Financial Benefits of Owning an EV: Saving Money and the Environment
As the world embraces a more sustainable future, electric vehicles have emerged as a leading choice for planet conscious individuals. Beyond their positive impact on the earth, EVs also offer a range of financial advantages not so obvious when only looking at the up-front cost of an electric car.
In this blog, we dive into the monthly economics of owning an electric vehicle, exploring the key factors contributing to significant savings over time. From purchase price and incentives to fuel savings, maintenance costs, charging infrastructure, and battery life, we will guide you through the essential considerations to keep in mind when considering switching to electric.
Step #1: Purchase Price and Incentives
When considering the switch to an electric vehicle, understanding the initial cost and available incentives in your area is crucial. Currently, most EVs come with a higher price tag compared to traditional gas or internal combustion engine (ICE) vehicles. However, prices for EVs are already lowering (see [Ford Mach-E](https://www.reuters.com/business/autos-transportation/ford-cuts-prices-mustang-mach-e-2023-05-02/#:~:text=Prices for most Mach-E,dropping from %2450%2C995 to %2446%2C995.) and Tesla) and will continue to do so as EV technology develops and competition between manufacturers increases. Additionally, there are numerous government incentives, tax credits, and rebates that exist to offset the upfront expenses. To find specific incentives in your area, visit the U.S. Department of Energy’s Alternative Fuels Data Center. Depending on where you live and your lifestyle, driving an electric car might be your most affordable option. For example, if you drive an average of 10-50 miles a day or live in a house with private parking, driving electric could be for you. When doing your research, make sure to consider all incentives available to you as well as the up-front cost of the car.
Step #2: Fuel Savings
Owning an EV also offers significant advantages in terms of fuel savings. Charging an EV is a cost-effective alternative to traditional ICE vehicles that rely on gasoline or diesel. Our EV Savings calculator helps you compare the cost of charging an EV with the cost of fueling a gas car annually. By factoring in the average electricity prices and gas prices in your specific region, you can accurately estimate your monthly and yearly savings. It's worth noting that some workplaces and public charging stations provide free or discounted charging options, further reducing the overall cost of fueling an EV.
Step #3: Maintenance and Repair Costs
Electric vehicles typically have lower maintenance requirements compared to their ICE counterparts, further resulting in potential long-term savings. For example, a typical EV motor has only two or three moving parts, while a gas car’s engine has over a hundred! With fewer moving parts, EVs often require less frequent visits to the mechanic and have reduced maintenance costs. Unlike traditional vehicles that require oil changes, transmission repairs, and exhaust system maintenance, EVs eliminate or significantly minimize these expenses.
Step #4: Depreciation and Resale Value
Exploring the depreciation rates and resale value of electric vehicles is also helpful in understanding their long-term financial benefits. In recent years, EVs have shown relatively strong resale value, which can offset the initial higher purchase cost. Consider the trend of EVs maintaining higher resale values than traditional vehicles, as this contributes to the total cost of ownership over time.
Today, multiple factors are affecting the prices of used EVs, including OEM price cuts, inflation, interest rates, and the end of the chip shortage period. Furthermore, since most electric models have been introduced in the last two years, it is challenging to predict their precise prices three years into the future. As of now, the Tesla Model S leads the 4-door sedan category with an impressive 5-year resale value of 66%.
Step 5: Charging Infrastructure
The availability of charging stations plays a significant role in the convenience and potential cost savings of owning an EV. While there is still progress to be made with the accessibility of public charging stations across the U.S., government initiatives such as Biden’s Inflation Reduction Act aim at expanding EV charging infrastructure to 500,000 EV charging stations by 2030.
One of the biggest advantages of driving an electric vehicle is the option to be able to charge directly from home. Installing a Level 2 residential charger in your home creates a new level of convenience that is not offered when driving a gas car. Charging from home is also cheaper than charging at most public stations, allowing you to save both time and money. To learn more about Level 2 charging from home, check out our blog post.
Step 6: Range and Battery Life
The rapid development of battery technology has played a significant role in enhancing the performance of electric vehicles. With increased battery capacity and more efficient charging methods, the range limitations of early EVs are becoming a thing of the past. In the U.S. the average range of an electric car in 2022 was 291 miles, way above the average distance an American drives in one day at around 50 miles. Additionally, optimal charging practices, such as utilizing smart charging systems that help you to control when and how you charge, help maintain the health of the battery pack.
EV ownership becomes financially optimal
As we can see, owning an EV offers a sustainable and cost-effective future. With incentives and tax credits available, EVs have become an affordable choice compared to traditional vehicles. The significant fuel savings, lower maintenance costs, and potential resale value make EV ownership financially optimal. Also, the growing availability of charging infrastructure and advancements in battery technology enhances convenience and reliability.
Finding the right electrician for your EV charger and installation is now easier than ever with Lectrium. Answer a few questions about your needs, house, and charger preferences, and we'll connect you with qualified electricians in your area. Save time and get competitive quotes from experienced professionals by starting the survey here.
So, if you’re looking for a way to save money while driving toward a greener world, it’s time to embrace EV ownership!
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