Are Electric Cars Worth It?

More and more people are asking the question – Are EVs worth it? It’s a lot to consider as it’s a completely new way of driving for many. In this article, we’ll examine what it’s like to own an EV and the costs involved.

Electric Vehicles are a smart choice so long as you are a homeowner with access to a regular charger outlet and your daily comute is short.

I recently bought a new car. I bought a hybrid. I did consider an electric, but I live quite rurally and am worried about the range. But there are a lot of positives to owning an EV. Let’s look at them now.

Value of an EV

The average spending on a new car in the US is $38,000-41,000, and $23,000 for a used car. Electric Vehicles can be disproportionately more expensive than gas cars. The average cost of a new EV is $56,000 (KBB). That’s $10-15,000 more. The question is, is an EV up to $15,000 more than a car? There are certain facts that need to be considered to understand the full comparison, notwithstanding the savings in fuel costs.

Most EVs are considered entry-level luxury cars, mainly due to the cost. But that doesn’t necessarily mean you are purchasing a lot of luxury. If we look at the top two slots are Tesla, followed by the Ford Mach e and the Chevy Bolt.

Model Cost US Sales

Tesla Y $58000 172700

Tesla 3 $55000 128600

Ford Mach E $44000 27140

Chevy Bolt $42000 24803

Tesla has been making EVs since 2012, for ten years. The cost of a Tesla Model Y or a Model 3 is comparable to the national average of a gasoline car, but the overall finish is sometimes lacking. Doors not completely flush or trims not fully finished.

The Ford is available in several configurations but has a higher entry price point and a lower range distance.

The Chevy Bolt is a much smaller car for the same amount of money and, unfortunately, a serious recall issue in late 2021 due to a fire hazard.

When we are looking at a cost, we also have to look at depreciation. All cars have depreciation as soon as you leave the dealership, but EV’s fair a bit better in depreciation – depending on the brand.

Brand New 3 Year Old 5 Year Old Depreciation after 3 Years

Tesla Y $58000 $37000 $30000 51%

Tesla 3 $55000 $41000 $30000 25%

Chevy Bolt $42000 $24000 $21000 41%

Nissan Leaf $33000 $16800 $10200 49%

Hyundai KONA $44000 $27000 $23000 37%

Chevy Malibu $28000 $16500 $14000 41%

Audi A6 $53000 $31000 $22750 40%

Most EV depreciation is comparable with a gas-powered car, but a Tesla holds its value better than most. During periods of tight supply, even a used Tesla model may be worth more than a new one.

EV Insurance

Insurance on an EV is not cheap. Insurance is always dependent on age, location, and driver history, but also the car you are choosing to drive. An EV is often seen as a luxury vehicle category regarding insurance. This is because they’re not as easily fixed as a regular sedan. They have expensive parts, and require specialized tools and trained skilled workers to repair.

If we look at a Tesla, for example, the body is aluminum and much more expensive to repair after a collision. Tesla offers their own insurance and boasts costs of 20-30 % cheaper than other companies. However, this is only available in California and Texas.

Going with a local insurance company, Tesla Model 3 will cost an average of $1900 for a 40-year-old with good driving history. This increases to $2100 for a 30-year-old.

If we look at a Hyundai Kona, the insurance averages $1400 for a 40-year-old good driver.

This is compared to a Toyota Camry at $1400. They are generally comparable for the small to mid-size, but if you step into the upper end of luxury EVs such as Tesla or Audi, you’re adding at least $200 – $300 to your insurance.

EV Reliability

It stands to reason that EVs are more reliable than gas cars as they have fewer moving parts that can cause problems. However, although this is true, they are considered new technology and lack the experience of 100+ years of ICE. And so just because they have fewer things to go wrong, you may find that repairing your EV might not be as easy or inexpensive as you imagine due to a lack of knowledge.

EVs will account for approximately 1.5% of new car sales in the US in 2021. However, that number is growing year on year. Tesla does have the lion’s share, without a doubt. They sold more than 300,000 units in 2021, compared to the next EV brand, Ford, with sales of 27,000.

Tesla is not known for its perfect finish. Trim may be rattling, doors don’t quite close, or stitching may not be perfect, but when asked about reliability, Tesla owners are very satisfied.

JD Power surveyed 10000 EVC and Hybrid owners, and 82% said they were happy with the reliability. Even Tesla drivers are happy to ignore all the imperfections.

It seems the higher the initial purchase cost, the less reliable the EV is. This generally has to do with problems with interior technology more than the day-to-day running of the car. The more expensive the EV, the more tech and onboard computers it will have, which ultimately causes trouble.

However, as I said, most EV drivers are happy to settle for less reliability as they are more concerned with owning an EV than a gas-powered car. This may change in the future, though, as EV owners will be a broader spectrum, choosing to buy an EV not necessarily for the green element but more for cost-efficiency.

