There is no doubt that there has been a lot of hype surrounding electric vehicles (EVs) in recent years. With the explosion of popularity of companies like Tesla, initiatives by other huge names in the car world such as Stellantis that they would be continuing to electrify their vehicle line up in coming years, and recent increases in the price of gasoline, it comes as no surprise that many people are considering making the switch to EVs.

Although the many benefits of EVs are well-known, there is very little information out there and very little focus given to the downside and hidden costs of owning one. Those considering making the switch from gasoline as a frugal move should take these potential costs into consideration with a mind on their budget and comfortability with the expenditures required.

The movement to EVs might be pretty hard to avoid and everyone seems to be advocating for them, however, they might not be the right fit for every family and every pocketbook. Besides the initial costs, there are other considerations such as insurance, battery costs, repairs, charging costs, and more that could potentially scare away some

Let’s take a closer look at some of the hidden costs of EV ownership!

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Initial Costs Of Owning An EV

Toyota Camry EV
VIA: Flickr PaulWay

When shopping around for an electric vehicle, many potential buyers are likely imagining all the money they will save. Unfortunately, they may be in for some serious sticker shock at the lot. The average price for an EV is over $56,000 according to Kelley Blue Book. That is around $10,000 more than the industry average of around $46,000 (which includes both gasoline and electric vehicles). Pricing-wise, buying into a low-average electric vehicle is about the equivalent to buying a luxury gasoline sedan. Many EVs go up in price from there, with some costing even more than it would take to own a Lamborghini.

The price of the actual purchase of an EV is not the only higher initial cost, though. For convenience and to extend the life of the expensive batteries within their EV, many owners opt in to purchasing and installing a “level two” charger at their home. This charger can cost $2,000 or more with installation. Another option, the supercharger, can cost upwards of $100,000 to install. Although it saves time and battery wear, the cost might deter some from purchase. Of course, an EV owner could still decide to use a common household outlet instead, but that can increase charge time from just eight hours up to forty to fully charge the EV.

As anyone who has ever purchased a vehicle from a dealer or been pulled over in a traffic stop knows, insurance is required for every car before you even drive off the lot. This is true for EVs as well. Unfortunately, though, on average, electric vehicles are more expensive to insure than their combustion counterparts. Overall, EVs cost around 15% more to insure than gas-powered vehicles, and when corresponding models exist in both categories, the EV version of a model costs between 6-40% higher than the gas version.

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Other Costs Of Owning An EV

Honda Fit EV 2010
VIA: Wikicommons bigbend700 

The often forgotten costs of EV ownership do not end with just the initial costs of purchasing, outfitting a charger, and buying insurance, though. Over the life of the vehicle, more costs begin to add up and other issues come into play including battery leases, charging costs, repairs, and even resale values.

Many of the industry leaders in EV markets do not actually include the full price of the battery in the cost of the purchase of the vehicle. In order to reduce the initial cost of the car and make it more appealing to budget-conscious buyers, the battery is instead leased. The rental charges for monthly use of the battery is often limited by miles and time and can cost up to nearly $150 per month, depending on usage. This cost does not go away for the life of the vehicle, as the EV will not run without the battery.

Another cost that can add up over time is the cost of public charging. Public charging stations cost up to 40 cents for quick charging and around 30 cents per kWh for slower charging. Although this cost is much lower than traditional gasoline, it is still quite a bit higher than that same electricity would cost you at home, where it would be around 18 cents per kWh. At a public charging port, a car that can reach a range of 150 miles would cost around $16 to refill fully, at home, it would be just $7.

Another potential issue with owning an EV (especially a newer model) is that there isn't yet a workforce of experienced mechanics ready to work on your car. Many manufacturers require the EV to be taken to a licensed mechanic through their company in order to receive repairs. Even owners can be prohibited from tinkering with their own ride by intellectual property rights and protections. This sets up EV owners to potentially receive exorbitant repair bills from higher parts, labor, and untried technology costs with little recourse.

Finally, when comparing an EV to a traditional gas-powered vehicle, the resale percentage is lower among EVs. EVs and hybrids average a resale value of under 40% of the MSRP, while conventional cars get between 50-70% of the original cost. This may be the result of concerns that the quality of the battery in the used EV is no longer efficient.

Overall, there are many benefits to owning an EV. However, setting aside the benefits for a moment, there are also many hidden costs that many potential EV owners do not consider. It is important to take all costs into consideration with such a big purchase. Once you take into account the higher initial costs as well as the costs over the lifetime of the vehicle and at resell time, it may not be the right financial fit for you or your family.