Skip to main content

Dreaming about electric vehicles? These hidden costs may change your mind

Here's a comprehensive look at the possible (and hidden) costs of electric cars

Red electric vehicle plugged in
IvanRedic / Openverse

Have high gas prices or environmental concerns got you considering switching from gas-powered to electric vehicles? Consumer Reports found that comparing electric vehicles and traditional cars, EVs tend to be less expensive than their gas-powered cousins over the life of the vehicle. What is also true, however, is that electric cars can be more expensive upfront. This includes potentially higher insurance rates, more expensive parts/repairs, and higher state registrations. If you’re considering purchasing an EV, make sure to look into how much electric cars are really going to cost you.

Considering factors to hidden EV costs such as EV charger installation costs and questions like how much does EV charging cost? We’re taking a look at the real cost of EVs beyond the MSRP.

Electric car graphic
Rawpixel / Rawpixel

Electric vehicles cost more and prices are rising

A recent comparison by car shopping database iSeeCars showed that electric vehicle prices are rising — rapidly. According to research, EV prices showed a 54% increase from 2021 to 2022 while gas-powered cars rose only 10%. To assess this rise, iSeeCars analyzed over 13.8 million used car prices, comparing autos sold between January and July 2021 and purchased between January and June 2022.

Multiple factors are driving sticker prices up. A global chip shortage has led to huge production shortages industry-wide, sending retail costs through the roof. Higher gas prices have led to increased demand for EVs, which, according to basic economics, drives prices up.

Cox Automotive, the parent company of the auto price guide Kelley Blue Book, said the “average transaction price” for electric cars was $65,291 in September 2022. At the same time, gas-powered vehicles have an average transaction price of about $48,100. While costs might be cheaper over time, that’s a large upfront investment to earn those savings.

7Charge electric vehicle charging station by 7-Eleven with an EV charging at a convenience store
7-Eleven

EVs depreciate faster

All cars lose value once you drive them off the lot — it’s just a fact of life. However, some studies have shown that electric vehicles depreciate faster than standard gas-powered cars. According to the National Automobile Dealers Association (NADA), while EVs save drivers a great deal on the cost of charging vs. the cost of gas, EVs lose almost twice as much value after five years than gas cars. NADA said the average loss of an EV is $43,515 vs. a $27,833 depreciation for a regular car.

As with everything in life, there is an exception to this. While many EVs tend to lose value faster, Teslas have trended in the opposite way, with the Model 3 holding its value much more than other EVs.

EV charging station.
NCDOT Communications

Higher insurance rates

MoneyGeek’s analysis of car insurance premiums for 17 current electric car models showed that EVs cost 15% more to insure than internal combustion engine (ICE) vehicles. In comparing corresponding EV and gas car types, this research showed a 6% to 40% increase in cost. Furthermore, 15 of 17 EV model insurance rates were above a comparative national average.

As to why EVs have higher insurance rates than ICE cars comes down to technology. Electric vehicles contain more high-tech parts — sensors, expensive computers, and performance elements. These additional components used in EVs also cost more upfront than the ones in their gas peers. Crashing or otherwise damaging the surface or insides of electric rides is simply going to be more expensive to fix, making them more expensive to insure.

Electric vehicle symbol.
Michael Marais / Unsplash

Higher registration fees

States assess gas taxes to help pay for road repairs and infrastructure issues made necessary from constant road use. Fully electric vehicles don’t require fossil fuels to operate, however, allowing EV owners to skip out on these taxes.

As a result, some states have tacked on supplemental registration fees for electric vehicles to compensate for the lost revenue. According to the National Council of State Legislatures, 31 states charge a special registration fee for plug-in EVs, and 18 states also charge extra for plug-in hybrid vehicles. Registration fees range from as low as $5State Legislature0 annually in Colorado, South Dakota, and Hawaii, to $225 more for EVs in Washington. The purpose of this tax is not only to keep roads rolling but also to serve as an investment in future EV infrastructure. Washington uses $75 of its fee assessments to build out its charging network; Alabama uses $50 out of its $200 annual fee for expanding the charging network in the state.

These extra expenses are projected to grow over time. Several states have set registration fees to increase along with inflation-related metrics to offset the diminishing purchasing power of gas taxes.

Electric vehicle charging
guteksk7 / Shutterstock

Charging time opportunity costs

While super-fast EV battery charging is not too far down the road, it still takes an average of 15–30 minutes for EVs to charge at their quickest clip. That’s already much longer than a typical trip to the pump. EV owners charging via a Level 1 port (e.g., a typical household plug) might have to wait from six to 12 hours to get batteries up to desired power levels.

