You’ve probably heard of the myriad benefits of EVs (electric vehicles), especially concerning the environment. Their popularity is growing steadily. People are ditching the conventional ICE (Internal Combustion Engine)-powered cars for their electric/hybrid alternatives.
Hidden Costs of Owning an Electric Car
However, buying an electric vehicle involves certain hidden costs that usually catch the customer off-guard. This guide will explain them all.
1. More Expensive to Buy
It is well-known that EVs have relatively higher purchase prices. For instance, an ICE-run Mini Cooper Hardtop in Southern California costs around $25,000. On the other hand, its electric or hybrid version will set you back more than $30,000.
In the long run, though, you will save money through lower monthly/quarterly maintenance costs.
Certain government incentives (such as tax credits) also make an electric car cheaper to buy. However, these aren’t yet available on all types of EVs. So, that’s another advantage lost.
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2. Higher Insurance Premiums
Different factors contribute to EVs incurring higher insurance premiums. The technology is much more advanced compared to cars that run on diesel and gas.
Even an average electric car has more sophisticated parts/features than many advanced ICE-powered vehicles. These include high-capacity batteries, inverters, etc.
Since replacing or repairing these components is costlier, the insurance premium is high.
Battery replacements are common for EVs due to their limited shelf life. These expensive lithium-ion batteries tend to stop working altogether when that period is up.
There are two ways around this. One, introducing alternative electric car battery technology. Or two, controlling the prices. Otherwise, insurance premiums on EVs will probably remain high.
Electric vehicles are also more powerful given the cutting-edge nature of their parts. That means better relative performance, which is another reason for the high insurance premium.
Currently, numerous electric car brands are actively working to bring down these expenses. Moreover, industry experts believe that the cost of accident repairs will decrease as EV take-up grows.
This may lead to a lower premium differential between EVs and ICE-powered cars in the future.
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3. The Cost of EV Charging Stations
An EV purchase inevitably brings the need for a home charging station with it. To that end, you can choose between a “portable” plugged-in station and a “hardwired” one.
You can get the latter installed in your garage while the former can be carried around. The cost depends on location, nature (portable vs. hardwired), and station type.
According to the digital marketplace HomeAdvisor, Level-1 charging stations are priced between $300 and $600. For Level-2 station, the range is from $500 to $2,200.
Level-3 charging stations will cost you anywhere between $20,000 and $50,000. They are designed primarily for commercial use.
Portable stations are usually more expensive than their hardwired counterparts. In addition, there’s the labor cost for installation.
It’s a hefty bill upfront. However, a home charging station will significantly decrease your running costs in the long term.
Charging station subscription plans are also available. Many of these packages include quick and complimentary/discounted installation by a certified professional.
Home charging points for EVs have a special adapter. It facilitates charging through the standard 120 volts powering residential areas.
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4. Expensive Public Charging Stations
Charging your EV at home is cheaper than doing so at a public charging point. For example, you have to pay around 30 cents/kWh at a typical Level-2 station in California.
For fast charging, the rate is 40 cents/kWh. That means you’ll have to spend $16 to fast-charge your EV having a 150-mile range.
Charging the same vehicle at a Californian home – where consumers pay 18 cents/kWh – costs $7. That’s less than half the price of public charging an electric vehicle in The Golden State.
5. Lower Resale Value
Electric cars were largely unknown just a few years ago. Also, when they first arrived, secondhand EVs retained surprisingly little of their original value.
A typical electric vehicle only had about 17% of its original value left. And this was after hardly 3 years of use.
The resale value of electric vehicles has improved significantly since those days. However, it’s still inferior compared to conventional gas-run cars.
At the moment, the average resale value of EVS is 40% of the purchase price. This is according to Bloomberg Quint. It includes both plug-in hybrids and electric vehicles.
That number is around 50% to 70% for conventional ICE-powered cars. Customers normally have reservations about the quality and performance of used EV batteries.
Furthermore, the secondhand market is affected by a growing consumer preference for electric SUVs/trucks. However, the options in this category are quite limited as of now.
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6. Battery Lease Schemes
A battery lease scheme helps decrease the purchase price of an electric vehicle. Through this arrangement, it costs relatively less to buy an electric car.
However, the manufacturer retains ownership of the battery. So, you can opt for such a program to buy a cheaper electric vehicle. Although, monthly rent will be due on your electric vehicle battery usage.
Its lease premium will depend on two things. These are the expected number of miles driven and the duration of your leasehold.
A typical lease scheme is likely to cost you around $70 to $135 a month. This is based on your EV model and usage.
Battery lease schemes certainly have their advantages. They let consumers own an electric car for significantly less. After all, lithium-ion EV batteries are quite expensive.
On the flip side, you have to continue paying for battery usage EVERY MONTH. This will go on for as long as the vehicle is in your ownership.
7. Manufacturer’s Right to Repair
Various laws and regulations require conventional carmakers to reveal detailed information about their products. These rules have gotten stringent over the past 2 decades.
The resulting environment has enabled after-sale markets, independent auto repair shops, and recyclers to thrive.
Things have changed somewhat with the advent and subsequent growth of EVs. “Intellectual property” is now a factor again within the automotive industry.
EVs are just “containers” of electronic equipment. This is similar to the Apple iPhone or Amazon Alexa. Consequently, electric car brands have the power to prevent owners from making repairs themselves.
Simply put, a manufacturer’s “right to repair” can stop you from making repairs. This applies if you want to fix something yourself or go to an independent auto shop.
