If you’re considering a new car, you’ve probably found all the hype about electric vehicles difficult to ignore. Today, we aren’t addressing the pros and cons of buying and owning an EV compared with an internal combustion engine gasoline-fueled vehicle. We’re here to dive more deeply into the many factors contributing to the costs of electric car daily ownership. We’ll examine operational costs, providing a more informed path to estimating the actual cost of electric...
What are the hidden costs of EV ownership? We define hidden costs of electric vehicle ownership as costs you need to budget for monthly or annually when you own an EV. Although the EV and ICE vehicle share the same trim level name for both brands, EVs typically come with more features than ICE vehicles. Consequently, it isn’t exactly an apples-to-apples comparison. To compensate for that, let’s drop both disparities by 25% to $8,558 for Kona and $12,750 for the XC40. This is our estimate of the average transaction price difference if the EV and ICE vehicles provide the same features.
PRO TIP: Before laying out the money for a Level 2 charger, ask a professional to evaluate your electrical system to determine if the 240V source is available and the costs associated with running it where you need it. Whether you pick the portable or install a Level 2 charger, you need a 240V power source.Just like the price-per-gallon costs of gas, electricity rates fluctuate. According to a March 2023 article in Forbes, electricity costs surged across the U.S.
Replacement costs remain historically high. For example, J.D. Power reported that the average cost of replacing the battery in a Tesla Model S, Model X, or Model three could cost at least $13,000. You can buy a 2023 Model three for about $40,240. In other words, the battery is about 30% of the total cost of the Model 3. This is not an exception. The reality is that the battery is a significant contributing factor to the price of an electric vehicle.
Another foe of healthy batteries is DC fast chargers. Forcing electricity into a battery at an elevated volume takes a toll on the battery’s capacity. Repeated charging at a fast charger will reduce the battery’s ability to charge fully. Moreover, repeatedly filling a battery to 100% capacity will also hasten the loss of charging capacity, and carmakers recommend charging to 80% at fast chargers.
In some cases, the differences aren’t significant. However, in others, they’re huge. We believe if the gulf between the average EV price and the average ICE vehicle price continues to close, the residual value gap will also tighten. In the meantime, however, the odds are, EVs will continue to bleed value at a brisker rate than ICE vehicles. In the case of our comparison models, a much faster rate.