8 Hidden Costs Of Owning An Electric Car
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Summary:
Tax rebates, lower maintenance costs, and the ability to make a smaller carbon footprint have attracted lots of new buyers. That said, owning an electric vehicle also comes with hidden costs, including battery replacement costs, higher registration fees, and additional costs to unlock add-ons. Before making a purchasing decision, buyers should be aware that the number on the price tag of their electric car will likely be much lower compared to the actual overall cost.
Electric vehicles are becoming increasingly popular options for auto enthusiasts and tech aficionados alike. With the federal government and states offering rebates and tax incentives to EV owners, along with rising gas prices, now can seem like the time to buy.
However, it’s important to note that despite all the glitz and glam behind car makers like Tesla, there are some hidden costs of owning an electric car that don’t often get discussed. Higher upfront costs, higher insurance premiums, and low resale value can make the actual cost of owning an electric car much higher than what’s on the price tag.
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What is an electric car?
Electric vehicles are solely powered by electricity and don’t use gasoline. Instead, they have a large battery that powers one or more electric motors. Most electric cars have a driving range between 80 to more than 300 miles, with ranges increasing as new models are introduced. Additionally, electric vehicles don’t require much maintenance compared to gas cars.
What are the hidden costs of owning an electric car?
An electric vehicle can require less maintenance than conventional cars, and you can save money by not constantly filling up your gas tank. That being said, there are still some hidden costs that come with driving electric.
1. Higher purchase price
The purchase price of an electric vehicle is always higher than other models of cars. Although certain government programs provide incentives for owning certain types of electric cars, they do not apply to all varieties.
The main reason for their high purchase price is the cost of batteries. Most popular electric vehicle manufacturers invest a lot of money to improve the car’s battery performance, which comes through in the purchase price. The additional technology in electric cars also adds to the cost.
Pro Tip
To reduce the initial cost of the car and make it more appealing to budget-conscious buyers, some carmakers offer the car’s battery as a lease. The monthly costs of renting a battery obviously depend on miles traveled and time spent doing so. However, these costs can climb to nearly $150 per month, depending on usage.
2. Higher insurance premiums
Insurance premiums for electric cars may be higher than for your typical gas-powered vehicle. On average, insurance premiums are about 25% higher than they are for a gas car. One of the main reasons behind this is that electric vehicles can cost more to repair and replace, which raises car insurance costs.
If you’re looking for new or better insurance for your electric car, start comparing the offers below.
3. Charging costs
Not only do most electric vehicles require the installation of a home charging station, but there is also an increased cost of charging at a public charging station. For example, Tesla charges 28 cents per kWh where allowed and between 13 and 26 cents per minute otherwise.
If you prefer to charge your car at home, a home EV charging station has an average installation cost of about $1,500. Of course, prices vary depending on labor costs, permits, and other requirements.
4. Repair costs
Repairs are usually more expensive on an electric car than they are on gasoline cars. This is because mechanics need additional certifications to work on electric vehicles, which can also take longer to fix in general.
For example, Tesla has an annual repair cost average of $832, compared to $652 for all car models. There’s also a scarcity of parts for electric cars, which can drive up prices when it comes to replacing parts.
5. Battery replacement costs
Although battery technology is improving and electric vehicles are becoming more reliable, their batteries don’t last forever. Electric car batteries typically need to be replaced every eight years, or around 100,000 miles.
Depending on the make and model of your car, the average EV battery costs anywhere from $5,600 to $20,000, far more than the average gas-powered car battery.
6. Unlocking add-ons
Many electric vehicle manufacturers offer add-ons that can make the price of their cars increase. Tesla, for example, has a full self-driving feature that costs $10,000 to unlock.
Other add-ons force drivers to pay up to several thousand dollars to unlock, while some come as subscription packs. BMW, for instance, asks drivers to pay an $18 monthly subscription to operate the car’s heated seats (though this isn’t just for their electric cars).
7. Low resale value
The resale value for electric vehicles is much lower than that of gas-powered vehicles. They have an average resale value of under 40% of the purchase price, while gasoline cars are often resold for 50% to 70% of the original cost.
