Electric cars are quickly becoming more and more popular. You’ve probably seen them much more frequently these last few years. If you haven’t already, you will probably soon take a look at how much an electric car will cost you. And unsurprisingly, they are decently expensive, especially compared to the standard car.
Why do electric cars cost so much? Electric cars cost so much because of the required cost of materials to produce the batteries. These materials include lithium, cobalt, nickel, and manganese. Electric car batteries are also not mass-produced yet, so their price is significantly higher than normal.
For very obvious reasons, electric cars are very different from all other cars on the road. They get their power from an entirely different source. In your internal combustion car, the most expensive thing that can happen is for your engine to quit on you. Replacing an engine can be a very costly repair. The materials that are needed to make these batteries can be expensive and require a significant amount of processing in order to be usable. This is largely what makes up the higher cost of the electric car.
There are many other factors to consider in the cost of an electric car vs a standard car. For example, even in a fairly basic electric car, you generally have much greater acceleration than most internal combustion cars. Performance is usually something that people pay extra for and even in a fairly plain electric car, you have great performance.
It’s also important to take into account the savings that come into place when owning an electric car. The biggest of which is saving on gas. You can now charge your car in your own garage for only a couple of dollars to get a full charge. This compared to $40-$100 for a full tank of gas can mean huge savings after only a few years. Also, the cost of maintenance is usually quite lower for electric cars as they don’t require a lot of the routine maintenance that internal combustion cars need, like oil changes.
All of this information needs to be considered when you are trying to figure out what is the best deal. Electric cars will generally have a higher purchase price but can save you a lot of money down the road. It’s important that you consider this, as well as what you want out of a car to determine what is the best for you.
Why Electric Cars Cost So Much
So, why exactly do electric cars cost so much? As we previously mentioned, this is largely due to the cost of the battery itself. This is the most expensive component in the entire vehicle. Your electric car utilizes a lithium-ion battery. This is the exact same type of battery that is in your smartphone and most other rechargeable electronics.
Lithium-ion battery technology has improved significantly over the past decade or so. Through these technological advancements, it has become apparent that lithium-ion battery technology has huge potential. Compared to other types of batteries, lithium-ion batteries offer several critical advantages. First, lithium-ion batteries last much longer than normal batteries.
This makes them a great candidate for things like your cell phone. They also charge much faster than normal batteries. Lastly, and potentially the most important factor, is that lithium-ion batteries have a higher power density. This essentially means that they are able to pack more power into a smaller space.
In a lithium-ion battery, the component that ends up costing the most is the cathode. This is a result of the high costs of the materials that make up the cathode. These materials include lithium, cobalt, nickel, and manganese. All of these materials have to first be mined, which can be expensive. From there, they require significant levels of processing in order to get them to the appropriate final state and level of purity.
So, how much will an electric car battery cost you? This will vary from model to model but the average battery is currently between $7,000-8,000. For certain vehicles, this electric car battery can cost up to $20,000. A single component being that expensive is what leads to that higher price point of electric cars.
Due to the nature of electric cars and the audiences that they attract, electric car manufacturers are also very prone to including large amounts of technology into their vehicles. Electric cars are usually full of all sorts of exciting features and technology. For example, you can stream movies and play games right from the infotainment center in your Tesla. All of this technology does come at a price, albeit significantly lower than the cost of the battery itself.
Will The Price Of Electric Cars Ever Go Down?
Can we ever expect the cost of electric cars to go down? We have already seen the cost of electric cars decrease significantly over the past several years and we can expect it to continue a similar trend. Remember how we mentioned that the average electric car battery costs $7,000-8,000? That is actually an 87% decrease over the past ten years. That is an astronomical jump.
While we likely won’t see quite as dramatic of a decrease in these next ten years, we will still see a significant one. There are a lot of different reasons that are leading to this. First off, the most expensive material in these batteries is cobalt. Automotive manufacturers are currently trying to replace cobalt with nickel, as this will help them save quite a bit of money. Additionally, nickel can actually hold even more energy than cobalt. This will allow smaller batteries to hold more charge than before.
Secondly will be a focus on the technology and processes used in processing the materials. Almost all of the major car manufacturers have announced their plans to slowly phase out all internal combustion engines and to focus on alternative energy methods, including electric cars. Exciting new high-performance electric cars loaded with lots of new technology is also catching the public eye.
As such, many companies are quickly trying to find ways to reduce costs and improve processes. Many of the processes used to purify and prepare the materials used in the batteries will likely improve significantly over the next decade. Introducing new technologies to these processes will also help move things along more efficiently.
Lastly, we will likely see further standardization of the electric car market. Currently, every single electric car out there has its own custom-designed electric battery pack. The power output, size, weight, etc. are all hand-selected for the car. This allows for great tuning of electric car dynamics, performance, and range but isn’t great for your pockets.
