The Most Misunderstood Aspects of EV Ownership Costs

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Want to buy an electric vehicle in 2024? Make sure you understand the full picture of EV ownership costs. Here’s what you should know. 

If you’re worried about climate change and enthusiastic about electric vehicle technology, you’re probably eager to buy an EV. With massive federal subsidies, new EV charging infrastructure, and the world’s leading car companies launching new all-electric models, EVs look like the future of the auto industry.

But not everyone is on board with EVs. A 2023 Pew Research survey found that 50% of U.S. adults are “not too likely” or “not at all likely” to buy an electric vehicle for their next car. “Range anxiety” is a common concern among people who are hesitant to buy an EV — this means fear of running out of battery far from home. Other people worry about finding enough public charging stations.

But one of the biggest questions is: Will an EV save you money compared to a conventional gas-powered car?

Let’s look at a few misunderstandings about electric vehicle ownership costs — and how you can save money when buying an EV and driving it for years to come.

Misunderstanding No. 1: EVs have zero fuel costs

One of the biggest selling points of electric vehicles is that they don’t need gas. When you buy an EV, your gas budget goes to $0. However, EVs still need fuel in the form of electricity — and unless your home is entirely powered by solar panels that you own, electricity isn’t free. You’ll still have some costs involved in powering your electric vehicle.

But even though electric vehicle fuel costs are not “zero,” they still represent a big savings compared to gas-powered cars. According to Chase Auto, the costs of powering an electric vehicle are about half the costs of fueling a gasoline-burning car. Americans spend an average of $2,148 per year on gasoline (according to research from The Ascent), so if you cut that cost in half with an EV, you’d save $1,074 per year on gas by switching to an electric vehicle.

Misunderstanding No. 2: EVs don’t need maintenance

It’s true that, because they don’t have an internal combustion engine, electric vehicles have simpler maintenance. EVs don’t need oil changes, transmission service, cooling system flushes, or replacements for spark plugs and drive belts. EV engines don’t have as many moving parts as a gas-powered car. Electric vehicle brakes and brake pads also tend to last a lot longer than on a conventional car, because of EV regenerative braking.

But just like fuel costs, your EV maintenance costs will not be “zero.” Electric vehicles still need maintenance, and for some things, the costs might be more expensive than a gas-powered car. For example, EVs need more frequent tire rotations, and the tires might need to be replaced more often (due to the higher weight of the car — batteries are heavy).

But on the whole, according to research cited by Chase Auto, EV maintenance could cost about $600 less per year ($3,000 over five years) compared to a gas-powered car.

Misunderstanding No. 3: EV car insurance costs the same as regular cars

One of the ongoing costs of owning a car is paying for car insurance. If you’ve been struggling with high prices for car insurance, you might want to think twice before you buy an EV. Depending on which EV you buy, your car insurance costs might be more expensive than for a similarly-priced gas-powered car.

Here’s why: Although electric vehicles are cheaper to maintain, if you get in a crash, they’re often more expensive to repair — and auto insurers realize this and charge more for insurance. Electric vehicle parts can be harder to get, and not every mechanic or body shop is certified to fix electric vehicles. As EVs become more widespread, these extra EV repair costs should come down. But in the meantime, if you buy an EV, you might need to be prepared to pay a “premium” for your car insurance premiums.

Bottom line: EV ownership costs can be expensive, even if you get the full $7,500 EV tax credit for buying a new electric vehicle. But don’t let that hold you back from getting an EV. With all the money you save on gas and maintenance, EV ownership costs can be competitive with a gas-powered car — or even less.

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The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.JPMorgan Chase is an advertising partner of The Ascent, a Motley Fool company. The Motley Fool has positions in and recommends JPMorgan Chase. The Motley Fool has a disclosure policy.

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