Total Cost of Ownership of an Electric Car
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It’s easy enough to pinpoint the MSRP for a car, but most calculations use the lowest base price, rather than what most people pay before driving off the lot. Options and trim levels can mean a swing of thousands of dollars. Then, there are dealership incentives and deals, regardless of the model, that can add thousands more in variation. If you want accuracy, use a number that comes directly from the dealer for the specific car you plan to buy.
Here are seven other things you should know about total cost of ownership of an electric car.
EVs benefit from not requiring oil changes or other maintenance costs for exhaust systems. Studies have shown that this represents a 35 percent decrease in cost over time. Some calculations peg this to about 3 or 4 cents per mile of maintenance cost in an EV versus closer to 6 cents in an internal combustion car. But it’s hard to know for certain.
2Tax Credits and Other Incentives
Nearly everybody immediately drops $7,500 directly off the price of an EV, because that’s the “up to” federal tax credit amount that could be used on your tax returns. But many tax-paying buyers end up claiming less than that, due to your specific tax liability in the year that you are claiming the credit, and the Alternative Minimum Tax. (State and regional rebates are also key factors, and are very much based on geography.)
EVs have not been on the market long enough for us to know what a robust used electric car market looks like. In times of high gas prices, conventional hybrids have done very well. But it’s a harsh reality that EV range diminishes over time, especially when the newer models have longer range (making older models feel less capable). On top of that, what happens to used EV prices when the market discovers that LEAFs and other cars have 10 percent or less range after several years due to wear? Only time will tell.
4Price of Fuel
The common assumption is $0.12 a kilowatt-hour for electricity and about $4 a gallon gas. There’s little doubt that lower fuel costs put EVs at a distinct advantage over time. That edge can grow wider when gas prices spike. But the actual cost for a kWh varies widely across the U.S., and can swing wildly even within a location based on utility rate plans, season, tiers, time-of-use programs and home solar. Forecasting actual EV fuels costs is a tough challenge.
Based purely on anecdotal information, EV owners clock fewer miles per year in their electric cars (given limited range) than in internal combustion automobiles. So, using a national average of 12,000 or so miles in a lower cost-per-mile analysis is problematic.
6Home Charging Equipment
It’s the rare calculation that figures in anywhere from $500 to $1,500 of upfront cost for buying and installing your first EVSE, the 240-volt wall-mounted box that funnels electricity into your car.
A number of forward-thinking insurance companies offer small discounts for EV owners, but it’s also common for vehicles with advanced and unproven technology to get slapped with higher rates.
New to EVs? Start here
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