How Expensive is an Electric Vehicle?

August 26, 2019
Electric Car

Upfront costs present a significant barrier to widespread Electric Vehicle (EV) adoption. EVs cost more than a comparably sized gas-powered car, although the cost of EVs has declined and is expected to continue to drop even as the vehicles improve in quality and cheaper maintenance and fuel costs will make owning an EV less expensive over the lifetime of the car. [1]

Battery costs are the primary driver of higher upfront EV costs, as batteries that hold enough charge for long-range driving are expensive. However, battery technology has been rapidly improving, and as this trend continues, the cost of batteries, and therefore EVs, will continue to decline. Once battery capacity increases and costs decline, automakers will be able to produce a variety of EV body shapes, including SUVs and pick-up trucks, at comparable cost to gas cars. [2]

Though the upfront price tag of an EV may be higher than that of a gas-powered car, the maintenance and fuel costs associated with an EV are just 10 percent of the cost of driving and owning a gas car. Taking into consideration volatile gas prices and high maintenance costs for services such as oil changes, which EVs do not require, the life cycle costs of owning an EV are actually lower than owning a gas-powered car. [3]

Maintenance costs are much lower for EVs in part because they are mechanically much simpler than their gas-powered counterparts, with 20 moving parts compared to more than 2,000.

Furthermore, electric motors operate using electromagnetic force instead of friction. Fewer moving parts and less friction translates into less wear and tear on the engine, and fewer maintenance requirements. Costs for parts and manufacturing are also predicted to continue to decrease significantly, [4] which will further reduce price tags for drivers.

Fueling an EV with electricity is significantly cheaper than paying to fuel a car with gas. [5] More than half of U.S. homes have the ability to charge EVs, and EV drivers generally prefer to charge their vehicles at home, meaning that charging costs reflect their typical home electricity costs.

If paying for use of a public charging station or one located in an apartment building garage, drivers might pay 20 cents per kWh. Depending on the efficiency of the car, this is equivalent to paying about six to ten cents per mile, or about one third of the cost of gasoline. [6]

The average cost of electricity in the U.S. is 12 cents per kWh, meaning charging at home is even cheaper. An EV owner might therefore spend $20 or less on fuel each month, depending on how often the car is driven and where it is charged.

See Incentivizing Electric Vehicle Adoption for a discussion of federal and state policies in place to help alleviate the upfront cost barrier to EV adoption.

–––––

[1] Keiichi Kitahara and Davin Beltran, Director of OEM Development and Regulatory Compliance & Senior Manager of Regulatory Compliance at Nissan, Interview, November 14, 2018.

[2] Keiichi Kitahara and Davin Beltran, Director of OEM Development and Regulatory Compliance & Senior Manager of Regulatory Compliance at Nissan, Interview, November 14, 2018.

[3] Angela Konert, Vice President of Government and External Affairs California at BMW North America, Interview, November 20, 2018.

[4] Daniel Sperling, Three Revolutions: Steering Automated, Shared, and Electric Vehicles to a Better Future, Washington, D.C.: Island Press, 2018.

[5] Robert Thomas, Rate Expert in Regulatory Affairs at Southern California Edison, December 7, 2018.

[6] Paul Jennings, Principal at PCS Energy, Interview, November 7, 2018.


This blog is part of a seven-part series on electric vehicles: