In years past, electric cars seemed futuristic and out of reach for the average person. Fast forward to today and owning an electric car is no longer a far-fetched idea, but rather a viable option for many people considering purchasing a vehicle. Today’s consumers are also grappling with sky-high gasoline costs, paying about 60 percent more in gas versus the same period last year. This has led to a greater interest in electric cars as people search for new ways to deal with rising fuel costs. Between staggering fuel costs more incentives than ever to support electric car purchases, now may be a great time to consider how you can save money by investing in an electric car.
Key electric car facts and statistics
- In June 2022, 65,533 hybrid electric vehicles (18,482 cars and 47,051 light trucks) were sold in the United States. (Kelley Blue Book June 2022)
- California leads the way with the highest number of electric car registrations in 2021, followed by Florida, then Texas. (U.S. Department of Energy, Electric Vehicle Registrations by State)
- Global and U.S. sales of electric vehicles are picking up. In 2022, approximately one in 12 vehicles sold globally have been electric vehicles. (S&P Global)
- It is estimated there are currently 2.2 million electric vehicles or hybrids on the road in the U.S. (S&P Global)
- The electric vehicle market is expected to grow to 32 million vehicles globally by 2030. (S&P Global)
- Electric vehicle batteries now average about $150 per kilowatt hour, a decrease of about $600 per kilowatt hour in 2014. (International Energy Agency)
- The 50 most populous metropolitan areas accounted for 77% of new electric vehicle registrations in 2020, showing most growth of EVs is occurring in cities. (International Council on Clean Transportation)
- Roughly 96% of EV owners say they would buy or lease another one. (AAA)
- About 57% of consumers initially avoid EVs because they worry about running out of charge. In actuality, only about 5% of owners have run out of a charge. (AAA)
How do electric cars work?
Traditionally, vehicles use an internal combustion engine that relies on gasoline for the energy to move and work correctly. An electric vehicle uses electric energy, which is stored in the battery packs within the vehicle. The battery packs provide the energy source for the electric motor. You can charge the battery packs for an electric vehicle by plugging into a standard outlet at home or a charging station while out on the road.
Not all electric vehicles operate the exact same way. Battery electric vehicles, usually referred to as EVs or an electric car, get their energy solely from charging battery packs. Hybrid electric vehicles, or HEVs, use a combination of the battery pack (which needs the electric charge) and an internal combustible engine, which relies on gasoline. HEV models do not plug-in to charge the way an electric vehicle does. If you want a hybrid model that relies on a plug-in charge, you have to purchase a plug-in hybrid vehicle, or PHEV.
Electric vs. gas vehicle costs
The average cost of an electric vehicle is $66,997, according to Kelley Blue Book data published in June 2022. The same data shows this is a price increase of 13.7% compared to June 2021. The cost of a hybrid vehicle averaged $39,040 in June 2022, a 27.6% increase compared to June 2021.
While the cost of a new EV or HEV has definitely increased over the last 12 months, the price of all new vehicles has increased 11.4% in a 12-month period, according to the Bureau of Labor Statistics. Used vehicles are experiencing an increase, too, at a rate of 7.1% over the previous 12 months. Entry-level luxury cars, luxury cars and SUV/crossovers, and minivans all experienced a double-digit increase in price over the past 12 months. Subcompact cars also saw a major increase in price, with an average increase of 11.3% compared to June 2021.
Long-term benefits of owning an electric car
So what are the benefits of owning an electric car? Saving money on gas, maintenance and insurance costs stand out as some of the major benefits to EV owners.
Save on gas
The average price of gas per gallon is $4.21 for regular, according to the latest data from AAA. Most drivers are painfully aware how gasoline prices have experienced one of the most substantial increases this past year (currently around 60%). With electric cars, electricity is the main source of energy, and even with increased electricity prices (currently up 13% versus June 2021), there may be greater savings for electric vehicle owners.
To get the most accurate estimate of how much electricity it would cost to charge an EV, you can use a calculator like this one provided by the Alternative Fuels Data Center to compare the savings of charging versus filling, based on where you live and the vehicles you drive.
Save on maintenance
There are also decreased maintenance costs associated with electric vehicles, due to fewer parts and no oil usage. One report published by Consumer Reports shows electric vehicle owners save as much as $4,600 in maintenance costs versus traditional gasoline vehicles. With an electric vehicle, there are no more tune-ups and oil changes to schedule and you do not have the worry of the combustion engine breaking down like you do with gasoline-powered vehicles.
