Electric vehicles (EVs) are more popular than ever. In just a few years, they’ve gone from a relative rarity to something you may see daily on your commute. With more charging stations and a wider selection of models available, you may wonder if it’s time to join the trend and buy one.
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The most significant talking point in EV economics is electric cars are more expensive upfront, but tax breaks help make up for it. That’s an important thing to consider, but it just scratches the surface of EVs’ benefits, financial or otherwise. Here’s a closer look at all these cars have to offer to help you make the best buying decision.
Financial Benefits of Owning an EV
Cars are expensive, so the first thing you should keep in mind when looking at EVs is their financial advantages. Here are some of the most significant.
Tax Incentives
As you’ve probably heard, you can get tax credits for buying an EV. But how much can you expect to get? That depends on a few factors, but it can be substantial.
If you buy a new EV between 2023 and 2032, you can get up to $7,500 in tax credits. There are some stipulations to consider. The vehicle must undergo final assembly in the U.S., come from a qualified manufacturer, have a suggested retail price of $55,000 or less and meet a few other qualifications. Similarly, you need an income less than $300,000 for married couples filing jointly or $225,000 for heads of household to qualify.
Used EVs and vehicles you bought before 2023 can also get tax breaks. These are generally lower and have different requirements, but they can still help offset the upfront cost.
Reduced Maintenance Costs
A financial benefit of EVs you may be less familiar with is that they carry lower maintenance costs. That may seem odd initially, as most new, expensive things you find today have similar repair costs. That’s technically true with EVs, too, but they need less maintenance overall.
Electric motors have fewer moving parts than gas or diesel engines. As a result, there’s less wear and tear over time and you don’t need oil because there are no pistons to lubricate. Oil changes, belt replacements, spark plug changes and engine tune-ups all become a thing of the past.
EVs still need some maintenance — like tire rotations and brake pad changes — but overall, there’s much less to do. That saves you quite a bit of money. An electric Hyundai Kona costs just $0.079 per mile to maintain, compared to $0.098 for a gas-powered Kona.
Lower Fuel Spending
Driving an EV will also save you money through lower fuel costs. It’s a bit misleading to say EVs eliminate refueling expenses because electricity still costs money, even if you aren’t spending anything at the pump. However, electricity is cheaper than gas or diesel, so you still save in the long run.
While most electricity today comes from fossil fuels like gas, you pay less for it because of the massive scale of energy grids. One study found recharging an EV costs between $3,000 to $10,500 less than refueling a gas car over 15 years. In some states, those savings can reach as high as $14,500.
You also have more control over “refueling” prices with an EV. If you have a home charger, you can charge your car at night when electricity is cheaper, saving you more money. Predicting savings opportunities like that with volatile gas prices is a lot harder.
Savings Opportunities With Other Sustainable Technologies
If you pair an EV with other green technology investments, you could push that electrical spending even lower. Charging your car from the grid is cheaper than refueling, but it can still be costly. However, you can produce your own electricity if you install solar panels in your home, so you don’t have to buy it from the grid.
Like EVs, solar panels have high price tags but come with tax benefits to help pay them off sooner. They also let you generate free electricity. Even if you can’t power your whole home with these panels, you could produce enough energy to charge your car, eliminating recharging costs.
Factoring in solar panels’ ongoing costs, charging a Tesla Model 3 is 51% cheaper on home solar than using the grid. Combine that with the already lower costs of charging over refueling and you’ll find some considerable savings.
Better Values for Buying Used Models
Another way you can save with an EV is to buy a used one. Now that electric cars have been around for a while, you’ll have a better chance of finding one used, which helps avoid new EVs’ high price tags. Old models may not have as impressive of tax breaks, but you can often get a better deal than a used gas car because they depreciate faster.
Old EVs’ lower tax benefits and newer ones’ rapidly growing ranges make used models lose their market value quickly. That may not be great news if you’re selling an EV, but it puts you at an advantage if you’re buying one. Because they depreciate so rapidly, you can get a relatively new EV at a steep discount if you buy it used.
This option can make it easier to fit an EV into your budget. It’s important to leave room for fun and unexpected expenses in your annual budget and getting a deal on a used EV gives you more flexibility to allow that.
State-Specific Benefits
Depending on where you live, you can get some extra economic benefits, too. Some states offer additional tax credits for EVs and Connecticut offers a $38 reduction in registration fees if you drive an EV. Several areas also reduce grid electricity prices during non-peak hours to enable more affordable at-home EV charging.
Some states also offer rebate programs, providing more significant economic breaks apart from tax credits. Others incentivize EV ownership through convenience, like letting you drive in the carpool lane even if you don’t have a passenger if you have an EV. That can save you time, which can save you money on recharging and parking.
Other Benefits of EV Ownership
These economic benefits are just the start of the advantages you can experience from driving an EV. Here’s a look at some of the non-financial upsides to EV ownership.
Sustainability
The most straightforward reason to get an EV apart from economic incentives is their eco-friendliness. Transportation is the largest source of greenhouse gas emissions, accounting for 27% of all emissions in the U.S. By driving an EV instead of a gas or diesel car, you can reduce your part in that trend.
EVs aren’t totally emissions-free because most electricity still comes from fossil fuels. However, they still represent an improvement over gas-powered vehicles and if you use solar or other renewables to charge them, they can get close to zero emissions. Even when you consider production-related emissions, EVs are still more eco-friendly.
If more people drove EVs, the world would substantially reduce its harmful emissions. That’s not the only step the world needs to fight climate change, but it is an important one.
Health Benefits
Similarly, driving an EV can improve public health, too. The same carbon emissions that are bad for the environment are hazardous to your health. Being around gas-powered cars exposes you to things like carbon monoxide, CO2 and other toxins, but EVs don’t have that problem.
According to the American Lung Association, switching to electric transportation would prevent 2.7 million asthma attacks and save 110,000 lives by 2050. That’s all because there would be less air pollution endangering people’s lungs.
Trading your gas car for an electric one would contribute to this improvement in public health. Because you likely spend more time around your car than any other vehicle, it’d also protect your lung health.
Comfort and Performance
You may also find EVs provide a better driving experience. Many electric models today come with features like collision warning, blind spot detection and lane assist. Because EVs as a general category are more tech-centric and future-thinking, they often feature technologies like this that make driving safer and more comfortable.
Electric motors are also far quieter than even the most efficient combustion engines. As a result, you won’t make much noise starting your car in the morning. You’ll also have less ambient noise while driving, making for a more comfortable experience.
Some drivers are surprised to find EVs often perform better than gas-powered cars, too. Because electric drivetrains have fewer moving parts, there’s less power loss, leading to immediate torque delivery and faster acceleration. That’s how some Teslas can go from zero to 60 miles per hour in just two to three seconds — something you’d need a high-end sports car to do with a gas engine.
EVs Have Many Benefits Outside of Tax Savings
The electric vehicle federal tax credit is an enticing benefit, but it’s far from EV’s only one. If you consider your purchasing options and savings opportunities carefully enough, you can experience some massive savings by going electric.
Driving an EV will also help you lower your carbon footprint, improve lung health and have a better driving experience. The next time you’re looking for a new car, consider all these possible benefits to see if an electric one is right for you.
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