At least some of this disparity is due to the car’s battery, as many worry a used electric vehicle’s battery is no longer efficient.
8. Higher registration fees
Some states are increasing the registration fees for electric vehicles to ensure owners pay their fair share of infrastructure taxes. Since drivers of gas-powered vehicles pay a gas tax to help pay for road repairs and other issues, states want EV owners to have something similar. Fees vary from state to state but can range from $50 to $200 per year.
What are the benefits of owning an electric car?
While there are hidden costs that come with owning an electric car, there are also some benefits that can save you money.
- Lower maintenance costs. Electric cars don’t have as many moving parts and don’t need oil changes or fuel filters. Regenerative braking also can extend the lifespan of the car’s brake pads by using the electric motor to decelerate. This can translate into lower maintenance costs.
- Rebates and incentives. Owners of electric vehicles can receive certain rebates and incentives from the federal government. For example, for electric vehicles and plug-in hybrids purchased after 2010, owners can receive a federal tax credit of up to $7,500. Additionally, local air districts and utility companies offer rebates and incentives to EV owners.
- Smaller carbon footprint. Electric vehicles have a smaller carbon footprint than gas-powered cars. In full-electric mode, an electric car produces zero tailpipe emissions, which dramatically lowers smog and greenhouse gas emissions, even when taking electricity generation into account.
What are some of the most popular electric cars?
Tesla is the name most synonymous with the electric vehicle market around the world. They are the largest electric vehicle manufacturer in the world and have the most global units sold. They are also one of the biggest and most recognizable brands in the larger auto market.
That said, there are still other electric vehicle manufacturers that have seen their popularity grow as EVs become more mainstream. Rivian, Lucid Motors, Chinese companies BYD and SAIC Motor, and Volkswagen have all made a name for themselves on the global electric vehicle market.
FAQs
What is the major disadvantage of owning an electric car?
Although there are several disadvantages to owning an electric car, one of the major issues people have with them is their high purchase prices. Some of the more affordable models cost upwards of $40,000, while higher-end EVs cost as much as $80,000 or more. Unfortunately, that’s not affordable for the majority of the population.
Do electric cars have a lot of problems?
Electric vehicles and plug-in hybrids do typically have more issues than conventional cars. A JD Power survey found that there was an average of 180 problems per 100 vehicles, while EVs reported about 240 problems per 100 vehicles. That said, Tesla fared slightly better than its competitors, reporting 226 problems per 100 vehicles.
How long do electric cars last?
If it’s properly cared for, an electric car’s battery pack should last in excess of 100,000 miles before its range becomes restricted. This is a much better lifespan than that of a battery used by a gas car, which is only about three to five years. You’re not likely to hit the 100,000-mile mark in that short of time, so it’s safe to say EVs last longer.
Do electric cars lose charge when parked?
Electric cars do lose their charge when parked, although it is minimal. If your car’s battery is charged up all the way, it can sit for as long as three months without needing a charge.
What happens when an electric car battery dies?
If you are driving an electric car and it runs out of power, the car will simply stop, and you’ll need to call a roadside assistance service for help with a tow to the nearest charging station. On the other hand, if your EV battery is dead (as in, no longer charges), then you’ll have to shell out the cash for a replacement battery.
Key Takeaways
- Electric vehicles are solely powered by electricity and don’t use gasoline. Instead, they have a large battery that powers one or more electric motors.
- Although an electric car may seem like the cheaper option because it doesn’t require gas, EVs actually come with several hidden costs. This includes higher registration fees, battery replacement costs, repair costs, charging installation costs, and higher insurance premiums, among other factors.
- Some of the benefits of owning an electric car include lower maintenance costs, federal tax rebates and incentives, and the ability to have a lower carbon footprint.
- If it’s properly cared for, an electric car’s battery pack should last in excess of 100,000 miles before its range becomes restricted. This is a much better lifespan than that of a battery used by a gas car, which is only about three to five years.
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