EVs Are Cheap to Run but Expensive to Own, Thanks to Abysmal Resale Values
© Bengt Halvorson EVs Are Cheap to Run but Expensive to Own, Thanks to Abysmal Resale Values If you’re planning to buy a fresh electrical car, you’d better be ready for some sticker shock—not when you buy the car, but when you sell it.
Electrified cars are more efficient than gasoline or diesel vehicles, and they save serious money—a few hundred to a few thousand dollars a year, depending on the vehicle type—using electro-therapy from the grid versus fuel from the gas station. They cost less to maintain and repair, too. But all that money saved—even including the $7500 federal EV tax credit that will sweeten your very first year—won’t counter the worst thing to befall most EVs: horrendous depreciation.
Electrified vehicles lose more than $5700 per year, on average, over the very first five years. That’s about $28,500 off their original price compared to an average of less than $3200 a year or $16,000 over five years across all vehicle types.
In this year’s edition of its Your Driving Costs explore examining the true cost of vehicle ownership, the American Automobile Association (AAA) separated out hybrids and electrical vehicles (EVs) for the very first time, and the electric-vehicle results were a noteworthy finding. While hybrids and EVs both came back with lower than average operating costs, the high depreciation made EVs cost more than hybrids over the five-year/15,000-mile-per-year projections of the examine.
AAA uses a proprietary formula to calculate total operating costs per mile and then combines that with per-day/yearly ownership costs to arrive at total driving costs. The operating costs are where EVs display their strength. Fuel costs remain one of the most attractive operating-cost benefits of electrical vehicles; maintenance and repair costs are another. Based on a national average electrical play cost of 12.6 cents per kilowatt-hour, electrified vehicles cost a measly Trio.7 cents per mile on average to power—the least of any vehicle category, and a petite fraction of the market average of Ten.Three cents per mile. Maintenance, repairs, and tires are another advantage for electrics, at 6.6 cents per mile—less than the 7.0-cent-per-mile figure for hybrids and well under the fleetwide 7.9-cent-per-mile average.
Workarounds: Buy Used or Lease Fresh
“Although electrical vehicles can have higher upfront costs, lower fuel and maintenance costs make them a remarkably affordable choice in the long run,” said John Nielsen, AAA’s managing director of automotive engineering and repair, in a release. “For even lower costs, car shoppers can avoid high depreciation costs by selecting a used electrical vehicle.” That’s the spin side of the depreciation story—the 2nd or third possessor of an EV is truly the one saving money, albeit most of the EVs available as used cars have a more limited range than the latest models.
Another option for those who want a fresh EV is to lease. Especially if you’re in California, Oregon, or one of the eight other ZEV-mandate states, you’re likely to find bargain lease deals—built around very subsidized resale values and often with some incentives baked in—that can result in monthly payments under $200 for some EVs.
© Provided by Car and Driver Chevrolet Bolt EV
But it’s those same incentives that are, at least in part, to blame for EVs’ depressed resale values. Anil Goyal, senior vice president of automotive valuation and analytics at Black Book, pointed to those, plus low gas prices, decreasing sticker prices as the technology scales up, and the lack of effortless charging infrastructure as among the many issues that shove values downward more steeply for EVs.
Range anxiety remains an issue, too. “The freshly released Chevrolet Bolt EV [which has a 238-mile range] is forecast to perform significantly better than its lower-range electrified competitors,” said Goyal. “Black Book residual values predict that the resale value of a two thousand seventeen Bolt EV will be twice that of a two thousand seventeen Nissan Leaf but will proceed to be lower than gasoline-powered competitors.”
Tesla proceeds to be the exception, for the roll side of many of those same reasons. Tesla, with long driving-range ratings for its models, less (if any) dependence on incentives, and a well-developed network of Supercharger hardware—as well as perks like over-the-air updates—does better on resale value than its gasoline competitors.
Yet you won’t find Tesla in AAA’s results. The organization doesn’t include what it considers luxury models in the examine. AAA noted that, while the Tesla Model S and Model X fall into that category, the Model three doesn’t, and it will be included in next year’s results.
