Are Electric Cars Worth It in 2023 – 2024? EASY Guide

Thinking about getting a new car but not sure which one to invest in? With rising gas prices, why not consider going for an electric car? Now I know what you’re thinking: “Are electric cars worth it?” I’m an engineer with more than a decade of experience in the automotive industry, so let me break it down for you.

Are electric Cars Worth It?

Electric vehicles (EVs) offer various advantages that could potentially make them worth the investment. Electric cars can save money on fuel and maintenance in the long run, but have higher upfront costs compared to gas cars. They’re better for the environment, offer a smooth driving experience, and qualify for tax credits. Limited range and lack of charging infrastructure remain top concerns.

The initial cost of an electric car can be higher than a conventional vehicle, although long-term savings on gas may offset this expense. Ultimately, the decision to purchase an electric car depends on individual driving habits and priorities.

So, are EVs worth it? Let’s check in more detail everything you need to know!

Cost-Effectiveness of Electric Cars

When considering the cost-effectiveness of electric cars, it’s important to take into account various factors such as the purchase price, operating cost savings, purchase incentives, and long-term ownership savings.

Is an electric car worth it? For many potential buyers, the upfront cost is a major factor when deciding between an electric or gas-powered car. Here’s a look at how they compare:

1. Purchase Price

The Manufacturer’s Suggested Retail Price (MSRP) for an electric vehicle is typically $10,000-$20,000 higher than a similar gas model. This price premium is largely due to the high cost of batteries which make up 10-30% of the total vehicle price.

However, according to the U.S. Department of Energy, battery prices have been steadily dropping by about 10-15% per year over the last decade. For example, this means that in the last 5 years, the price of lithium batteries for EVs dropped by about 40%. Not bad! Moreover, with the advancing of technology and as production scales up further, electric vehicle prices are expected to reach cost parity with gas vehicles in most segments by 2027.

2. Federal Tax Credit

To incentivize adoption, the U.S. government offers up to a $7,500 federal tax credit for qualifying electric vehicles. When factoring in potential savings from the tax credit along with state and local incentives, the upfront price difference narrows significantly.

3. Fuel Costs savings

Over the lifetime of the vehicle, an EV’s lower operational costs help recover the higher initial investment. Electricity is a cheaper “fuel” than gasoline.

Here’s what you can expect to save when comparing electric vs hybrid vs gas cars:

The data in the above table has been extracted from the chart of the Idaho National Lab (INL) and shows that electric cars, as well as hybrids, can save owners a lot of money in fuel costs over time compared to traditional gasoline or diesel vehicles.

Due to the superior fuel efficiency of electric cars, fuel savings can offset the higher purchase price over time. This means that depending on your annual mileage, electric vehicles can be financially viable in the long run for those who prioritize low operating costs and eco-friendliness over other factors such as power.

However, it’s important to note that fuel efficiency has been improving in traditional gas-powered vehicles too, making the lifetime cost savings from electric cars less significant than they once were. Still, EVs provide considerable advantages for commuting drivers looking to reduce their carbon footprint and save some money.

Here you can find a handy calculator that was developed thanks to a collaboration between the U.S. Environmental Protection Agency (EPA) and the Department of Energy. The calculator allows you to compare the expected fuel savings of your favorite electric car versus any other car (gas, hybrid, or other electric). Here’s an example comparing a 2023 Tesla Model S with a 2023 BMW M3 Sedan:

In the example above, based on the default parameters (you can pick the car models you are interested in, and also customize fuel and electricity prices, and driven miles per year), the Tesla Model S electric car can save you about $2,900/year in fuel compared to a conventional gas car like the BMW M3 sedan. Not bad!

4. Maintenance and Repairs

EVs have fewer moving parts and fluids to change, greatly reducing the cost of upkeep. Here’s what you can expect regarding the maintenance of an electric car:

• No need for oil changes.
• Reduced mechanical maintenance: simpler transmission, no alternator, and fewer moving parts in general.
• Brakes last longer thanks to regenerative braking.
• No air or fuel filters to change
• No spark plug replacements
• No exhaust system repairs

Altogether, maintaining an electric car costs about half as much compared to a gas vehicle and you can expect around $3,000 in savings over the car’s lifetime.

I also wrote a much more detailed guide about the maintenance of electric cars, available here.

Expensive Out-of-Warranty Repairs

EVs require little standard maintenance. But battery pack failures after 8-10 years can be very costly, often exceeding $5,000. An extended warranty helps ease this concern for buyers keeping the car long-term.

