One of the most significant driving factors when choosing between a car that runs on gas or electricity is cost. Cost has a multitude of variables ranging in scope from fuel charges to maintenance fees, to the overall price of the vehicle itself. One of the biggest arguments made against electric cars is that they are too expensive upfront and this is simply not true today as more than forty different models have come to market.
The dramatic rise in electric cars over the past decade proves just how cost-effective electric vehicles are. Not only can you have a home charging station for your EV that’s convenient and efficient, but you also will pay significantly less in “fuel” prices compared to traditional gas cars.
This is just one of the many benefits of driving an electric vehicle. Going beyond the environmental benefits of reducing transportation emissions through EVs, electric cars cost a fraction of what gas vehicles do.
To understand how and why the cost of an electric vehicle is so much different than that of a gas-powered car, we will examine the total cost of ownership as it pertains to things like fuel, maintenance, and supplementary cost.
Electric cars vs. gas cars costs: The sale price
When looking into buying a new car, budget does the bulk of the work to determine our options. Whether you are looking at a new or used vehicle, or gas versus electric, sale price is usually dependent on your location, the brand of the car and the type of vehicle.
For this comparison, we will use the example of a four-door sedan. According to Kelly Blue Book, the average cost of a gasoline-powered four-door sedan is $35,000.
Assuming you pay cash and do not finance the vehicle, this sticker price will come with some pretty hefty taxes attached to it.
Alternately, the average cost of an electric vehicle is $55,000, though this average is skewed by the recent popularity of high-end electric vehicles like the Tesla Model S and Model X. Several electric vehicles beat the national average transaction price of gas cars.
For example, the Kia Soul, Nissan Leaf, and Chevy Bolt are all priced below $35,000, which beats the initial transaction cost of the average gas-powered vehicle.
Electric cars have a significant advantage in regards to cost due to impressive federal and state EV incentives. We strongly recommend looking into your state’s electric car tax credits as the tax incentives can drastically lower the cost of electric cars.
If electric vehicles are cheaper, then why have I been told they are more expensive? There is still a great deal of lingering misunderstanding when it comes to the initial cost and total cost of purchasing and owning an electric vehicle today, even though the market has been evolving at a rapid clip and introducing more affordable electric cars year over year.
One of the reasons for the misconceptions about electric vehicle pricing has to do with the types of electric vehicles first available. In 2008, Tesla introduced the Roadster, a sports car, as its first go-to-market electric car, and thus the automotive brand is associated with luxury.
Since then, Tesla has ramped volume production, introduced more models, including the Model 3, and established global supply chains to continue to bring down costs.
Furthermore, when it comes to both gas-powered cars and battery-electric cars, we tend to classify the vehicles by make, model, and brand. However, electric vehicles also have additional classifications, which also influence the perceptions around electric cars.
Specifically, there are three different types of electric vehicles, all of which range in pricing options, brand, and style. It’s important to understand the type of electric vehicle as this relates to the lifetime ownership costs, given different fueling and maintenance costs across the three categories.