As gas prices remain a hot topic, many people are taking a closer look at electric vehicles (EVs). Improvements in technology, and the fact that EVs are now available in every class of vehicle, make them increasingly attractive to the average consumer. But you might still be wondering whether an EV is worth the investment.
Some EVs can cost more to purchase than a similar gas-powered car, and certain maintenance expenses (such as battery replacement, if needed) are also higher. Owners may also need to install a charging station at home, which adds to the upfront cost.
Depending on where you live, you could be eligible for substantial tax credits and other incentives to purchase an EV. Plus, reduced expenses for fuel, maintenance, and insurance could make the total cost of ownership lower than for a similar gas-powered car.
You might also be able to get a loan to cover the cost of a home charging station, or to pay for EV maintenance down the road.
All things considered, an EV could make good financial sense over time, especially when gas prices are high. And if you’re looking for a way to reduce your personal carbon footprint, an EV might be ideal, with a payoff that’s both financial and environmental.
Interested in exploring whether an EV could make sense for you? Here are some things to think about
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Your budget matters
Electric vehicles receive plenty of attention these days, and for good reason. Gas prices are likely to remain high for the foreseeable future. No wonder EVs are expected to make up 52% of new-vehicle sales in the U.S. by 2030, according to a KPMG survey.¹
Sticker shock at the pump is painful for drivers of gas-powered vehicles who are filling up once a week or more, and even lower-mileage drivers feel the pinch. But purchasing a new EV could set you back more than if you buy a comparable gas-powered car, and for lower-priced models, the spread can be significant.
For example, you’ll spend $8,000 more to buy an electric Chevrolet Bolt than you will for a gas-powered Hyundai Elantra GT.2 In the luxury segment, the price differential is smaller: You’ll pay less for a Tesla Model 3 than a BMW 330i, and only about $2,000 more than you would for an Audi A4.¹
But if you drive 250 miles per week or more, you’re likely to benefit quickly from lower operating costs for both fuel and common maintenance items.
Today’s EVs earn strong ratings for reliability, and because an EV is less mechanically complex than a gas-powered car, it will typically require less standard maintenance. In fact, over a 200,000-mile vehicle lifetime, an EV owner will spend roughly half as much on regular maintenance as they would for a gas-powered car, or an average of $6,276 vs. $12,285, according to Consumer Reports reliability surveys from 2019 and 2020.2
That’s a win, even if gas prices correct to pre-2022 levels.
Benefits of EVs
With more and more electric cars on the road these days, drivers shopping for a new car can easily find reliable information about EV pros and cons to help them make the right decision. And you can now choose an EV from almost every class of vehicle, whether you’re looking for a subcompact, an SUV, a luxury sedan, or even a truck.
For many, the most compelling pro is how much they won’t spend at the pump, especially if they can charge their vehicle at home. Comparing an EV with a gas-powered vehicle in the same class, EV savings range from $.14 per mile (Ford F150 Lightning vs. Ford F150) to $.10 per mile (Tesla Model 3 vs. Honda Civic) as of March 2022.3
Looking at national average costs for gas and electricity, it’s anywhere from 3-5 times cheaper per mile to drive an EV than a gas-powered car. And if you live in Arizona, Florida, Nevada, North Carolina, Tennessee, or Virginia, some EVs can be 5-6 times cheaper per mile.2
This kind of reduction in your monthly spending could go a long way toward reducing your expenses and helping you reach financial goals, so it’s definitely worth considering.
Electric vehicles and an eco-friendly lifestyle
The reduced environmental impact of driving an EV instead of a gas-powered car is widely accepted. According to the EPA, an EV’s carbon footprint is typically smaller over its lifetime than that of a gas-powered car, even when accounting for electricity used for charging and battery manufacturing.
As more people and businesses become interested in pursuing renewable energy sources like wind and solar, they will make up an increasing share of the electric power generation grid, adding yet another layer of assurance to green-minded EV drivers looking to charge up.
And while it can still be a challenge to recycle an EV battery at the end of its life (after about 200,000 miles2), research on how to reclaim more EV battery materials and boost the recycling rate is underway.
For these reasons, especially for people who drive every day, choosing an EV could be an important step toward building a more eco-friendly lifestyle.
Drawbacks of EVs
Despite the benefits of cost-savings and greening your life, there are a few potential downsides to owning an EV.
Perhaps the biggest concern, at least in terms of popular perception, is worry over the vehicle’s range. But rapid advances in battery technology mean that most EVs can be driven 200 miles on a fully charged battery, according to the EPA. And automakers plan to release even more long-range models in the years ahead.
Of course, driving habits and weather conditions will play into the effective range for any given driver on any particular day. For example, if you need to run the heat or A/C, you’ll have to recharge sooner.
Another concern people often have about EVs is that they’ll have to hunt far and wide for a charging station. While that may have been the case a decade ago, the charging infrastructure continues to expand to meet demand, and many people can meet their driving needs by plugging in only at home.
Plus, there are now more than 45,000 public charging stations across the U.S., on highways, in public garages, and at various retail locations.4 Workplace charging is also becoming more widely available; you can use an app to locate a charging station, and several automakers are building charging location information into their vehicles’ dashboard information systems.
Charging an EV at home
Your home charging options will vary with where you live: If you live in a multifamily development built in the past few years, it’s possible that you already have access to vehicle charging stations on-site. And in some parts of the country, local code requirements for new-home construction include specifications to accommodate EV charging.
EV owners who live in an older home or building might be able to charge an EV using a standard 110v residential power outlet. Although it can take up to 12 hours to reach a full charge, this option serves the needs of many people.
If such an extended charging session isn’t feasible, and you don’t want to leave home without a full charge, you could install a Level 2 (240v) charging station, which uses dedicated circuitry to fully charge a vehicle in just a few hours. For a single-car station, equipment and installation cost about $1,800, depending on the station’s proximity to the home’s main electrical service box.5
Deciding if you should buy an electric vehicle
Many car manufacturers have already demonstrated their commitment to developing an affordable EV, and they’ll be joined by others in the near future. So whether you’re motivated by the prospect of saving money on your transportation costs, or just taking a step to green up your lifestyle, an EV is worth a closer look.
And if you’re looking for other ways to green your life and home but are worried about the costs, don’t fret. A green loan could help you make energy- and cost-saving improvements in a way that fits your budget now and in the future.Learn More