5. Insurance Costs

In the past, insuring an electric vehicle was often more expensive compared to a similar gas-powered model. This was due to several factors related to EVs being an emerging technology. This was because:

• Insurers had limited historical data on electric vehicles to accurately assess risk and repair costs.
• Replacement parts were more expensive and repairs often took longer due to supply chain issues and lack of available experts in EV technology.
• High cost of replacing damaged batteries.

However, as EVs become more mainstream, insurance costs have been dropping. Insurers now have more data on real-world EV accident rates and repair expenses. Parts are more readily available, bringing down replacement costs. Various businesses often provide price reductions when individuals insure multiple electric vehicles.

While rates can still vary between insurers, the gap in premiums for electric vs gas vehicles is narrowing. In some specific cases, insuring an EV may even cost less than insuring a conventional gas car.

Carefully shopping around can find very competitive EV insurance pricing. And the fuel and maintenance savings still make EVs a savvy long-term investment.

6. Resale Value

The rapid pace of technological change has led to quicker depreciation for EVs compared to gas cars. If you plan to sell within 5 years, resale value is something to consider.

Several key factors determine the resale value of electric vehicles:

• Brand reputation – Well-known brands like Tesla tend to hold value better.
• Battery health – Condition and capacity greatly affect resale pricing.
• Mileage and age – Lower miles and newer model years retain more value.
• Incentives – Expired tax credits can lower resale value.
• Charging infrastructure – More charging stations increase EV usability and value.

While resale values are stabilizing as the EV market matures, electric vehicles remain a smart long-term investment for many buyers focused on lower operating costs and reduced environmental impact.

Environmental Benefits

According to the U.S. Environmental Protection Agency (EPA), the greenhouse gas emissions associated with an electric vehicle over its lifetime are typically lower than those from an average gasoline-powered vehicle, even when accounting for manufacturing.

It’s essential to consider the environmental impact of producing electric cars, which require the use of rare metals and other materials that are not environmentally friendly to mine.

However, while manufacturing and end-of-life emissions are higher for electric cars, total lifetime emissions are still lower compared to a gas car. However, this will depend on many factors, like the size of the EV battery, and annual mileage.

In addition, it is likely that the emissions of electric cars will drop further in the future, as new methods to recycle the batteries will be developed.

Overall, electric cars can reduce our dependence on fossil fuels, especially if recharged using renewable energy sources like solar, wind, and others.

No Tailpipe Pollutants

Electric motors emit zero direct emissions while driving, while a traditional gasoline engine emits greenhouse gases and air pollutants right from the tailpipe. In areas with poor air quality, widespread EV adoption can significantly improve public health.

I wrote a much more detailed blog post about the pros and cons of electric cars on the environment. Check it out!

Performance and Driving Experience in an EV

Driving an electric car is a very pleasant experience because of its exceptional performance and quiet ride!

1. Acceleration and Handling

The instant torque provided by electric motors allows EVs to accelerate briskly – some can go 0 to 60 mph in just a few seconds! The low center of gravity from the underfloor battery pack also enhances handling and cornering.

Many reviewers note that electric cars are simply fun to drive. You get a responsive, powerful, and smooth driving experience without the noise and vibration of a combustion engine.

2. Cabin Tech and Features

With advanced digital displays and cutting-edge tech built-in, electric vehicles often provide a first-class driver experience. Over-the-air software updates keep your EV feeling fresh, without having to visit a dealer.

Some electric cars even feature video game-style dashboards and partially automated driver assistance features. Their cabins feel futuristic compared to gas models.

3. Quiet and Calm Ride

The near-silent electric motor makes for a uniquely peaceful ride. Without loud engine noise, you can better enjoy conversations or music. Long road trips are easier on the ears and less fatiguing in an EV.

Many electric cars pump simulated sounds through the speakers to alert pedestrians. But otherwise, the cabin remains blissfully quiet.

Charging Considerations and Infrastructure

As electric cars can’t really charge themselves while driving, charging is one of the main points of concern for prospective electric car buyers. However, the charging infrastructure is improving and will only get better in the coming years.

Let’s dive deeper into this extremely important topic!

1. Home Charging

Installing a home charger provides the ultimate convenience – just plug it in overnight and wake up to a full “tank” every morning.

Most EV owners do over 80% of charging at home. A typical EV battery takes 10-12 hours to charge fully on a Level 2 (240V) home charger.

2. Public Charging Infrastructure

The public charging network has expanded rapidly in the last few years. According to the White House, there are now over 130,000 stations in the US. Moreover, apps like PlugShare help you locate nearby stations.

DC fast chargers can add 100+ miles of range in 15-30 minutes. While not quite as fast as filling up at a gas pump, fast charging makes long-distance trips very feasible.

3. Workplace Charging

Many organizations provide charging for employees who drive EVs. Workplace charging makes it even easier to ensure you’re fully charged up each day.

