How long does it REALLY take to save money on an electric car?

The US is in the middle of the electric car revolution. This week, Tesla announced a record increase in sales in the second quarter of the year – with global shipments of 446,140 cars in the three months leading up to June, beating its own forecast of 445,000.

Business in the US has been boosted by federal tax credits for electric vehicles, making them more accessible than ever for Americans.

Electric cars are much more expensive to buy, but usually cheaper to run – as maintenance and fuel costs can drop significantly with an eco car.

However, experts warn that it takes an average of six years to break even on a purchase – and it can take up to ten years to recoup the premium.

Customers also use social media to express their regrets about their EV purchase, with problems locating charging points and unexpected costs. So how long does it really take to save money on an electric car – and is it worth the price?

Looking beyond the point of purchase, electric vehicles are likely to be cheaper to run, as maintenance and fuel costs can drop significantly with an eco-car (Photo: Chevrolet Bolt)

Upfront costs

The place to start the math is with how much you spend on the car itself when you visit the dealership.

In terms of initial costs, electric vehicles are more expensive than gas-powered cars.

According to Edmunds, the average cost of a new gasoline car in May of this year was $47,892, while the typical electric car would cost $65,381.

For example, on the cheaper end of the scale, Volvo’s XC40 EV starts at $53,550, or $629 per month to lease, while the XC40 gas model starts at $36,350, or $499 per month.

Tax credits

If the vehicle qualifies for a state or federal tax credit, it can give it a significant head start on the breakeven point.

Motorists can get back up to $7,500 in credits when they purchase one of 10 new electric or plug-in hybrid cars.

Motorists can reclaim up to $7,500 in tax credits when they buy one of these ten electric vehicles

The Tesla Model 3 Performance qualifies for the full credit, but the Standard Range version qualifies for only half

Of the ten vehicles eligible for the credits, nearly all were produced by General Motors, Tesla and Ford. This includes the Chevrolet Bolt, Ford F-150 and Tesla Model Y.

Seven vehicles made by Tesla, Ford and Stellantis qualify for a $3,750 tax credit — half the credits — because they meet the requirement that a percentage of battery components be manufactured or assembled in North America.

Operation costs

This is where the calculations get a little more complicated, as running costs take into account several factors, including the efficiency of the car, the gas and electricity prices where you live, your driving habits, and how much you use the car.

Gas vs electric

When it comes to fuel, electricity is generally cheaper than gas. On July 7, the average cost of gas in the US was $3.53 per gallon.

According to the Natural Resources Defense Council, the cost of charging an electric car is equivalent to filling a gas tank at about $1 per gallon.

Gas prices are also typically more volatile than electricity prices, which are historically more stable.

A useful tool for comparing vehicles and estimating potential fuel cost savings is the United States Department of Energy calculator.

The calculator assumes a 55 percent stop-and-go driving mix and the U.S. average of 24,000 miles driven per year — but drivers can also adjust the formula with their own state’s gas prices and their typical mileage to get a more accurate picture. to get.

For example, if you compare the 2023 Volkswagen ID 4 EV — which costs about $38,995 — to the similarly sized 2023 Volkswagen Tiguan, which starts at about $26,950 — the electric car is $12,045 more expensive to start with.

The calculator estimates that the Volkswagen ID 4 EV will save $1,404 per year in fuel compared to the Volkswagen Tiguan

Comparing the Hyundai Kona Electric and the gas model, it would take the EV driver more than a decade to break even

The calculator estimates that the electric car owner saves $1,404 per year by charging his vehicle instead of filling it up.

By dividing the additional cost of the EV by the estimated annual fuel savings, it would take more than eight years for the purchase to break even.

But if you compare, say, the 2023 Chevrolet Bolt EUV to the Chevrolet Trailblazer, the customer can break even faster.

The Bolt costs about $29,700, while the Trailblazer starts at $22,100, so the electric car is $7,600 more expensive to start with.

In the calculator, it shows that Bolt owners will save $1,200 a year in fuel — so it would take them a little over six years to break even on the car.

However, the Bolt also qualifies for the $7,500 tax credit. If the customer could claim the full amount – buyers face income restrictions to qualify for the credits – this could mean the car is fully eligible for the gas model.

However, without the federal stimulus, it could take up to a decade for lower fuel costs to make up for the electric premium on some models.

The 2023 Hyundai Kona Electric costs $11,410 more than the gas-powered Kona. With an expected $1,101 in energy savings per year, but no tax relief, the EV driver expects to break even in just over ten years.

To upload

One of the biggest concerns around electric vehicles is whether or not the driver will have trouble finding charging points.

As the US expands its charging network, you may find it difficult to plan your trip with enough charging stops in more rural areas.

Some drivers have even taken to social media to describe the difficulties they experienced in finding charging points – or have given up on the car altogether as a result.

In a video titled “Why I got rid of my Tesla,” TikTok user Madison Hafen said, “Knowing that there’s a possibility I could run out of battery if I’m not careful was really stressful.”

Lauren Fix, analyst at the Autocoachsaid: “A lack of charging infrastructure is a major negative factor and consumers are becoming increasingly frustrated.

“Charging stations are limited, very few fast chargers are available and many of the accessible ones don’t work.

“Really hot and really cold temperatures also shorten battery life – especially if you’re using climate control – and can shorten battery life by a third.”

One way around this problem is to install a home charging station, but that can be an expensive choice.

According to Barronsthe popular JuiceBox 40 costs about $650 and the ChargePoint Home Flex costs about $750.

Installation costs range from about $1,000 to $6,000, depending on how close the charger is to your home’s electrical panel and whether you need a new panel and electrical upgrade.

Insurance

Premiums for electric cars typically run 5 percent to 15 percent more than for gas models, according to Bankrate, in part because of the newness and scarcity of parts if something goes wrong.

“You’ll especially see higher costs in areas where you’re not likely to easily find EV repair parts or specialists,” said Cate Deventer, insurance analyst at Bankrate.

Maintenance and service life

According to Robert Walden, founder of Vehicle Freak.

“If you trade in a traditional engine for an electric motor, you also say goodbye to a lot of costly maintenance,” he said.

‘Oil changes, timing belts, water pumps – it’s a long list, and none of it applies to EVs. Less maintenance also means more money in your pocket.’

The life expectancy of an electric car is also longer, he said, and battery technology continues to improve so that cars can last longer before the battery needs to be replaced.

“So while you may be paying more up front, you’re also investing in a longer-lasting vehicle,” he added.