Although gasoline prices have declined over the past few weeks, refueling the family car continues to put a financial strain on many households, especially those dependent on a large SUV or pickup truck, and / or a model that runs on expensive premium gasoline as their primary mode of transportation. This has helped fuel (so to speak) unprecedented market demand for electric cars to help ease consumer pain at the pump.
Unfortunately, it’s still not cost-effective to dump an existing internal combustion vehicle for a more energy-efficient electric vehicle just because of high gasoline prices.
Indeed, despite the availability of a few affordable electric cars like the Nissan Leaf and Chevrolet Bolt EV priced between $30,000 and $30,000, most mainstream models still start between $40,000 and $50,000. . Luxury models run much higher, with some premium EVs like the Porsche Taycan and Lucid Air maxing out at $100,000.
Additionally, due to rising material costs and sheer demand, retail prices are rising even more. Ford recently upped 2023 versions of its top-selling all-electric Mustang Mach-E SUV from $3,200 to $8,675, depending on trim level, and upped the sticker on the F-150 Lightning pickup truck by $6,000. at $8,500.
And these are just retail prices. With new models remaining in short supply due to supply chain issues and increased consumer demand, new EVs typically sell above their list prices, at least where they can be found in stock. For example, according to consumer reports, the Kia EV6 typically sells for 20% more than the list price. A few of the most requested models can be found with “additional dealer markups” of several thousand dollars.
As it stands, the average price paid for an electric vehicle hit $66,000 this summer, nearly 14% higher than it was a year earlier. By comparison, the average conventionally powered vehicle costs around $46,000.
These are the most affordable electric cars for 2022, with retail prices all starting in the $30,000 range; they include mandatory car manufacturer destination charges, but not dealer options, taxes, fees and markups:
- Nissan Leaf: $28,495 to $36,495
- MINI Cooper SE: $30,750
- Chevrolet Bolt EV: $32,495 to $35,695
- Chevrolet Bolt EUV: $34,495 to $38,995
- Mazda CX-30: $34,695 – $37,705
- Hyundai Kona Electric: $35,295
Here are the most expensive EVs in the US, all starting and/or hitting the six-figure range:
- Porsche Taycan: $84,050 to $188,950
- Lucid Air: $89,050 to $170,650
- Audi RS e-tron GT: $143,895
- Tesla Model X: $122,190 to $140,190
- Tesla Model S: $106,190 to $137,190
- Mercedes-Benz SEQ: $106,952 to $126,895
- GMC Hummer Electric: $110,295
Tax credits can help offset the initial cost, but there is a catch. In recent years, the federal government has helped boost sales by providing buyers of electric vehicles with a one-time tax credit of $7,500, refundable through the following year’s return. In some cases, the credit, along with additional incentives offered by several states, is enough to wipe out most or all of an EV’s price premium. For example, a Nissan Leaf that starts at $28,495 will effectively cost $20,995 for buyers eligible for the federal credit; those living in Illinois can additionally take advantage of a $4,000 rebate, bringing the purchase price down to $16,995.
With General Motors and Tesla’s credits already exhausted and Toyota poised to wind down after hitting the 200,000 unit sales threshold for electric vehicles and plug-in hybrids set by the original initiative, Congress recently extended the $7,500 federal incentive through the end of 2032.
However, while the Inflation Reduction Act, as it is called, restores the credits for GM and Tesla effective January 1, 2023, they are now applied selectively among all automakers. Only models assembled in North America are eligible, provided they cost less than $55,000 for cars and $80,000 for SUVs and pickup trucks. This automatically limits the availability of credits to a relative handful of models. Additionally, federal grants are now only available to families with gross incomes below $300,000.
These are the 2022 and 2023 model year electric cars that would qualify for the one-time federal tax credit, given their country of origin and base retail prices, according to the U.S. Department of Energy:
- Chevrolet Bolt EV (effective January 1)
- Chevrolet Bolt EUV (effective January 1)
- Ford Mustang Mach-E
- Ford F-Series
- Ford Transit van
- Nissan Leaf
- Rivian R1S
- Rivian R1T
- Tesla Model 3 (effective January 1)
- Tesla Model Y (effective January 1)
How about buying a used electric car instead to save money? Normally that would be a good decision, but these are not ordinary times. Thin inventories and exorbitant prices for new cars have pushed more buyers into the used-car side than ever before. This resulted in a fairly significant increase in the value of used vehicles, rather than depreciation. Prices for used cars in general have risen by an average of almost 10.1% over the past year. But that’s a tip to prices for used electric vehicles, which have jumped 54.3% on average over the same period, according to car search engine iSeeCars.com. Before the pandemic, most electric vehicles (with the exception of Tesla) depreciated at much higher and faster rates than internal combustion models.
If you’re shopping for a used electric vehicle, you might want to avoid these one- to five-year-old electrified rides — at least for now — which iSeeCars.com says have seen the biggest price increases over the past year. of the last year. , with percentages and average transaction prices noted:
- Nissan Leaf: +45.0% ($28,787)
- Chevrolet Bolt EV: +29.3% ($28,291)
- Tesla Model S: +27.5% ($83,078)
- Tesla Model X: +19.7% ($90,484)
- Tesla Model 3: +16.2% ($55,766)
- Kia Niro EV: +15.7% ($37,732)
- Tesla Model Y: +13.6% ($70,065)
- Audi e-tron: +9.9% ($65,420)
Of course, the transaction price of an electric vehicle is only part of its total cost. If charged at home, EVs are generally less expensive to run than comparable gas-powered models, although the amount varies from EV to EV. And because electric vehicles are less mechanically complex than internal combustion vehicles, maintenance costs are lower, with scheduled service visits typically limited to inspections and replacement of the cabin air filter and windscreen wipers. However, insurance and repair costs are usually higher. And given the current state of the market, predicting the resale value of a given electric vehicle is more child’s play than ever.
We will examine the costs of owning electric vehicles in a future article.