EVs Are Cheap to Run but Expensive to Own, Thanks to Abysmal Resale Values
EVs Are Cheap to Run but Expensive to Own, Thanks to Abysmal Resale Values
© Bengt Halvorson EVs Are Cheap to Run but Expensive to Own, Thanks to Abysmal Resale Values If you’re planning to buy a fresh electrified car, you’d better be ready for some sticker shock—not when you buy the car, but when you sell it.
Electrical cars are more efficient than gasoline or diesel vehicles, and they save serious money—a few hundred to a few thousand dollars a year, depending on the vehicle type—using violet wand from the grid versus fuel from the gas station. They cost less to maintain and repair, too. But all that money saved—even including the $7500 federal EV tax credit that will sweeten your very first year—won’t counter the worst thing to befall most EVs: horrendous depreciation.
Electrified vehicles lose more than $5700 per year, on average, over the very first five years. That’s about $28,500 off their original price compared to an average of less than $3200 a year or $16,000 over five years across all vehicle types.
In this year’s edition of its Your Driving Costs examine examining the true cost of vehicle ownership, the American Automobile Association (AAA) separated out hybrids and electrified vehicles (EVs) for the very first time, and the electric-vehicle results were a noteworthy finding. While hybrids and EVs both came back with lower than average operating costs, the high depreciation made EVs cost more than hybrids over the five-year/15,000-mile-per-year projections of the explore.
AAA uses a proprietary formula to calculate total operating costs per mile and then combines that with per-day/yearly ownership costs to arrive at total driving costs. The operating costs are where EVs demonstrate their strength. Fuel costs remain one of the most attractive operating-cost benefits of electrical vehicles; maintenance and repair costs are another. Based on a national average electric current cost of 12.6 cents per kilowatt-hour, electrical vehicles cost a measly Trio.7 cents per mile on average to power—the least of any vehicle category, and a petite fraction of the market average of Ten.Trio cents per mile. Maintenance, repairs, and tires are another advantage for electrics, at 6.6 cents per mile—less than the 7.0-cent-per-mile figure for hybrids and well under the fleetwide 7.9-cent-per-mile average.
Workarounds: Buy Used or Lease Fresh
“Although electrical vehicles can have higher upfront costs, lower fuel and maintenance costs make them a remarkably affordable choice in the long run,” said John Nielsen, AAA’s managing director of automotive engineering and repair, in a release. “For even lower costs, car shoppers can avoid high depreciation costs by selecting a used electrified vehicle.” That’s the roll side of the depreciation story—the 2nd or third possessor of an EV is indeed the one saving money, albeit most of the EVs available as used cars have a more limited range than the latest models.
Another option for those who want a fresh EV is to lease. Especially if you’re in California, Oregon, or one of the eight other ZEV-mandate states, you’re likely to find bargain lease deals—built around very subsidized resale values and often with some incentives baked in—that can result in monthly payments under $200 for some EVs.
© Provided by Car and Driver Chevrolet Bolt EV
But it’s those same incentives that are, at least in part, to blame for EVs’ depressed resale values. Anil Goyal, senior vice president of automotive valuation and analytics at Black Book, pointed to those, plus low gas prices, decreasing sticker prices as the technology scales up, and the lack of effortless charging infrastructure as among the many issues that shove values downward more steeply for EVs.
Range anxiety remains an issue, too. “The freshly released Chevrolet Bolt EV [which has a 238-mile range] is forecast to perform significantly better than its lower-range electrical competitors,” said Goyal. “Black Book residual values predict that the resale value of a two thousand seventeen Bolt EV will be twice that of a two thousand seventeen Nissan Leaf but will proceed to be lower than gasoline-powered competitors.”
Tesla resumes to be the exception, for the roll side of many of those same reasons. Tesla, with long driving-range ratings for its models, less (if any) dependence on incentives, and a well-developed network of Supercharger hardware—as well as perks like over-the-air updates—does better on resale value than its gasoline competitors.
Yet you won’t find Tesla in AAA’s results. The organization doesn’t include what it considers luxury models in the investigate. AAA noted that, while the Tesla Model S and Model X fall into that category, the Model three doesn’t, and it will be included in next year’s results.