Actually, the overall cost is likely lower than with a gas-powered car

BY TIM BENFORD: PRESIDENT OF DRIVE ELECTRIC DAYTON, PAST VICE-PRESIDENT OF ELECTRIC AUTO ASSOCIATION 

If, in previous Monthly Myth articles, we’ve convinced you that electric vehicles (EVs) have enough range, can be conveniently charged, and don’t cause you to swap the tailpipe for a smokestack, perhaps the only myth still holding you back from making the switch to an EV is “EVs are too costly to buy, maintain and repair.” Let’s review the facts.

Despite the COVID-19 pandemic, there seems to be an EV renaissance unfolding. For example, Tesla recently reported its best quarter ever with a 40% increase in sales over the third quarter of 2019. Auto sales in legacy automotive companies have been sliding and EVs have been enjoying strong sales worldwide. This is despite somewhat higher EV vs. gasoline vehicle purchase prices. As explained in a recent Car and Driver article, a gasoline Hyundai Kona purchase price is $21,440 vs. a Hyundai Kona Electric price of $38,330. Consumer Reports says EVs can cost anywhere from 10% to over 40% more than similar gas-powered models.

Total Cost of Ownership

However, purchase price is only one factor to consider in a new vehicle. To understand the real benefit of switching to an EV, it’s important to consider all costs incurred during the vehicle's lifecycle. This is known as the Total Cost of Ownership (TCO). 

Vehicle Purchase Price

A vehicle is usually the second most expensive item that a person buys after a home. EVs are more expensive to purchase up front but most are still eligible for federal tax credits of up to $7,500. 

Note that the size of your vehicle’s battery, as well as the size of your tax bill, determine the tax credit for which you qualify. For example, if you owe $3,000 in federal income tax, you can claim a $3,000 credit even if your vehicle is eligible for the full $7,500. Visit the Department of Energy website for a full list of federal and state incentives.

Fuel Costs

Depending on the size of your EV and where you charge it, you may realize substantial savings over owning an gasoline-powered vehicle. Consumer Reports found that over a typical seven-year ownership span the average fuel savings for an EV over a gasoline vehicle is $4,700 for a sedan, $6,300 for an SUV, and $8,800 for a pickup. Although electricity and gasoline costs vary nationwide, EV owners who charge their vehicles at home at lower electricity rates will see significant savings no matter where they live. The U.S. Department of Energy has a handy Fuel Costs and Savings calculator on its website.

Maintenance and Repair Costs

An EV and gasoline vehicle usually look the same except for the exhaust pipe on the latter. But internally, EVs have fewer parts than ICE vehicles. What makes an EV less expensive to repair and maintain is that they do not include a gas tank, starter motor, carburetor, fuel pump, water pump, generator, alternator, reciprocating engine, drive belts, hoses, or exhaust system. They don’t require oil sumps nor oil that needs changing every 5,000 to 7,500 miles, and EV brakes last longer because the electric motor helps bring the car to a stop. 

Additionally, gasoline vehicles are mechanically more complex, have thousands of more parts, and generate both heat and polluting gases that lead to deterioration of the component parts. 

Typical EV maintenance includes cabin air filters, brake pads, tires, and suspension components. An EV has a cooling system that uses antifreeze, similar to a gasoline engine’s radiator, but because there is no danger of contamination by engine oil or combustion byproducts it doesn’t break down and seldom needs to be changed.

Consumer Reports indicates that the cost to maintain and repair an EV over a 200,000 mile lifetime is roughly half as much as maintenance and repairs on a gasoline vehicle with an average savings of around $4,600. Forbes concurred with a recent article reporting  that EVs cost far less to maintain. 

Depreciation

When it comes to computing the true cost of ownership of a vehicle, depreciation is a big piece of the pie. As EV range grows with improvement in battery technology, and battery costs come down, EV resale value improves.

There are at least 11 new 2020 EV models with a range of 200 miles or more that are holding their value according to Consumer Reports. To be fair, in another report, all EVs except Teslas have a depreciation problem.

After adjustments for federal and state tax credits, Consumer Reports found that luxury EVs retained 48% of their value after five years, while comparable vehicles with a gasoline engine retained only 46% of their value.

Conclusion

You will most likely save money by driving electric. Of course, you will have the important added benefit of knowing that you are helping the planet by reducing your carbon footprint.  Next month, we’ll see if we can bust the myth that an EV’s battery will need to be replaced after five to 10 years.