If you’re considering switching to an electric car, or just adding one to your driveway, there are some cost savings and some costs to keep in mind.
A new tax credit for electric vehicles is helping to cover the cost of these expensive vehicles. But there’s more to consider than the purchase price of these vehicles, which, according to the Kelley Blue Book, averaged $61,448 in December.
Experts say EV buyers should consider everything from federal and state EV incentives to how much they can spend on recharging and gas, and the potential cost of installing home charging. While electric vehicles claim to require fewer scheduled maintenance than gasoline-powered vehicles, electric vehicles can be more expensive to repair given the amount of technology these vehicles incorporate.
Here are all the points to consider when calculating whether an electric car will save you money in the long run.
Electric vehicle tax credits under the Inflation Reduction Act cover the upfront cost of an electric vehicle, but it is important to know the details of eligibility before placing an order.
Eligible new electric vehicles are currently eligible for a $7,500 tax credit. The US Treasury Department and the IRS are expected to issue additional guidance in March on which vehicles are eligible for the loan, which could exclude some vehicles that are currently being loaned.
That’s why car buying experts say that if you want to make sure you’re getting the full tax credit when you buy an electric car, now is the time to do it.
The other part of the EV savings equation is whether or not owning a battery-powered car actually saves you money on gas.
While gasoline prices remain low and automakers are tweaking engines for better fuel economy, electric vehicles are hard to sell to the average buyer. That changed a bit last year when natural gas prices climbed to new highs.
Edmunds did its own cost analysis last year and found that while the cost of electricity is more stable than the cost of gas, the average rate per kilowatt hour varies from state to state. At the low end, Alabama residents pay about $0.10 per kilowatt hour. In California, where electric vehicles are more popular, the average home costs about $0.23 per kilowatt-hour, Edmunds said.
Most public charging stations are now much cheaper than gas stations, and many of them still offer free charging, depending on which vehicle you’re driving.
Most EV owners primarily charge at home, and most EVs come with a power cord that plugs into any standard 110-volt household outlet. However, these cords don’t provide as much power to your battery at once, and they charge much faster than the higher voltage level 2 chargers.
Experts say the cost of installing a Level 2 home charger can be quite high and should be considered as part of the overall cost of an electric vehicle.
The first requirement for installation is a 240 volt outlet. Homeowners who already have such outlets can expect to pay $200 to $1,000 for a Level 2 charger, not including installation, Edmunds said.