Surprise! Electric Cars Can Be Good for Your Wallet, Too
Tagged in:
Tap to Read Full Story

You may be seeing more Teslas, Chevy Bolts and other electric vehicles (EVs) on the road soon. American purchased 40,729 plug-in cars in the first quarter of 2017—a nearly 50 percent boost from the same period a year ago. By 2018, plug-in sales could top 240,000 annually.

And there are now financial reasons to consider getting one, too. In addition to being more energy efficient, maintaining EVs tends to be easier on drivers’ wallets than with most traditional cars, and the price tags are getting lower.

How much easier on the wallet?

A NerdWallet analysis found electric-vehicle drivers can save more than $10,000 on car ownership costs over five years compared to those driving gas-powered vehicles. One reason: EVs have fewer moving parts than cars with internal combustion engines, which simplifies maintenance. For example, they don’t use oil for lubrication—meaning you can skip regular, $20-$55 oil changes.

EVs also don’t have spark plugs that need adjusting or replacing or an exhaust system to maintain. And, since most use regenerative braking to help recharge their batteries, they go through brake pads more slowly, saving on replacement costs (anywhere from $300 to $1,000 for a full job).

Even though gas prices are at a reasonable $2.36 now, a car that gets 25 miles per gallon will cost you more than $1,400 to fill up in a year (assuming you drive 15,000 miles). A family-sized EV might cost less than half that.

One drawback is that EVs generally have higher price tags. Ford’s Focus hatchback costs less than $20,000, for example, while the electric version starts at $30,000. But you can largely offset that with the federal tax credit, which allows up to $7,500 for all-electric and plug-in hybrids purchased in or after 2010. And prices have been coming down.

So why isn’t everyone going electric?

Despite making some splashy inroads in the auto market—Tesla recently surpassed Ford, then GM, in market value—there’s still a lot of ground to cover. Of the 17.55 million cars and trucks sold in the U.S. last year, less than 1 percent were electric or plug-in hybrids.

“There aren’t enough products on the market,” says Zak Edson of Lucid Motors, an EV startup launching a new sedan, “Air,” in 2019. While there are a handful of companies making niche vehicles—like electrified Corvettes that can reach 209 mph—practical offerings have been lagging.

That’s changing though: Tesla’s compact Model 3 debuts this year for $35,000, and another startup called Nio is introducing a family-sized EV in 2010. Established manufacturers, like Volvo and Audi, are also working on brand-new concepts.

Are there downsides to EVs?

Range anxiety (the fear you’ll run out of juice), charge time and cost are currently the biggest obstacles, says Hendrik Muth, VP of product marketing and strategy at Volkswagen of America.

But these factors are improving as the industry matures. Muth points to the e-Golf, Volkswagen’s electric hatchback, which starts under $30,000 and has seen range improvement from 83 miles in 2015 to 125 miles today. Ford’s EV Focus saw similar gains: In 2016, it had a 76-mile range on a full charge; the latest model stretches to 115. (The average U.S. driver covers about 29 miles a day.)

Jeff Schuster, senior vice president at LMC Automotive, an automotive production and forecasting company, expects that momentum to keep building. “We’re seeing a convergence of buzz and choice,” he says. “Things are changing quickly: Range is increasing, charging times are coming down and charging infrastructure is expanding. Plus, economies of scale are bringing prices down.”

Related