Interest in electric vehicles is rapidly increasing, with 51% of car buyers considering new or used EVs in 2024, up from 38% in 2021, according to a Cox Automotive survey1.
But before taking the plunge into electric car ownership, it’s important to be aware of some unexpected expenses that can catch new EV owners off guard.
1. Higher Purchase Price
One of the most significant hidden costs of EVs is the higher upfront purchase price compared to similar gas-powered vehicles. On average, electric cars cost over $11,000 more than their internal combustion engine counterparts.
While prices are coming down as battery technology improves, be prepared to pay a premium for going electric, at least for now.
2. Home Charging Equipment
To conveniently charge your EV at home, you’ll likely want to install a Level 2 charging station in your garage.
The equipment itself costs $400-$700, but the total bill can reach up to $3,000 once you factor in the cost of electrical work and professional installation. Some automakers offer discounts or rebates on home chargers, but you may still end up footing a good portion of the bill.
3. Increased Electricity Costs
Charging an EV will add to your monthly electric bill. How much depends on local electricity rates and if you charge at home or public stations.
While “fueling” an electric car is still cheaper than gas, make sure to budget for this ongoing expense. Consider switching to a time-of-use electricity plan to save money by charging during off-peak hours.
4. Pricier Insurance Premiums
Insuring an electric vehicle often costs more than coverage for a comparable gas-powered car.
The higher price tag of EVs and their more expensive repair costs are the main reasons for elevated premiums. Insurance for some models like Teslas can cost 20-50% more than the average gas car. (ref) Shop around to find the best rates since some insurers are more EV-friendly than others.
5. Quicker Tire Wear
The heavy batteries and instant torque of electric cars can cause tires to wear out around 20% faster than on traditional vehicles. (ref)
Replacing tires more frequently is an added expense to anticipate, especially since many EVs require pricier specialized tires. Rotating tires regularly and keeping them properly inflated can help extend their lifespan.
6. Potentially Expensive Repairs
The specialized computers, sensors, and other high-tech components are costly to fix or replace. Additionally, fewer independent shops are qualified to service EVs compared to gas vehicles, so you may be stuck with pricey dealership repair rates.
7. Degrading Battery Capacity
While batteries typically last 10-20 years, they will eventually need to be replaced. With battery packs making up a large chunk of an electric car’s cost, swapping in a new one can cost $5,000 to over $20,000, depending on the vehicle.
8. Cold Weather Range Reductions
Frigid temperatures can substantially reduce an EV’s range on a charge, sometimes by 40% or more. (ref)
Batteries are less efficient in the cold, plus energy is used to heat the cabin. EV owners in northern climates need to plan for more frequent charging stops in the winter. Preheating the car while still plugged in can help minimize range loss.
9. Rapid Depreciation
Since electric vehicles tend to depreciate faster than their gas-powered counterparts, this can make for a disappointing resale value down the road. While depreciation rates vary by model, expect your EV to lose value quicker than the average gas car.
10. Special Registration & Road Use Fees
Because EV owners don’t pay gas taxes, many states are adding special registration fees for electric vehicles to make up for the lost revenue.
These annual surcharges often range from $50 to $200 depending on the state. Some states are also exploring implementing mileage-based road use fees for EVs.
Source:
1. PR Newswire Release
Davin is a jack-of-all-trades but has professional training and experience in various home and garden subjects. He leans on other experts when needed and edits and fact-checks all articles.