If you're thinking about buying an electric car, you've probably heard a lot of good things. Electric cars are better for the environment, they're more efficient and they'll save you money on fuel costs. That's all true! But many tend to overlook the hidden costs of owning an electric car. Let's explore them.
High Upfront Price
Due to the higher demand for electric vehicles and the more sophisticated technology required to run them, their initial costs are higher than those of gas-powered vehicles. In fact, the average cost of an electric car in 2022 in the United States is $66,000. In contrast, a new gas-powered vehicle costs about $48,000 on average.
Tesla is a leading manufacturer of electric vehicles and is the most well-known name in the industry. Its Model 3 Rear-Wheel Drive is the brand’s least expensive model but already costs upwards of $44,000 without any additional features. The total cost of ownership of Tesla over five years and 60,000 miles is around $0.63/mile ($37,800 total).
Furthermore, even if driving an electric car eliminates the need for gas, you still need to factor in electricity costs.
Additional Registration Fees
Electric vehicles don’t require gas and therefore don’t contribute to gas tax that some states levy to pay for road wear and tear. To make up for this difference in usage, some states charge additional registration fees instead.
There are currently 19 states that impose yearly fees on electric vehicle owners. These fees can range from $30 to $200, depending on the type of vehicle and the owner’s home state. For instance, Colorado charges a $50 yearly fee for a "plug-in electric motor vehicle," while California levies a $100 annual fee for zero-emission vehicles, also known as BEVs.
While most batteries are covered by warranties for 8 years and 100,000 miles, once that warranty runs out, you’re on your own. Replacing the battery in a Nissan Leaf will set you back roughly $7,000 to 12,000 depending on the dealer, while replacing one for the Tesla Model S could cost about $20,000 to $22,000.
The good news is that battery prices seem to be going down which can help save costs in the long run.
Charging Fees and Stations
You'll need to invest in a dedicated charging station and a vehicle-specific charger if you want to keep your electric car charged at home. Installing it typically runs around $1,500, although the price might change based on labor fees and other requirements.
To figure out the cost of charging at home, look at your most recent electricity bill to see your cost per kilowatt hour (kWh). The national average is $0.14.
You can use the following formula to find the cost of charging an electric car at home:
Cost to Charge = (Car Range / Range Per kWh) x Cost Per kWh
Occasionally, you may also find yourself needing to use public charging stations. It is, however, more expensive. One provider, Bluedot, charges a fixed rate of $0.30 per kWh to use one of their outlets. If each kWh provides around three miles of range, charging and getting 300 miles of range will set you back about $30.
For most, the appeal of an electric car comes from its self-driving and auto parking features. However, many are surprised that these features often come at an additional cost. Tesla's full self-driving feature has gone from $10,000 to $15,000 just this year, and Musk claims that Tesla will keep gradually increasing the price as functionality improves and as it becomes fully autonomous.
Pricier Insurance Rates
Since electric cars are more expensive to repair and replace due to their higher cost of parts, insurers often charge more for coverage. On top of that, for some time, only a select few auto body shops had the proper certification and training to work on electric vehicles.
Electric car maintenance costs are significantly lower compared to gas-powered vehicles since they do not require oil changes or engine air filters. Nonetheless, it will still occasionally require new tires, brakes, suspension, wiper blades, and steering. Coolant in an electric car's thermal management system needs to be changed often, and so does the brake fluid. Transmission fluid is another component present in some models that require routine maintenance.
Currently, electric cars still cost more than their gasoline-powered counterparts. But if you live in a state with low registration fees, and don’t use your car for long trips across multiple states or countries, the upfront price tag might actually be lower than what you pay for the gas and maintenance each year. Electric cars are an investment in the future of our planet, but they aren’t perfect yet—so you should do some research before committing to it.
Are you ready to buy an electric car or want to rent an electric car? Contact us for more information if you'd like to rent one out before buying it or if you're ready to make a purchase.