Drivers who plan to use EVs for long commutes might lose valuable hours waiting for cars to charge. At the least, owning an electric vehicle requires time to plan how and when cars are going to be in use. This mental and temporal space costs money and time that could be spent doing something more lucrative and/or productive. This consideration shouldn’t be ignored when considering a large investment in an electric vehicle.

SuperBase V EV charging in garage for vehicles and beyond.
Image used with permission by copyright holder

Home charging stations

One solution to long charging waits is to install a home battery charger. Level 2 chargers are 10% more efficient than Level 1 models, which tacks on about four times more miles per charging hour. Level 2 home chargers not only require less time to get a battery to a full charge, but they also decrease electricity bills with fewer power units consumed. While this is a great way to quickly juice up, high-speed chargers are not cheap. They range from $350 to $950 on Amazon. Subsequent home setup is also expensive, typically costing homeowners at least $1,000 for a certified installation.

Zendure being used to charge EV vehicle with batteries attached in garage.
Image used with permission by copyright holder

Expensive battery replacement

According to Auto Week, every EV purchased in this country features a battery warranty “that extends to at least eight years or 100,000 miles.” Driving 10,000 to 12,000 miles per year means that new EV owners won’t have to worry about battery degradation for eight to 10 years. When they do, though, electric car drivers are in for a big bill — between $5,000 and $10,000, according to Consumer Reports.

Electric batteries degrade and drop capacity over time (just like cell phone or laptop batteries). Today, EVs lose about 2% of their range per year. After a battery gets to between five and 10 years old, this becomes noticeable. While mechanics can service EV batteries, at some point, the entire battery pack will probably need to be replaced.

As the federal government continues to incentivize domestic EV production, the EV market should only grow. One solution is to wait out expensive gas prices and supply shortages. The hidden EV costs outlined above should not necessarily inhibit EV buyers, but should inform them before making such an expensive, long-term investment.

Editors' Recommendations

Nate Swanner
Former Digital Trends Contributor
Nate is General Manager for all not-Digital-Trends properties at DTMG, including The Manual, Digital Trends en Espanol…
The new electric Mercedes G-Class comes with four motors and a U.S. exclusive
The new G-Class will G-Roar at you
Mercedes-Benz G 580

The new all-electric Mercedes G class features four individually controlled electric motors, superior underbody protection, and a U.S.-exclusive trim. The luxury automaker has announced that the EDITION ONE special edition, which expands on the SUV's standard equipment and adds unique design elements, is only available in the States.

The vehicle’s four-motor setup provides a total of 579 horsepower and 859 lb-ft of torque -- along with more control over where that power goes. The ability to manage the output of each wheel is particularly useful on difficult terrain, off-road, and in situations that require precise maneuvering. The power for the motors comes from a116-kWh high-voltage lithium-ion battery, which is integrated into the vehicle’s ladder frame and drops its center of gravity as a result.

Read more
Why Alfa Romeo changed the name of its first EV
Alfa Romeo Milano

One of the more exciting aspects of the world of EVs is finding out what kind of entrant some of our favorite car manufacturers decide to throw into the fray. Although it doesn't get quite the same level of fanfare and accolades that the high-flying Lamborghinis and Ferraris get, Alfa Romeo has quietly gone about its business of being an elegant, performance-oriented Italian brand for decades. Alfa Romeo just debuted its first EV — the Milano — and then quickly changed the name. And it's all thanks to the Italian government.
Why the name was changed

So, what happened? The EV is being built at a factory in Poland and is the first Alfa Romeo model to be made entirely outside of Italy. Adolfo Urso, Italy's industry minister, said, "A car called Milano cannot be produced in Poland. This is forbidden by Italian law."  In 2003, Italy passed legislation prohibiting products that falsely claim to be Italian.

Read more
Maserati rounds off its 2025 Folgore lineup with an electric GranCabrio
Maserati's sports convertible goes all-electric
Maserati GranCabrio Folgore

Maserati has unveiled the final piece of its 2024 electrification puzzle in the form of the GranCabrio Folgore -- an all-electric version of its new convertible. The battery-powered roadster was unveiled as part of “Folgore Days,” a celebration of Maserati’s new electric lineup held in Italy’s motor valley. Folgore Days itself is following on from the Formula E racing weekend at Misano World Circuit -- with Maserati being the only luxury brand represented in the electric racing series.

The Trident has gone all out with its latest offering, producing what it claims is the fastest electric convertible on the market. It can do 0-60 in 2.8 seconds and is capable of hitting speeds of just over 180 miles per hour. As with many of Maserati’s sportier offerings, “Corsa Mode” is available and is the easiest way to get the most out of your electric Maserati. The vehicle produces just over 750 horsepower, though with boost, this can briefly reach around 820 horsepower. So the GranCabrio sits alongside its hard-top sibling as the most powerful vehicle Maserati currently offers.

Read more