Over the past year, drivers have had to check their phones (or drive around to their local gas stations) on a daily basis to figure out if gas prices are going up or down. While gas prices have come down since hitting insane numbers this summer, filling up your car at the pump can still lead to sticker shock these days, as the national average for gas is hovering around $3.66. It’s better than the average of $5 we saw earlier this summer, but it’s not great. It’s not just gas; finding parts for cars or even a car to purchase at a reasonable price can be difficult, making auto ownership an increasingly expensive and difficult task.
With automakers shifting their focus to electric vehicles, and thanks to the high costs of gas and overall ownership for gas-powered cars, some shoppers may be looking to switch to an electric vehicle to save some money. On the face of things, EVs appear to be more affordable to own over the long run than gas-powered cars because of the cost of electricity and minimal maintenance. If you’re thinking about switching over to an EV, here’s what you should know about the cost of car ownership.
EVs are mega expensive
Pricing continues to be a large problem with EVs. Forget about pricey niche vehicles like the GMC Hummer EV or Rimac Nevera; all-electric versions of regular cars are far pricier than one would expect. Take the Hyundai Kona as a prime example. The gas-powered car costs $23,285 with the mandatory destination fee, while the Kona Electric starts at $35,245. Besides the electric powertrain, the two models are similarly equipped. It’s a similar situation with the Ford F-150 and F-150 Lightning; when you compare similar configurations, the gas model costs $43,185 and the EV starts at $53,769.
Looking at the whole picture, Kelley Blue Book reports that the average price paid for a new vehicle was $48,281 in October 2022, while the average price for a new EV was $64,249. Either way, you’re going to be paying a lot more money for a comparable electric car.
Beyond pricing, some EVs can be hard to purchase, as availability is limited to a few states. Going back to the Kona Electric, the electric SUV is only available in 11 states. If you don’t live in one of those, you’re out of luck or will have to go out of state to purchase a model.
There’s a large difference in maintenance costs
One of the big draws of making the switch to an EV is the reduced maintenance costs. Without a gas engine and with fewer moving parts, EVs are cheaper to maintain. To get an idea of how much you’ll be spending on maintenance costs, you can use AAA’s Driving Cost Estimator that allows you to plug in your state, vehicle, and annual miles driven.
For a brief comparison, we’ll be sticking with our Kona and Kona Electric. We’ll use California, 15,000 annual miles, and 55% city miles. The AAA’s estimator churns out a figure of $754 for annual maintenance/repair for the Kona Electric. The gas-powered Kona is estimated to cost $1,427 to maintain/repair for a single year. Over the course of five years, the Kona Electric will require $3,771 to maintain/repair, while the regular Kona has an estimated figure of $7,138.
The AAA’s estimator churns out a figure of $0.70 per mile for the gas-powered Kona with a price of $5.75 (the average in California) for regular gas. The Kona Electric is estimated to have a per mile cost of $0.72 with a cost of $0.272 for electricity. It’s important to note that the per-mile figures also include fuel, maintenance/repair, depreciation, insurance, fees and taxes, and finance charges in the state of California.
Charging vs. gas
Electricity costs to charge an electric vehicle are difficult to determine. There are so many variables to consider – where you live, what type of car you have, what type of charger you’re using, and what kind of onboard charger you have on your EV – that giving a broad price for EV charging is useless. Still, we’ll try our best. Just keep in mind that your situation will certainly be different.
According to the U.S. Energy Information Administration, the average rate of charging at home cost $0.15 per kWh in the U.S. earlier this year in July. Putting all of the numbers – 15,000 miles per year, 120 MPGe combined, and $0.15 per kWh — you get $632 to charge the Kona Electric for an entire year. Using data from the EPA’s website with our figures for the gas-powered Kona — $3.66 per gallon, 15,000 miles per year, and 32 mpg combined — you’re looking at spending $1,700 to fill up the Kona in a year.
Overall, it looks like an EV would be far more affordable to fuel than a gas-powered car, depending on where you live and what kind of charger you use.
Things that are out of your control
The new Inflation Reduction Act (IRA) drastically changes what vehicles are eligible for the federal tax credit. EVs must have a final assembly point in North America, are required to have a certain percentage of critical minerals that are extracted or processed in the U.S. or free trade partners, and a minimum percentage of battery components that are assembled or manufactured in North America, and they must meet the strict budget caps based on body style. Things weren’t as difficult before, but you’re going to have to do some homework to see what EVs are eligible for the tax credit.
Quite a few electric automakers, like Rivian and Tesla, offer direct-to-consumer sales. While this makes the process of purchasing an EV easier, it means that you’re at the mercy of the automaker when it comes to prices. We’ve seen massive swings in pricing over 2022 for both Tesla’s and Rivian’s EVs.
Is one better than the other?
No, not really. At the moment, the majority of EVs cost too much compared to similarly equipped gas-powered models to be worth the extra cost savings for fuel and maintenance. Additionally, the fact that not all EVs on sale are eligible for the $7,500 federal tax credit makes things even more disappointing and difficult to comprehend. You also have to consider the high costs of getting a charger installed at your home or how frustrating finding a charger can be. We feel compelled to say that direct comparisons between EVs and gas-powered cars aren’t as straightforward as they would seem because of how many factors are involved in the comparison.
For the time being, we strongly believe that for the majority of consumers, a gas-powered vehicle is still the better option. If gas prices hit $6 again and routinely stay up there, we may reconsider our decision, but purchase prices for EVs will also have to come down.
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