In other words, electric vehicle owners/drivers can be held hostage by car companies. You’d be unable to get your vehicle fixed by an affordable independent repair services provider.
And you’ll probably have no choice but to go for expensive manufacturer-approved repairs.
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Frequently Asked Questions (FAQs)
Following are some common questions people ask about purchasing and maintaining an electric vehicle.
Is It Cheaper to Drive An EV In the United States?
The popularity of environmentally-friendly electric cars is growing steadily across the country. Although some models can be more expensive, they’re usually cheaper than their ICE-powered counterparts.
How Can You Calculate the Cost of Charging An EV?
Multiply the electricity rate with your car’s kWh/100 miles. The latter is the amount you pay per kWh of power used. This calculation should give you the cost per 100 miles.
How Much Power Is Needed to Charge the Battery of An EV Fully?
A typical EV battery needs 40 kWh of power to be fully charged.
Are the Prices of Electric Cars Going Up?
Yes, they have been increasing in the last 12 to 18 months. Of course, this is true of most industries in the aftermath of COVID-19. The rising prices of electric cars were practically unheard of in the pre-pandemic days.
What Type of Vehicles Are Powered by Electricity?
Electric cars can be broadly classified into 2 different categories. The first is “hybrid” or “twin-engine hybrid electric vehicles (HEVs).” The other is fully electric vehicles (EVs).
A hybrid or twin-engine hybrid electric vehicle runs mainly on an Internal Combustion Engine (ICE). There is, however, an accompanying electric motor.
How Much Needs to Be Spent On Electric Car Maintenance?
Maintaining an electric vehicle can cost you anywhere between $200 and $400 a year. In contrast, ICE-powered car owners have to fork out about $1,600 on annual maintenance.
What Are the Major Differences Between An Electric Car and a Conventional One?
Since it runs on a lithium-ion battery, an electric vehicle has significantly fewer moving parts. On the other hand, many components move in unison within an ICE-powered car. These include drive shafts, transmission, suspension, and many fluids and belts.
How Much Time Does An EV Need to Be Fully Charged?
This depends on the type of vehicle, battery size, and the speed of the charging station. On the one hand, an electric car can take as little as 30 minutes. On the other, it can also take up to 12 hours to be fully charged.
A normal EV with a 60 kWh battery takes a little less than 8 hours. This is at a typical 7KW charging station.
How to Figure Out the Mileage of An Electric Car?
As a general rule of thumb, you can get 3 to 4 miles per kWh. Here’s how to calculate the number of kWh you’ve used in any given month. Divide the total miles driven in that month by 3 or 4. You’ll have your answer.
Is It Safe to Plug An EV In for Charging During Rain?
There is no evidence to suggest that charging an EV during rain is unsafe.
Is It Cheaper to Charge An EV Using Solar Panels?
Using solar panels to refuel your electric car can be as much as 50% cheaper. This is because the electricity is generated by your home solar system. And it’s significantly cheaper than the power you receive from the electricity grid.
How Much Does It Cost to Replace the Battery of An Electric Car?
Replacing an electric car battery can cost anywhere between $1,000 and $6,000.
How Much Does It Cost to Recycle An Electric Car Battery?
A typical lithium-ion EV battery is recycled at around $1 per kilogram. There’s also the cost of more expensive minerals recovered through this process. It is only about 1/3rd of the cost of recovering lithium from old batteries.
How Are Lithium-Ion EV Batteries Recycled?
These batteries are dried and crushed first. After that, valuable materials are obtained through sieving. These might be useful in producing new batteries later on.
What Happens to An EV Battery at the End of Its Lifecycle?
Most EV batteries can still be used once their estimated “shelf life” is up. However, their charging capacity would most likely have taken a hit by then.
This is why putting them into another vehicle is not recommended. Instead, consider utilizing such batteries to store energy for other purposes.
What Are the Major Environmental Benefits of An EV?
Driving an electric car reduces greenhouse gas emissions. It also removes various kinds of particulate matter and other pollutants from the environment.
How Much Does It Cost to Own an EV in Michigan?
Non-hybrid EVs weighing less than 8,000 pounds cost around $135 a year in taxes. The tax is $235 on cars weighing over 8,000 pounds in The Great Lake State.
Parting Thought
The rise of EVs is one of the most significant changes within the automotive world.
A transformation of this magnitude hasn’t been witnessed since the era of Henry Ford. And that was in the early 20th century!
The popularity of electric cars is increasing with each passing day. This is despite the various hidden costs that are rarely considered.
In fact, many manufacturers are planning to switch to EVs completely. They intend to shut down the production of conventional ICE-powered vehicles altogether.
For instance, Jaguar plans to go fully electric by 2025. Volvo intends to do the same by 2030. Similarly, Lotus is committed to going completely hybrid/electric by 2028.
Aside from being easy on the environment, electric cars make owning an automobile easier. They’ve been a game-changer for the average American household.
So, the hidden costs tend to be worth it for most consumers. If you plan to buy an EV we suggest you consider these pros and cons. Good luck!
My name is Matthew, staying in Seattle, Washington. Electric Vehicles (Electric Cars & Electric bikes) caught my attention for the last few years and my love for electric cars and bikes is everlasting. I spend many of my weekends traveling to various places all over various cities with my electric vehicle (e-bike and electric car). Here I am sharing my expertise, experience, and invaluable information about electric cars and electric bikes. Check out more.