Thursday, March 23Welcome

The Current Cost of Car Ownership: Is It Time to Switch to an EV?

Over the past year, drivers have had to check their phones (or drive to the local gas station) every day to find out if gas prices are rising or falling. Gasoline prices have fallen since hitting insane numbers this summer, but with the national average hovering around $3.66, a full tank of gas still costs a lot these days. You may be shocked. Better than the average $5 we saw earlier this summer, but not great. It’s not just gas. Even buying car parts and cars at an affordable price can be difficult, making car ownership an increasingly expensive and difficult task.

As automakers shift their focus to electric vehicles, some shoppers may be looking to switch to electric vehicles to save money, thanks to the high cost of gas and the prevalent ownership of gasoline vehicles. Hmm. At first glance, EVs seem more affordable to own in the long run than gas-powered cars because of the electricity bill and minimal maintenance. If you’re considering making the switch to EVs, here’s what you need to know about the cost of owning a car.

The 2022 GMC Hummer EV Pickup hits the desert with a mountain backdrop.

EV is very expensive

Pricing continues to be a big issue for EVs. Forget expensive niche cars like the GMC Hummer EV or the Rimac Nevera. All-electric versions of regular cars are much more expensive than expected. Take the Hyundai Kona as a classic example. Prices for petrol cars start at $35,245 for the Kona Electric, while he is $23,285 with a mandatory destination charge. Aside from the electric powertrain, the two models are similarly equipped. The situation is similar with the Ford F-150 and F-150 Lightning. Comparing similar configurations, the petrol model starts at $43,185 and the EV starts at $53,769.

To put the big picture in perspective, Kelley Blue Book reports that the average price paid for a new car in October 2022 is $48,281, compared to $64,249 for a new EV. Either way, you’re paying a lot more for a comparable electric car.

Beyond pricing, some EVs can be difficult to buy due to limited availability in some states. Back to Kona Electric, electric SUVs are only available in 11 states. If you don’t live in one of those, then either you’re out of luck or you have to travel out of state to buy a model.

A mechanic overlooking the engine bay of a car.

Large difference in maintenance costs

A big advantage of EV is the reduction of maintenance costs. With no gas engine and fewer moving parts, EVs are cheaper to maintain. To find out how much your upkeep costs, you can use AAA’s Driving Cost Estimator, which lets you plug in your state, vehicle, and annual mileage.

For easy comparison, we will stick with Kona and Kona Electric. California, 15,000 miles per year and 55% city miles. AAA’s estimate calculates Kona Electric’s annual maintenance/repair costs at $754. The gas-powered Kona is estimated to cost $1,427 to maintain/repair for one year. Over five years, Kona Electric’s maintenance/repair costs $3,771, while Kona’s normal estimate is $7,138.

AAA estimates the price of regular gas at $5.75 (California average) and a petrol-powered Kona at $0.70 per mile. Kona Electric’s cost per mile is $0.72 and the electricity bill is estimated at $0.272. It is important to note that the per mile figures also include fuel, maintenance/repair, depreciation, insurance, fees and taxes, and finance charges in California.

A man plugs in a charger into his blue 2022 Porsche Taycan.

charge vs gas

Electricity charges for charging electric vehicles are difficult to determine. There are so many variables to consider, such as where you live, what kind of car you own, what kind of charger you use, what kind of on-board charger your EV has, and so on. There is no point in setting rough prices. Let’s still do our best. Note that your situation is certainly different.

According to the U.S. Energy Information Administration, the average home charging price in the U.S. in July this year was $0.15 per kWh. Doing all the numbers for 15,000 miles a year, 120 MPGe total, and $0.15 per kWh, a Kona Electric charge for a year is $632. Using the EPA website data and figures for a gas-powered Kona of $3.66 per gallon, 15,000 miles per year, and 32 mpg total, you’re spending $1,700 per year to fill up your Kona.

Overall, depending on where you live and the type of charger you use, it looks like EVs can be much more affordable to fuel than petrol cars.

A lineup of Tesla electric cars lined up in front of a parking lot charger with trees in the background.

out of your control

The new Inflation Reduction Act (IRA) significantly changes which vehicles qualify for the federal tax credit. EVs require a final assembly point in North America, a specific percentage of critical minerals extracted or processed in the United States or a free trade partner, and a minimum percentage of battery components assembled or manufactured in North America. They also have to meet tight budget caps based on body style. It wasn’t that hard before, but you still have to do your homework to see which EVs qualify for the tax credit.

A significant number of electric vehicle manufacturers, such as Rivian and Tesla, sell directly to consumers. This simplifies the buying process for EVs, but leaves the car manufacturers in control of the price. Tesla and Rivian EV prices fluctuated wildly in 2022.

2022 Ford Mustang Mach and Mustang in an empty warehouse.

Is one better than the other?

No, it’s not. At the moment, most EVs are too costly compared to similarly equipped gas-powered models to be worth the additional cost savings in fuel and maintenance. Plus, the fact that not every EV sold is eligible for his $7,500 federal tax credit makes things even more disappointing and difficult to understand. You also have to consider the high cost of installing a charger in your home and how frustrating it can be to find one. I have to say that it’s not as easy as it seems because

We strongly believe that gasoline vehicles are still the better option for the majority of consumers for the time being. If gas prices hit $6 again and stay there on a regular basis, we might reconsider our decision, but we also have to lower the price of buying an EV.

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