it’s hard to put in numbers exactly how much you need to spend and how much you would save compared to an ICE vehicle. It all depends on many factors, including where you live, how much the gas and the electricity cost, and how you use your EVs. It’s easy to compare just the price of electricity and gas and jump to conclusions. Still, there are other factors, and things get quickly complicated.

Many people used to make a similar mistake in Europe when considering buying a diesel vehicle instead of a gas one. Diesel fuel used to be cheaper, and diesel cars have a better range, so many Europeans bought diesels, despite the more significant upfront price. They were so fixated on the cost of fuel that they paid a lot more money on the car than they were saving on fuel throughout the projected life of that car.

With electric vehicles, things look much more straightforward since not only fuel (electricity) is a lot cheaper, but maintenance is also non-existent. Besides changing the cabin filter and the wipers from time to time, filling up the screen wash tank, and at some point replacing the tires, there are not many things to do on an electric vehicle. Even with increased costs of electricity and public charger rates, electric cars are pretty cheap to run, especially when they are charged at home.

But to enjoy that last part, you need to buy one, which is where things go awry. Just like almost everything, electric vehicles have gone up in price. The cheapest Tesla Model 3 starts now at $46,990 in the U.S., whereas in Europe, it can cost as much as 54,990 euros ($59,000). Keeping with the U.S. statistic, the average electric vehicle price was $51,532 in April 2021, according to Kelley Blue Book. This was before recent price hikes, inflation, and raw materials scarcity came into play, so it’s maybe at least 10% higher now.

The same source shows that the average price for a gas compact car was $22,798, whereas a compact SUV/crossover was $31,033. Industry-wide, the average price of a new vehicle was $40,768, EVs included. There’s a considerable discrepancy between the price of an average EV and the price of a similar ICE vehicle. Let’s take the averages from this statistic. You can see that an average American ICE vehicle already comes with at least 2-4 years’ worth of free fuel, thanks to the lower upfront price.

The maintenance is modest on an electric vehicle, but it can go up unexpectedly, depending on your driving style. Electric cars are powerful, and most of them have the acceleration performance of a sports car, which is why many people drive them like they are sports cars. This leads to faster wear on the chassis components. EVs are also heavier than combustion vehicles, which adds to the wear.

Because the EVs are heavy and they are driven hard, they need new tires more often than their ICE counterparts. EV tires are also more expensive than regular tires, just because they need to carry more weight. Not only that, but EVs use energy-efficient tires, and they need to be silent, too, thus having a special foam inside to keep the road noise low. This makes them inherently more expensive than regular tires.

Considering all these, electric vehicles start to look more and more like ICE cars in terms of cost of ownership. Yes, it is cheaper to charge them, but few people can afford an EV, which is why only 24% of Americans want one. And the dream of having EVs as cheap as ICEs will remain just a dream, as the battery materials prices are skyrocketing.
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About the author: Cristian Agatie
Cristian Agatie profile photo

After his childhood dream of becoming a "tractor operator" didn't pan out, Cristian turned to journalism, first in print and later moving to online media. His top interests are electric vehicles and new energy solutions.
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