Tax incentives kick in. The infrastructure will be in place. New cars – and new ones for electric car manufacturers – are coming to market. (Oh, and climate change continues at an alarming rate).
So maybe it’s time to invest in electricity.
And maybe it isn’t. After all, interest rates are still high, which means the cost of borrowing money — to pay off a car loan, say — is also high. And while an electric car is most likely better for the environment than a gas guzzler, there is an environmental cost to discarding a vehicle that still works. And public transport is still an optimal game too.
So here are the most important things to consider if you̵7;re thinking about buying an electric vehicle now, and an answer to the question of whether you should.
Before we start…
This is a complicated subject, but at Haven Life we believe in making life simple. Therefore, we will begin this article with what we believe to be the conclusion. But if you’d like to think the matter through for yourself, or be better equipped to evaluate your own personal circumstances regarding electric vehicle purchases (which vary from state to state and car to car), we suggest you read on.
The short answer to our headline question is that if you’re thinking about getting a new car (or replacing your current one), an electric vehicle should save you money over the course of three or more years compared to a gas-powered car, and it’s better for the planet ( although how much better depends on where you live).
However, the financial savings are not so huge that you should immediately get rid of your perfectly good internal combustion car and go electric just for the money — the purchase price is still significant. It’s also worth remembering that some analysts believe that electric cars will become cheaper in the next few years due to cheaper manufacturing costs and more options from Asia.
That’s no reason not to buy a car if you need one, but it might be a reason to wait if you don’t.
And here are those details…
Purchase price including tax deduction
There is now an electric vehicle tax credit (part of the Inflation Reduction Act) of up to $7,500 in place until 2032, making many (but not all) electric vehicles more affordable for most people (but not for some high-income earners).
If all the parentheses in the last sentence make it sound like the tax deduction is complicated, it is a little. Check this article to see if you and the vehicles you’re interested in would qualify for it, but there’s a good chance the answer is yes. (There are also additional state and local tax credits across the country.)
Even taking the tax credit into account, however, an electric vehicle will still cost you more than its gasoline-powered counterpart. A $12,000 price difference between equivalent models — one electric, one gas-powered — is not uncommon. The average price of electric cars is much higher than the average price of gas-powered cars, but that’s partly because there are more low-cost options for gas than electric cars, which drags down the average gas-powered price.
Bottom Line: Electric cars have a higher sticker price.
While the sticker price of an electric car is higher than that of a regular car, fuel costs are much lower. Putting a dollar amount on the savings is unhelpful because gas and electricity prices vary over time and from place to place, and different people drive (and thus fuel) at different rates.
However, a 2020 study concluded that EV drivers save 60% in fuel costs, and that was before the war in Ukraine (which drove up gas prices), so today’s savings are likely higher. In addition, charging at home at night can reduce charging costs by an additional 24%.
Bottom line: EV fuel is much cheaper.
Where to charge
The Inflation Reduction Act includes a 30% tax credit for electric vehicle charging stations for businesses and homes, and President Biden has a plan to build 500,000 charging stations across the US by 2030. Overall, the number of charging stations in the US is set. to grow significantly, and of course it is now cheaper to install one at home.
That said, if you’re thinking about buying an electric car, the important question is where you can charge your car now, not in 2030. If you mainly use your car close to home for commuting, consider whether your office or parking garage has a charging station.
Or if you have room for a home charger, it’s almost certainly the best way to save money and time. Charging your car at home overnight takes just as much effort as charging your phone, and maybe you should think about it the same way: what would your life be like if you couldn’t charge your phone at home or at work?
If you won’t be charging at home or at work, think carefully about how you’re going to handle it. The number of fast charging stations in the US is still low.
The bottom line: If you can’t charge at home or at work, an electric car might not be for you.
Simply put: electric cars are cheaper and easier to maintain (no valves, spark plugs, oil changes, hoses…). The Federal Office of Energy Efficiency and Renewable Energy says that the average maintenance costs for an electric car are 40% less than for internal combustion cars. This adds up to $600 in annual savings for the average American driver (who drives a little less than 15,000 miles per year) and, obviously, greater savings for those who drive more.
Bottom line: Less cash, less hassle.
So, all things considered, is it more expensive?
As you can see above, once you take everything into account, it is difficult to calculate the cost of an electric car compared to a regular car. Fortunately, someone has had a good crack at it, and the bottom line is, as mentioned above, that once you factor in the new tax credit and other savings, an electric car is likely to be cheaper than its gas-powered equivalent for most people over three years.
Of course, there are concerns other than money…
If you mostly use your car in town and have your charging calculated (see above), an electric car will easily go the distance you need in less than a single charge. But if you won’t be able to charge at home or at work, intend to travel long distances and/or drive in extreme cold, and/or carry heavy loads (both of which drain EV batteries relatively quickly), you should do some research ( where do you charge?) and some math (how often do you need to do that?).
The range of electric cars is constantly growing as batteries improve and charging stations increase in number, but for some drivers it is still something that requires consideration. For now, if miles of range are a concern, consider a Tesla: They have the largest network of superchargers and their long-range vehicles can go more than 300 miles between charges.
Bottom line: Don’t worry about EV range for city use; consider it if you do a lot of long trips or other activities that drain the battery.
How do they drive?
While different EVs handle differently, they generally drive smoothly and have quick pickups. Unlike a regular automatic, you can’t feel the gears shifting, because there aren’t any. If you’re used to knitting, it’s an adjustment, but you’ll probably find that it feels like you thought a machine would actually: genuinely seamless.
Bottom line: It’s nice.
An important reason for buying an electric car is that it pollutes less: But how much? The EPA says that, mile for mile, an electric car produces on average two-thirds less emissions than a gasoline-powered car. During the car’s life cycle, which includes manufacturing and delivery, an electric car’s total emissions are less than half that of an internal combustion car, and manufacturers have a financial interest in recycling the components of electric cars.
However, electricity is only as benign as its source, and that source varies from state to state. If you live in California, which uses a relatively large amount of renewable energy in its grid, your electric car will produce a quarter of the emissions it would generate in a state heavily dependent on coal (although even then it would pollute less than a gas-powered car).
While electric cars is better for the planet, remember what’s even better is not driving. Every time you take public transport, walk or cycle, you do more for the environment than you can by driving an electric vehicle. And you save money.