4. Charging Rates and Costs

According to the Department of Energy, home charging in the United States costs between $0.02-$0.25 per kWh, averaging around $0.12 nationally. With an efficient EV model, that translates to $0.04 per mile driven.

Public DC fast charging typically costs $0.25-$0.45 per kWh. The exact rates vary significantly based on location. Apps like Chargeway display rates to help you find the cheapest charging stations.

You can also estimate the cost of charging your electric car using this calculator. This takes into account your car model, the usage, and in which state you live.

Government Incentives for Electric Vehicles

1. Federal Tax Credit

As mentioned earlier, there is a federal income tax credit of up to $7,500 is available for qualifying new EV purchases. The credit amount phases out after an automaker sells over 200,000 EVs. Tesla and GM tax credits ended in 2022.

Here’s a guide explaining how the tax credit system works and to which model and car make they apply.

2. State and Local Incentives

Many state and local governments offer additional incentives, such as:

• Cash rebates of up to $2,000 on EV purchases
• Tax credits for home charger installation
• Reduced registration/permit fees
• Access to HOV or toll lanes

The incentives available to you depend on your state and location, so be sure to research what’s offered in your region.

Which Electric Cars Offer the Best Value in 2023?

With many new EV models hitting the market, it can be hard to decide which offers the best combination of features and value. Based on my expert analysis, here are my top picks:

Best Overall – Kia EV6

With a starting price over $40,000, an estimated 300 miles of range, and ultra-fast charging, the Kia EV6 strikes an excellent balance of affordability, performance, and long-distance travel capabilities. The Federal tax credit makes it even more attractive.

Best Luxury Model – Polestar 2

The Polestar 2 from Volvo’s EV brand provides upscale amenities like vegan interior materials and advanced driver aids. All-wheel drive and 292 miles of range make it usable anytime.

Best Off-Road EV – Rivian R1T

The Rivian R1T pickup truck is the one of the best electric trucks and is capable of serious off-roading thanks to its quad-motor AWD. A max 400 miles of range and Rivian’s fast charging network make it road trip ready.

Best Affordable Option – Chevrolet Bolt

The Chevy Bolt can be had for around $27,495, making it one of the most affordable EVs with 259 miles of range. The spacious interior provides good utility for the price.

The Chevrolet Bolt EV also scored first in my rankings of the best electric cars under 30k in 2023. If you are on a budget, you should definitely check my full article for more options!

FAQ

How long do electric car batteries last?

The average EV battery retains over 90% of its capacity after 10 years and 200,000 miles. Certain battery systems are engineered to surpass the vehicle’s operational lifespan. Manufacturers typically provide at least an 8-year / 100k-mile warranty.

How long does it take to charge an electric car?

Using a 240V Level 2 charger, it takes 10-12 hours to charge an electric car from 0 to 100%. With a DC Fast Charger, you can add 100+ miles of charge in 15-45 minutes.

Can an electric car drive long distances?

Yes, most EVs today can comfortably travel 200-300 miles on a single charge. And with fast chargers spaced along major highways, you can drive an EV across the country much like a gas vehicle, just stopping slightly more often.

Do you pay road taxes if you own an EV?

Yes, electric car owners still pay registration, licensing, and other taxes that go towards road maintenance, even if they don’t pay any fuel tax. Some states collect additional fees at the time of registration to make up for the lost gas tax revenue.

Should I buy or lease an electric car?

Buying is better if you plan to keep the EV long-term and can take advantage of the lower operating costs. Leasing may make sense if you are unsure about making a long-term EV commitment and prefer to have a new car in 3 years.

Conclusion

Are electric cars worth it? For the typical driver, an electric vehicle can absolutely be worth the investment in 2023 and save money over the long run. Lower operating costs will offset the higher upfront prices over 5-7 years of ownership. Performance and low maintenance requirements make them enjoyable to own and drive as well.

However, carefully consider your driving habits before making the switch. If you take frequent long trips and rely heavily on public charging, owning an EV may not be practical yet. But for most who charge at home daily and want an eco-friendly vehicle with the latest tech, going electric is likely the best choice available today.

As charging networks continue to grow and more models enter the market, electric cars will become appealing to more and more consumers in the coming years. But savvy buyers can already take advantage of their benefits and cost savings today.

So, are electric cars worth it for you? If you prioritize low maintenance, high performance, fuel savings, and reducing environmental impact, an EV can be a sound investment that saves money over time. I hope that this comprehensive guide helped you to understand if making the switch to an electric car is the right choice for you!

You may also be interested in reading:

• Are Hybrid Cars Worth It In?
• Pros And Cons Of Hybrid Cars (AVOID A Costly Mistake!)