Economics
How much does it cost to charge?
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As a rule of thumb, EVs get three miles per kilowatt-hour (100MPGe) so if you drive 1,000 miles/month (12,000 miles/year), you use about 333 kWh of electricity. The average electricity cost in the U.S. is $0.12/kWh (about the same in Minnesota too), so your electricity costs for driving are about $40/month for 1,000 miles/month. If your electric utility provides an EV rate to incentivize people to charge during the off-peak hours you can usually get electricity for half off during the night time. Now, driving 1,000 miles/month costs only $20.
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If you drive the average internal combustion engine vehicle with 25 mpg, you use about 40 gallons of gas for driving 1,000 miles/month. If we assume that gas costs $2.50 per gallon, then your monthly gas costs are $100. If you drive a thirsty truck getting only 10 mpg, you use 100 gallons of gas in a month, and using the same gas price, your monthly gas costs are $250. That is twelve times more than an average EV that is charged with the off-peak rate.
Why are EVs cheaper to drive?
It is all about efficiency. Internal combustion engines used in cars are usually 15-25% efficient and electric motors used in EVs are 85-95% efficient. If you use just a quarter of energy it will be much cheaper to drive and also your overall emissions are lower.
Why are EVs cheaper to maintain?
An EV drive train has fewer moving parts and doesn’t require many auxiliary systems that are part of an internal combustion engine setup like belts, exhaust systems, alternators, emission control systems, etc. Even the traditional mechanical brakes wear less since the regenerative braking uses the motor to slow down the car and store the energy back to the battery.
Chevrolet Bolt EV maintenance schedule shows this well: "Maintenance Schedule for your 2017 Chevrolet Bolt EV" (Chevrolet)
Are EVs more expensive to buy?
It used to be that you had to pay a clear premium for EVs, but that is not necessarily the case anymore. First of all, most EVs are very well equipped, so when you do comparisons to traditional cars you have to make sure that the comparable model offers the same features as the EV does. Then there are the tax credits and other incentives and when these are taken into account EVs are, in many cases, cheaper than the comparable internal combustion counterparts. Check out the EV Info List and do your own comparisons: www.EVInfoList.com.
Does leasing an EV make sense?
Leasing works well if you want to start driving electric but want to keep your future options open. Traditionally, leasing hasn't been a very good deal for consumers, but now fast technology development is changing that equation. New technology development can make used vehicle prices drop and leasing customers don’t have any resale value risk. Presently we are starting to reach a point where people are realizing the financial advantages of EVs and this starts to put downward pressure on internal combustion engine vehicle prices. We have seen this already in high-end vehicles in Europe and can expect to see similar impacts on other segments too. Leasing an EV also works well for people and entities who can’t take full advantage of the federal tax credit. When a vehicle is leased, the leasing company can claim the federal tax credit and this should directly lower the customer monthly payments. Some companies have not done this in the past, so make sure that your leasing contract shows the impact of the federal tax credit and other potential incentives.
"Electric Vehicle Lease Guide - Best lease offers from dealers in the US" (electrek)
Are there any affordable used EVs?
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There are a lot of great deals on used EVs. Since first generation BEVs usually had less than 100 miles of range and now the average range of BEVs sold in the U.S. is over 250 miles, the price of the older models is very good. The other factor that is lowering the price of used EVs is the Federal tax credit. Even though that is only available for new cars, it still impacts the prices of used cars.
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You can use Cars.com to search for used EVs near you, but keep in mind that this service lists only vehicles at major dealers.
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CarSoup seems to have a good number of used EV listings and Craigslist and Facebook Marketplace are usually the best places for finding used EVs that are sold by private parties.
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There are also some used car dealerships that specialize in used EV sales. One example is Minnesota based GS Motors, and another one is Current Automotive in Chicago.
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The best site for finding used Teslas is EV-CPO.com. They have a very comprehensive search engine that lists all used (and new) Teslas that Tesla has at their stores.
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Can manufacturers make money with EVs?
Yes, they can:
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Ford CEO Jim Hackett: Ford Mustang Mach E will start producing profit “on vehicle number one.” Mustang Mach-E is coming to the market Q3 2020. (Bloomberg)
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Volkswagen executives are confident that individual electric models will be just as profitable as those powered by fossil fuels. "We do not expect a deterioration in margins," said VW CEO Herbert Diess. (Green Car Reports)​
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Volvo CEO Håkan Samuelsson has said that their plug-in hybrids are already profitable and EVs will be “Profitable from day one. I think we will have no intention or ambition to sell electric cars with losses.” (WardsAuto)
Since EV owners don’t pay gas tax how do they pay for road maintenance?
EVs have come into the crosshairs of state legislators seeking to make up for sagging gas tax revenues. Over time, decades of inflation and the greatly improved gas mileage being achieved by conventional gasoline-powered vehicles have reduced the amount of money that states can raise through gas taxes. Rather than increasing gas taxes or raising funds for infrastructure through other effective means, some lawmakers are instituting flat annual fees on EVs. It is only fair that electric vehicle drivers should contribute to road construction and maintenance. And they already do. Check out the Consumer Reports analysis for more information.
Are there any incentives available?
Federal tax credit for EVs
There is a federal tax credit for plug-in vehicles. The amount is based on the size of the battery, the maximum amount being $7,500. This credit begins to phase out for a manufacturer’s vehicles when the manufacturer has sold 200,000 EVs in the U.S. Tesla and Chevrolet reached that threshold last year so Tesla buyers don't get any credit anymore and Chevrolet buyers lose it starting April 1, 2020. These credit amounts are on the EV Info List and you can find more information by visiting the IRS website.
Federal tax credit for EV charging station installations
There is a federal tax credit for the cost of installing EV charging equipment. If you install EV charging equipment between January 1, 2017 and December 31, 2020, you are eligible to claim 30% of costs up to $1,000. "About Form 8911, Alternative Fuel Vehicle Refueling Property Credit" (IRS)
State and local incentives
Many states and local entities provide incentives for EV buyers and drivers. The U.S. Department of Energy has a really good tool that lists these kinds of incentives, view it here.
Your electric utility company
Utility companies want to support transportation electrification and see you charging during off-peak hours, so check out what kind of programs and incentives your local utility company might provide.
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Will an increased number of EVs also increase the price of electricity for all?
Electric utilities have for years seen the electricity sales decline because everything is becoming more energy efficient. This has put some pressure on many of them to increase their electricity rates. Electric vehicles can change this trend and because EVs can be mostly charged during the off-peak hours and there will not be a need for considerable infrastructure upgrades. This provides more revenue to utility companies and since they are either regulated by utility commissions, member-owned or exposed to a competitive marketplace, this will effectively either reduce the future price increase pressure or even lower the electricity prices.