Keep insurance rates reasonable
In general, car insurance rates for electric cars tend to be slightly higher versus gasoline-powered cars. However, like other insurance policies, shopping around and taking advantage of discounts could be useful in lowering costs. Safety equipment options, such as automation or lane assist could qualify for additional discounts with the insurance providers. Overall, the more drivers on the road driving who are using the safety features like lane assist or collision avoidance, it could potentially lessen the number of accidents due to human error. As electric vehicles become more common, the cost of some of the cars’ components may come down as well, which could lead to lower average car insurance rates.
Owning an electric vehicle significantly reduces your carbon footprint. The sustainability benefits are numerous, including:
- Electric vehicles do not produce any tailpipe emissions.
- Overall air quality is better for everyone when there are more electric vehicles on the road.
- EV companies typically use eco-friendly materials in the production process.
- Even when you count the manufacturing process, the greenhouse gas emissions associated with an electric vehicle over its lifetime is lower than the average emitted from a gasoline-powered vehicle.
- The possibility of reusing and recycling the batteries for electric vehicles is growing due to better technology.
States that offer electric car incentives
Purchasing a new electric car can be an expensive proposition. However, there are several federal, state and local incentives in place that could potentially offset some of these costs. These electric car incentives encourage buyers to buy more climate-friendly alternatives to gas-powered vehicles. It’s important to research what incentives are available in your state and through your local utility companies, but here are a few programs currently available:
- Tax credits: The U.S. government provides up to a $7,500 electric vehicle tax credit for certain purchases of electric vehicles. The exact tax credit varies by brand and it should be noted Tesla and GM-branded electric cars are no longer eligible for this tax credit program.
- State incentives. Currently, 45 states and the District of Columbia provide some level of incentive for purchasing an electric vehicle. There may be local incentives with your city government as well, such as incentive programs available in San Francisco, California and Buffalo, New York in addition to state programs.
- Utility incentives: Utility companies may offer their own incentives for electric vehicle owners. Check with your utility company to see if your vehicle is eligible.
- HOV access: Some cities, such as San Jose, California and Atlanta, Georgia offer HOV lane access for anyone driving an electric vehicle. These lanes are typically restricted to vehicles with two or more passengers but this requirement is not in place for EV drivers.
- Toll incentives: Some states offer toll reduction incentives for drivers of electric vehicles.
Charging stations in the U.S.
The federal government has pledged to increase the number of charging stations available in the U.S. The more stations available, the more confident electric vehicle owners can feel while out on the road. You can find a current list of charging stations through the Alternative Fuels Data Center.
Top 10 states for EV charging stations
- Check how many charging stations are available in your area. Use the interactive map available through the Alternative Fuels Data Center to find the nearest charging station to your home, work or while traveling.
- Explore EV incentives available. There are several resources available online, including this database maintained by the Alternative Fuels Data Center, detailing the federal and state incentives available for buying an electric vehicle (or PHEV or HEV). You can also check with your local utility company for incentives.
- Once you have identified potential models, be sure to check out the vehicle’s operating range. It will be helpful to calculate how far a charge can take you and ensure it’s sufficient for your daily commute and other weekly commitments.
- Modify an outlet at home to optimize charging. You can charge an electric vehicle by simply plugging it into a standard outlet, but it takes up to 24 hours with some models. You can have an electrician install a 240-volt outlet instead, which will allow a charge to complete in four hours versus 24.
- Review maintenance requirements. One of the benefits of electric vehicles is the reduced amount of maintenance overall, but things do happen. Repair shops for EVs are still somewhat limited in many areas, so you may want to research which models require less maintenance.
Best electric cars
- Tesla Model Y: The Tesla Model Y is a compact SUV available in two models: Long Range and Performance. The Long Range model is capable of driving up to 318 miles on a single charge and has an MSRP of $58,190. The Performance series is capable of higher speeds, but less of a driving range. The MSRP for the Performance series starts at $62,190 and both models have delivery dates pushed out to later in 2022.
- Tesla Model 3: The Tesla Model 3 is the entry-level option for Teslas and is considered a compact luxury sedan. There are three trim level options and (depending on the trim package) is capable of driving 353 miles on a charge. The base price MSRP starts at $40,390 and has some availability left for 2022, but new models will likely be delivered in 2023.
- Ford Mustang Mach-E: The Ford Mustang Mach-E compact SUV offers a quick and nimble response with 480 horsepower and can drive up to 318 miles on a charge. The base price starts at $43,895 but orders for 2022 are already closed (it will be available again in 2023).
- Chevrolet Bolt EV and EUV: Chevrolet offers an electric car available in a compact sedan and compact SUV. The base price for the EV starts at $31,500 and achieves a 259 mile drive range.
- Volkswagen ID.4: The Volkswagen ID.4 offers three different options, starting with a base price of $41,230. These compact SUVs offer up to 275 miles of drive time on a single charge and are currently available for 2023 delivery.
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