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The auto industry is undergoing the most significant change since Henry Ford built his first car production line in 1913. Electric vehicles are taking over and many people are embracing them. Many automakers have made a commitment to only sell electric cars in the future. That future could come sooner than expected, with Jaguar planning to go all-electric from 2025, Volvo from 2030 and Lotus from 2028.
In addition to saving the planet by going green, electric cars promise to make it cheaper to own and operate a vehicle. While this is true with increasing advancements in electric vehicle technology, there are costs that people rarely consider when purchasing an electric vehicle. Read on to find out some of the costs of owning an EV you need to know before you buy your next electric vehicle.
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Electric vehicles cost more than ice vehicles
Electric vehicles are simply more expensive to buy than their gasoline or diesel equivalents. For example, the Mini Cooper Hardtop costs $ 24,250 while the electric mini costs $ 30,750. The Hyundai Kona costs $ 21,440, while the electric version of the same car costs $ 38,330. While the Kona Electric is more powerful and will save money on monthly running costs, the EV’s much higher purchase cost is still worth noting.
Additionally, government incentives are one of the factors that make electric vehicles much cheaper. However, not all electric vehicles are eligible for the $ 7,500 incentive; therefore, they lose this advantage over their ICE counterparts.
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Higher insurance premiums than traditional vehicles
Electric vehicles attract higher insurance premiums due to several factors. Electric cars are more expensive because they are loaded with advanced technologies such as high capacity batteries and other sophisticated auto parts. Repairing or replacing these electric car parts is expensive, hence the high insurance premium.
Additionally, electric car battery replacements are common because the batteries have a given lifespan or lifespan before they start to underperform or stop working. Lithium-ion prices are currently high, and until costs start to drop or alternative battery technology is introduced, insurance premiums will remain high.
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Battery rental programs
Popular EV models come with battery rental programs to reduce the overall cost of the car. This system means that car owners buy most of the vehicle as they normally do, but they have to lease the battery, which remains the property of the manufacturer. The owner must then pay a monthly rent for the battery. The rental premium depends on the number of miles you plan to travel and the length of your lease registration.
Typically, rental programs cost around $ 68 to $ 135 per month, depending on the car and use. The downside is that you have to keep paying monthly for as long as you own the vehicle.
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Cost of installing the EV charging station
Charging an electric car at home helps reduce running costs in the long run. When installing a home charging station, prices vary depending on the location, the type of station to be installed and whether it is portable or wired to the home. According to Home Advisor, level 1 charging stations start from $ 300 to $ 600, level two costs between $ 500 and $ 2,200, and level three costs between $ 20,000 and $ 50,000. Note that level three is designed for business purposes.
Connected charging stations cost more than wired stations. Add in the cost of installation labor which varies by type of station, and you have a big bill handy.
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Public pay-as-you-go billing is expensive
Charging an EV at public charging stations costs a lot more than if you have a home charging station. For example, in California, drivers pay around 30 cents per kWh at a Level 2 station and 40 cents per kWh for fast charging. It’s about $ 16 to quickly charge a car with a range of 150 miles from empty to full.
Charging the same car at home and in the same condition where the average cost of electricity is 18 cents per kWh costs around $ 7. This is more than double the price of public charging, which shows the importance of installing a home charging station.
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Increased costs with increasing demand for range
VE customers want a car that can do the most on a single charge. A Transport Research Laboratory (TRL) study found that only half of consumers are likely to buy an EV with a range of 200 miles or less and that 90% of them would consider buying the same EV if its range was increased to 300. miles.
The increased mileage requires larger batteries. These come at a price; customers have to pay more for the EV, and the extra weight of the batteries affects the dynamic performance of the car while reducing its efficiency.
For at least two decades, ICE car makers have been forced by law to reveal details of their cars, and this has enabled the growth of an ecosystem of auto repair shops, aftermarket and recyclers. However, the rise of electric vehicles has brought the intellectual property factor back into the auto industry. Manufacturers of electric vehicles can prevent an owner from tampering with the car, because cars are just containers of electronic equipment, just like Amazon’s Alexa or the iPhone.
As a result, car owners are held hostage by car manufacturers and cannot use their affordable local mechanics and have no choice but to accept large repair bills.
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Lower resale value compared to ICE vehicles
While the resale value of electric cars has increased, traditional gasoline-powered vehicles currently have better resale value than electric vehicles. According to Bloomberg Quint, electric and plug-in hybrid cars have an average resale value of less than 40% of the original price. Conventional cars are on average around 50% to 70%.
Consumers are concerned about the performance and quality of old batteries, which is hurting the used electric car market. In addition, the electric vehicle market is affected by customer preferences, with many people looking to drive trucks and SUVs, but there are still few electric options for SUVs and trucks.
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