EV Cost Efficiency

So we have looked at the initial entry cost of EV and determined that the cost is higher. But when we consider running costs and general maintenance, we are pleasantly surprised. The main consideration is fuel. No more pumping gas, which is rocketing in price at the moment. ($112 per barrel at 2 Mar 22). We still need to charge an EV, and electricity is not free, but it’s currently a lot cheaper than gas.

The majority of EV owners charge their cars at home. The cost of electricity varies immensely throughout the US from 9c/kW hour to 23c. But the average is 13c and has been in and around that price for over a decade.

If we can imagine that we charge our EV each day for 8-10 hours at 13c/kW, and it takes approximately 40kW to charge to 90%, the cost of a fill (so to speak) will cost $5.20. If we then convert this to a yearly cost where a full charge is approximately 250 miles, and the average person drives 12000 miles per year, this comes to a grand total of $250 for home charging. Wow!

We do have to factor in the initial setup costs of home charging which can be as much as $1000 but compared to gas, EV wins hands down.

The other cost efficiency is general maintenance. You will still have to replace tires, wipers, bulbs, etc., but no oil or filters (apart from the cabin) to replace or replenish every 6-10,000 miles. Even brake discs last longer due to their regenerative nature of them.

The cost to maintain a Tesla Model 3 for the first ten years is $3587. That works out at over $8k cheaper than a comparable-sized gas sedan.

EV Driveability

What’s it actually like to drive an EV? Well, the first startling point is the sound or lack of sound. Do you find recently you’re in a parking lot and get the fright of your life as you realize there’s a car immediately behind you or beside you? You didn’t realize it because of the lack of engine noise. That’s because there is no engine.

But lack of engine doesn’t mean lack of power. In fact, the opposite is the case. Because the power is coming from the batteries, the response is almost instantaneous. Even the smallest of EVs travel from 0-60 in under 6 seconds, and the larger EVs reduce that to under 4 seconds.

Although when you power an EV and select Drive, there are no gears, so you don’t have to think about moving up or down the gears. Even compared to an automatic, there is no sensation that the car is cycling through gears. You simply select the drive and go, and when you slow down to a stop, the brakes will regenerate the battery.

All sounds amazing. And it is, but there is the dreaded Range Anxiety. We have to talk about it. For most, it never becomes an issue. You charge your car at night. You get up and go to work or school, traveling 20-30 miles per day, return home and charge again.

But then you need to make a longer trip. Are you going to make it? Will you make it back? If you have to charge along the way, will a charger be available? It’s not like a gas station at the corner of each block. It needs some thought. And sometimes, that range anxiety is too much for people. And instead, they buy a hybrid. (Like me)

EV Repairs

Although the maintenance costs and general servicing of an EV are much lower than a gas-powered car, that doesn’t mean they won’t or don’t need repairs. The biggest concern that you may have is about the Li-ion batteries. Most EVs have a long warranty on their batteries from new, but you need to be clear about how long this is if you are considering a used EV.

Most EV brands offer eight years or 100,000 miles for their battery warranty. Many manufacturers also will guarantee that your battery will charge 60-70% while under warranty. This is great, but if you are considering a used EV, you definitely need to check how much time is left or how many miles are still under warranty.

If you had to pay for a replacement battery, the cost could be enormous.

A Tesla battery could set you back up to $20k. Yes, you read that correctly! Although a less expensive repair can be offered by Tesla servicing, where they only replace some of the cell modules.

Other brands are of similar cost. A Chevy Bolt battery replacement can cost up to $16k, with a Nissan Leaf costing a more reasonable $5500. An Audi e Tron can cost an eye-watering $36000.

It’s a huge consideration when choosing an EV. One, if you’re considering a used EV but two, if you travel a lot, the battery may just not go the distance.

Comparing Different EVs

Choosing an EV is a big decision. There is a lot to consider, from the cost to the range to whether it is the right decision for you at this time.

If you currently rent an apartment or house, can you install a charger? What if you have to move? Are you prepared to pay the installation fee a second time? Do you move a lot of people from place to place? i.e., are you a soccer mom? If you do, you’ll need a bigger EV, which will cost much more. Is it going to be the main household car? Maybe the other car is a utility truck.

If so, how would you feel about taking a trip long distance?

These are all questions that need more consideration than a regular gas car. Below is a table for some different household values.

Model Family Car Cost Range Distance

Tesla Yes $45000 315 miles

Bolt No $31000 259 miles

Leaf No $28000 226 miles

KONA No $26000 258 miles

Audi e-tron Yes $66000 222 miles

In Conclusion

An EV is a consideration for a small number of buyers currently. This is expected to grow year on year, especially with emission levels required to be reduced by countries worldwide. But choosing an EV has many more questions attached to it than a standard gas vehicle. Including where you live and how much mileage you do on a day-to-day basis.

An EV is worth it when weighing up the cost efficiency but may be outweighed by the range anxiety or the unsuitability of owning an EV within your family unit.