Total Costs of Electric Vehicles

BEV Costs

For the past few years, the small amount of electric vehicles available to consumers have proven to be costly. There are few options of cars to choose from and the majority of them are too expensive for the average consumer. With very few battery powered vehicles under $30,000, the goal of having a majority of cars on the road being electric seems far away and at the moment almost unreachable. However, the price tag on the car does not fully reflect how much it will cost you. The money saved from charging your vehicle rather than buying gas for it and the credit provided by the government for owning an electric vehicle makes the long term cost of owning an electric car financially viable. Breetz and Salon argue that, “even with these higher subsidies, many potential BEV adopters remain deterred by the ‘sticker shock’ of higher purchase prices,” (2018). They refer to battery electric vehicles as BEVs. Even with these savings, it is unclear on wether the higher price tags, expensive maintenance costs and depreciation outweighs the potential monetary benefits. The industry hopes to solve these higher costs through further development of technology and production of better vehicles. To examine this, we must compare the costs of similarly priced gas powered and electric vehicles over a period of time.

Comparing Car Prices

Since electric cars have been around for some years now, we are able to look at costs buyers incurred following their purchase of an electric vehicle. Breetz and Salon studied the total costs of a gas, hybrid, and an all electric car across multiple cities over a five year period. In their study, they found that, “the Leaf cost substantially more than the Corolla in all cities, even where there were generous BEV subsidies or especially large potential for fuel savings,” (2018). Through measuring net capital costs, annual taxes and fees, insurance, maintenance, and fuel costs while also looking at tax incentives, Breetz and Salon found that the Nissan Leaf was still more costly than the Toyota Prius and Toyota Prius in the majority of cities they looked at (2018). In other words, with all factors accounted for, electric vehicles are still a more costly option than their gas powered competitors. Hopefully, as car manufacturers continue to innovate and bring down costs of electric vehicles, they will become a financially smart decision to purchase and own in the long run. Even so, the positive impact electric cars have on the environment makes it so that if the cost is not an issue for the buyer, they are a great car to own.

Citation

Breetz, H. L., & Salon, D. (2018). Energy Policy [Abstract]. Do Electric Vehicles Need Subsidies? Ownership Costs for Conventional, Hybrid, and Electric Vehicles in 14 U.S. Cities, 120, 238–249. doi:https://doi.org/10.1016/j.enpol.2018.05.038