By creating standardized electric batteries that will be used on a wide array of electric cars, you will significantly reduce the cost of the batteries themselves. Fewer equipment changeovers in building the batteries allow for quicker manufacturing times. Additionally, there will likely be more batteries available on short notice. This will help bring the cost of electric cars down as well.
Are Electric Cars Cost Efficient In The Long Run?
As we’ve discussed, with electric cars, the up-front sticker price can be much higher than an internal combustion car, but over time it can save you money. So, in the long run, is it actually cost-efficient to own an electric car? Or does it come out about the same?
Obviously, one of the biggest things that an electric car saves you on is gas. The average gasoline car owner spends about $1,100 a year on gas. The cost to operate an electric car actually comes out to less than half of that. Currently, the average cost of electricity for an electric car is under $500 a year. This means that you can save several hundred dollars each year by driving an electric car instead of an internal combustion car.
On top of the monetary savings, it is also much easier to plan financially for the cost of electricity as compared to the cost of gas because gas prices can fluctuate quite a bit. In the past few years, we’ve seen gas prices bounce from just over $2 a gallon to over $4 a gallon. Electricity rates don’t fluctuate nearly as much. That means you can expect a fairly consistent cost to charge your car across multiple years.
There are also a lot of incentives for buying and owning an electric car. As we are discussing power, there are some power companies that will offer discounts to people who own electric cars. This will make it so you can save even more money every time that you charge your car.
When it comes to buying an electric car, there is also an opportunity for a lot of different tax incentives as well. This will vary depending on when you buy your car as well as where you live. Different states and counties offer different tax exemptions. There are also federal tax credits that you can get for buying an electric car. This can make it much easier to swallow the higher rates for electric cars.
Electric cars can also save you quite a bit of money when it comes to maintenance. You no longer have to worry about getting oil changes, flushing coolant, changing fuel filters, changing spark plugs, etc. There are a lot of small tasks that you no longer have to worry about. Although electric cars aren’t maintenance-free, the maintenance required is significantly less. Additionally, electric cars utilize regenerative braking when slowing down. This utilizes the electric motors quite a bit to slow the car down, thus reducing the amount of wear on your brakes. This means that even your brakes will last longer on an electric car.
All of the things we have talked about are what make owning an electric car worth it to many people. For now, it’s up to you to decide if that decision is correct for you. There are tons of ways that an electric car can save you thousands of dollars over the next several years.
Electric Car Depreciation vs. Regular Car Depreciation
You may wonder how electric car depreciation compares to other vehicles. Electric cars actually do depreciate faster than most normal cars. In fact, after three years, the average electric car depreciates 52% whereas a gasoline-powered car depreciates about 39%.
There are several reasons for this. First off, there is still a higher demand for gasoline-powered cars than electric cars. While the percentage of sales of electric cars grows higher each year, there is still a much higher demand for internal combustion. When it comes to the value of a used vehicle, this value is largely determined by the demand. If there is little to no demand for a used car, it won’t be worth much. Electric cars are still in this boat but as the amount of electric cars grows, we will start to see electric cars hold their value much better.
What Are The Most Affordable Electric Cars?
After all of this discussion, you may be wondering what the cheapest electric cars out there might be. There are several electric cars out there that you can get for relatively cheap. We will only discuss new cars in this article. There are a lot of used electric cars available that you can get for a fraction of the price of the ones that we will discuss here. If you don’t have a lot of money to invest into your first ever electric car, that may be an option for you.
So, the cheapest electric car that you can get is the Nissan Leaf. This car was once the flagship of electric cars. It has now lost a lot of its publicity due to flashy new electric cars like Tesla or the Mach-E. Regardless, if you want a cheap and comfortable electric car, you can get yourself a new Nissan Leaf starting at just $28,000. This base price will get you almost 150 miles of range with the option to upgrade to an even larger battery pack. If you are worried about spending a lot of money on an electric car, this is a great choice for you.
The Chevy Bolt is another iconic yet affordable choice. This car starts out at just $32,000. While this car is a couple of thousand dollars more expensive than the leaf, it has quite a bit more range. Even with the base Bolt, you have 259 miles of range. That’s almost twice what the leaf offers. You also get a comfortable interior loaded with lots of technology.
Over the past few years, Hyundai has really started to make a name for itself in the electric car market. Many of their offerings come at a very affordable price point and offer range and performance which is extremely competitive. The first one to mention is the Ioniq. This car starts at $34,000 and offers 170 miles of range. You get a decent amount of technology along with some Level 3 Charging.
The second Hyundai electric car to mention would be the Kona. This one comes in $1,000 more expensive than the Ioniq but offers 258 miles of range. This car offers a lot of standard equipment which makes it a great deal.
As you can see, brand new entry-level electric cars start right around the $30,000 price mark. Most of these cars also come with lifetime warranties on components such as the battery. If these prices are still a little too high, you can get the used versions of all of these vehicles for a fraction of the price. The same goes for more luxurious electric cars such as the different Tesla models, The Mach-E, the I-Pace, and the Polestar 2.