For U.S. car buyers looking to save money, knowing whether an electric vehicle will be worth it isn’t always obvious.
On one hand, EVs are usually more expensive compared with similar internal combustion engine (ICE) vehicles. On the other hand, EVs have cheaper annual fuel and maintenance costs that can make up for the higher sticker price over time.
Plus, EV owners might qualify for a $7,500 federal tax credit, which can negate the price difference between EVs and similar ICE vehicles (your state might have credits, too). However, without tax credits, EV owners might have to wait years before the annual cost savings make EV ownership a comparative bargain.
To give you an idea of how it breaks down, here’s a look at the difference in cost between three EVs and comparable ICE vehicles.
For each comparison, we’ll assume that EV buyers will install a 240-volt Level 2 charger in their home, since nearly two-thirds of them do, according to JD Power. While most EVs come with Level 1 chargers that plug into standard outlets, the charging speed is too slow for most EV owners.
Keep in mind that all of the figures below are estimates, and that prices may vary.
Tesla Model Y v. Audi Q5 Premium
The electric Tesla Model Y and and gas-powered Audi Q5 Premium, both with the lowest level of trim, are similar compact luxury SUVs, with 2023 base pricing at $51,380 and $45,795, respectively, according to car review website Edmunds.
Model Ys are eligible for a federal EV tax credit worth $7,500, at least until Dec. 31, 2023. But that’s undercut by the cost and installation of a Level 2 charger, which can cost thousands of dollars. Expect to pay around $2,000 as a “reasonable ballpark figure,” according to Kelley Blue Book.
After credits and other costs, the upfront price of Tesla’s Model Y is only about $100 more than the Audi Q5.
But the real savings for an EV kick in after your purchase, given the lower annual fuel and maintenance costs:
That works out to an estimated $11,525 in cost savings for the Model Y over five years.
Nissan Leaf v. Nissan Sentra
Both the EV Leaf and ICE Sentra are affordable, compact sedans made by the same company. At $29,135, the 2023 Leaf has a higher sticker price than the 2023 Sentra, which goes for $21,295, according to Edmunds.
Unfortunately, the Leaf no longer qualifies for the $7,500 federal tax credit due to recently updated manufacturing standards. Throw in a Level 2 charger and the Leaf is nearly $10,000 more than its ICE counterpart.
Even so, the Leaf has lower operating costs:
- Annual charging costs for the Leaf are about $650 — less than half of the estimated $1,750 annual fuel costs for the Sentra, according to Fueleconomy.gov.
- In this instance, the annual maintenance cost for an EV is higher than that of the ICE vehicle, as the Leaf costs owners an estimated $748 per year, compared with $491 for the Sentra, according to Repair Pal.
That works out to $843 in savings per year for Leaf owners. However, it would take nearly 12 years to make up the $10,000 difference in upfront costs when compared with the Sentra. This really underscores how the federal tax credit can help tip the balance in favor of EVs being a better bargain.
Tesla Model 3 v. BMW 330i
The performance version of the electric Tesla Model 3 and the gas-powered BMW 330i are both powerful luxury sport sedans, with 2023 models costing $54,630 and $44,795, respectively, according to Edmunds.
A Level 2 charger will add another $2,000 to the upfront costs of a Model 3. However, Model 3 owners can still qualify for a full $7,500 tax credit, at least until Dec. 31. 2023. Overall, that works out to an upfront cost of $49,130 — $4,335 more than the 330i.
Then there are annual operating costs:
- Annual fuel costs for the Model 3 average $650 — nearly four times less than the average $2,400 annual fuel costs for the 330i, according to Fueleconomy.gov.
- Annual maintenance for a Tesla costs an average of $823 per year, while the 330i averages $748, according to Repair Pal.
With annual cost savings of $1,675, Model 3 owners would cover the upfront price difference in just over two and a half years.
Other considerations
Whether an EV is worth buying will depend on other factors, too. With Level 2 chargers, some homes might need upgraded electrical panels that can add hundreds of dollars in extra installation costs. But then again, you could get by with a cheaper Level 1 charger if you only drive about 20 miles each day.
Another factor is that electricity rates vary between states, so ongoing charging costs will vary. Availability of charging stations near where you live is another consideration, in terms of convenience. For maximum flexibility, you could buy a hybrid EV that also runs on gas.
Lastly, sustainability and low carbon emissions might be more of a priority than overall cost.
Whatever you buy, pick a vehicle that best fits your needs.
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