The Cost of Owning an Electric Vehicle: A Comprehensive Comparison
Everything you need to know about purchase price, usage costs, residual value, insurance costs and more!
Electric vehicles (EVs) are becoming increasingly popular and available, with more and more manufacturers entering the market and offering a wide range of models at various price points. One of the main draws of EVs is the potential cost savings compared to gasoline vehicles. However, it's important to consider the full range of costs when comparing the ownership costs of EVs and gasoline vehicles. In this article, we'll take a closer look at the purchase price, maintenance and repair costs, fuel costs, and depreciation of EVs. We'll also explore the factors that can affect these costs and provide practical examples and research references.
When it comes to the purchase price of EVs, there are a few factors to consider. These include the make and model of the vehicle, the features it offers, and the size of the battery.
- Higher-priced, luxury EV models will naturally cost more than more basic models.
- EVs with larger battery sizes or higher driving ranges will also typically be more expensive than those with smaller batteries or shorter ranges.
- EVs with advanced features or technology, such as self-driving capabilities or over-the-air updates, will also cost more.
The potential impact of government incentives or credits on the purchase price of an EV should also be considered. In Germany, for example, there are EV tax credits or rebates available, even if they are set to decrease. Additionally, many cities and counties offer local or regional EV incentives or discounts.
When comparing the purchase prices of EVs and gasoline vehicles, it's important to take into account the cost of electricity versus gasoline in different markets or regions. Additionally, the availability and cost of the same models of EVs may vary in different parts of Europe. According to the European Alternative Fuels Observatory, the average purchase price of a new EV in Europe in 2020 was still superior, set at €36,000, compared to €28,000 for a new gasoline vehicle. However, this tends to slowly change as the production methods are becoming more and more efficient.
Maintenance and Repair Costs
One of the main cost savings of owning an EV comes from its lower maintenance and repair needs compared to gasoline vehicles. This is due to the fact that EVs have fewer mechanical parts and longer intervals between required maintenance.
However, there are still some factors to consider when it comes to maintenance and repair costs for EVs. These include the size and type of the EV battery (lithium-ion, nickel-metal hydride, etc.), and the length and terms of the EV's manufacturer warranty.
When comparing the maintenance and repair costs of EVs and gasoline vehicles over time, it's important to take into account the overall cost of maintenance and repair for each type of vehicle. A study by the University of Michigan's Transportation Research Institute found that, on average, maintenance and repair costs for EVs were about 27% lower than for gasoline vehicles over a 10-year period.
Another potential cost savings of owning an EV is lower fuel costs compared to gasoline. The cost of electricity is typically lower than gasoline in Germany, and there may also be reduced fuel costs through home charging or workplace charging.
However, there are also factors that can affect the fuel costs of an EV, such as electricity rates and charging habits. For example, the cost of electricity may vary in different markets or regions, and throughout the day. Using electricity produced by own solar panels can also massively reduce fuel costs for EVs.
When comparing the fuel costs of EVs and gasoline vehicles over time, it's important to take into account the overall cost of fuel for each type of vehicle. On average, an electric vehicle uses around 14 kWh per 100 kilometers, and with the average electricity price being around 0.28€ per kWh in Germany, this means you'll spend around €3.92 on electricity per 100 kilometers. On the other hand, a similar gasoline car would consume around 5 liters per 100 kilometers at an average cost of €1.5 per liter, which would amount to €7.5 per 100 kilometers. Over the course of 10,000 kilometers per year, this means you could save around €375 in fuel costs by choosing an electric car.
Another factor to consider is the options for free or discounted EV charging. Using EV charge points in shopping centers, restaurants, or other points of interest is often free of charge or heavily discounted. Also, many workplaces offer free charging or discounted charging through employer schemes. However, it's worth noting that free charging options are becoming less common as EV charging infrastructure expands.
Depreciation & Resale Value
When it comes to depreciation, there are a few factors to consider for EVs. These include the age and mileage of the vehicle, as well as the condition and remaining capacity of the EV battery. If you want to know more about it, you can read our article on how to precisely determine your EV resale value. And if you are considering selling your car, you can start by our comprehensive valuation tool at the bottom of the article!
However, in terms of comparing the depreciation of EVs versus gasoline vehicles, many think that EVs may experience accelerated depreciation due to the condition and remaining capacity of the battery. This has actually proven to be offset by the lower maintenance and repair costs of EVs.
Also, this comparison is not entirely accurate for another reason. The calculation made for this often lack to account for government incentives that lower the purchase price of EVs but do not affect the resale value. These incentives can be a few thousand euros depending on the locality. As such, when these incentives are taken into account, the residual value of EVs appears lower than it actually is and seems lower than the one of ICEs.
Additionally, the resale values of recent EVs are increasing and the ones of ICE are actually decreasing. According to a recent study conducted by iSeeCars, the Tesla Model S has been found to retain its value at a significantly higher rate compared to both gasoline and electric vehicles on average. Specifically, the study found that the Model S holds its value 2 times better than the average gasoline car, even when taking into account various incentives for electric vehicles. Moreover, a study by Kelley Blue Book found that the average resale value of EVs was about 50% over a five-year period, compared to about 38% for gasoline vehicles. It also shows that the resale value is more consistent over time and not as greatly affected by changes in gas prices.
Insurance costs are another important factor to consider when comparing the ownership costs of EVs and gasoline vehicles. The following are factors that can affect the insurance costs of an EV:
- The make and model of the EV
- The location and climate in which the EV is driven
- The driving record of the EV owner
A study by the Consumer Federation of America found that the average insurance costs for EVs were about 4% higher than for gasoline vehicles. However, the study also found that this difference may be offset by the lower maintenance and repair costs of EVs.
As the popularity and availability of EVs continue to grow, it's important for potential EV owners to consider the full range of costs when comparing the ownership costs of EVs and gasoline vehicles. While EVs may have a higher purchase price, they may also have lower maintenance and repair costs, fuel costs, and depreciation over time. Additionally, government incentives and credits, as well as options for free or discounted EV charging, can also impact the overall cost of owning an EV. Ultimately, it's important to do your own research and compare the costs specific to your driving habits and the EV models available in your area.If you already have an EV and you are considering selling it, you should try our solution here at Cardino. In just a few click, you can have a free valuation of your vehicle. Then, if you agree with the price, you'll just have to give us simple details and we'll take care of the rest, no hassle nor fees on your side! Start with our valuation tool down below:
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