Electric cars have emerged as a beacon of sustainability and innovation in the evolving automotive technology landscape. However, as with any significant investment, it’s crucial to look beyond the glossy exterior and zero-emission promises to understand the actual cost of ownership, which includes charging, maintenance, car insurance, etc. This comprehensive guide will delve into the often-overlooked expenses associated with electric vehicles (EVs), ensuring you’re fully informed before switching.
Electric Vehicle Statistics in Canada
According to recent data, around 120,000 electric vehicles were sold in Canada in 2023, a roughly 7% increase from 2022. The sales are expected to grow even more in 2024 to almost 140,000. So clearly, the demand for electric vehicles is on the rise. Furthermore,
The Canadian federal government has declared that by 2035, every new vehicle sold in Canada must be electric. Learn more about how electric vehicles are changing the Canadian car industry.
The key question of this article is whether electric vehicles are cost-effective and what unforeseen costs could arise from buying one.
Hidden Costs of Owning an Electric Car
While eco-friendly and innovative, electric cars come with several hidden costs that potential buyers should be aware of. Here’s a condensed list of these additional expenses:
- Luxury Features as Standard: Unlike traditional cars, electric vehicles (EVs) often come only in high trim levels with luxury features, leaving no option for a more basic, less expensive model. For instance, the electric Kia Soul comes with premium features as standard, unlike its gasoline counterpart, which offers multiple, less costly trims.
- Home Charging Infrastructure: Installing a home charging station, especially a level 2 charger, can require significant investment. Costs can range from $2,000 to $9,000, depending on the need for electrical upgrades.
- Tire & Brakes Maintenance Requirements: EVs don’t need oil changes, but they require regular maintenance, such as tire rotations and brake replacements. Electric cars also wear out tires faster due to weight and instant torque.
- Higher Insurance Premiums: Due to elevated costs for repairs and replacements, insuring electric cars can often be pricier. For example, an electric Ford F150 costs about $30,000 more than its gas counterpart, affecting insurance premiums.
- Purchase Price: On average, electric cars are more expensive than gas-powered vehicles, often by about $10,000. This is due to the novelty of EVs and the cost of materials for their batteries.
- Road Use Fees: Some regions charge electric vehicle drivers road use fees to compensate for the lack of gas tax revenue.
- Depreciation: Electric vehicles generally lose value quicker than their gas-powered counterparts, with up to a 60% depreciation in the initial five years.
- Repair Costs: Repairs for electric cars can be more expensive, as not all mechanics are trained in EV repairs, and parts like batteries cost more.
- Modifications & Add-Ons: Upgrading an electric car with new features or modifications can significantly increase its cost.
How Much Does It Cost to Charge an Electric Car in Ontario?
Charging an electric car can be more costly than expected, and it deserves to be discussed thoroughly:
- Home Charging: Its costs vary depending on electricity rates. EV owners should be ready for higher utility bills due to home charging. Installing a home EV charger can cost over $2,500, typically needing replacing every ten years. Additionally, if your home’s electrical system isn’t compatible with an EV charger, you’ll incur extra costs to upgrade it. Most homes have a 120-volt outlet for a Level 1 charger, which is slow, especially for daily drivers. A faster Level 2 charger may require a compatible electrical system upgrade.
- Public Charging: Public stations are generally more expensive. For example, charging a Kia Soul EV at home costs between $2.80 and $4.60 per 100km, while public chargers cost up to $9.60 per 100km.
Costs of Replacing Battery in Electric Vehicles
Contrary to common assumptions, electric vehicle batteries are significantly more expensive than standard car batteries, costing anywhere from $70 to $150. In contrast, the replacement costs of electric batteries range from $10,000 to $20,000. These batteries usually last for about 100,000 miles, so replacement may be necessary eventually, particularly for those who frequently take long trips. It’s advisable to avoid using DC chargers to extend battery life, as they can shorten battery lifespan.
How to Save Money on an Electric Vehicle: Key Strategies
- Hybrid/Electric Car Insurance Discount: Ask your insurance provider about discounts for hybrid or electric vehicles, which could lead to significant savings.
- Research EV Incentives: Explore financial incentives offered by municipal, provincial, or federal governments for driving an EV, like tax breaks or discounts. One such incentive is the Green License Plate Program.
- Utilize Free EV Charging Stations: Find and use free EV charging stations available in various locations, such as university campuses, hotels, and office buildings. Some manufacturers offer free charging plans for a period after purchase.
- Choose EVs with High Safety Ratings: Opt for an EV with a high safety rating to potentially qualify for lower car insurance rates. Here is our rating of the ten best electric vehicles in Canada.
- Charge During Off-Peak Hours: Charge your EV during off-peak hours to reduce electricity costs.
- Solar Panel Charging: If you have solar panels, use them to charge your EV for free. If not, consider the cost-benefit of installing solar panels.
- EVs with Long Battery Range: Choose an EV with a long battery range for more efficient use of electricity and longer travel per charge.
- High Deductible for Insurance: Opt for higher deductibles in your insurance policy to lower the premium costs. Remember, you can adjust your deductible at policy renewal if needed.
The Bottom Line
Owning an electric car is undoubtedly a step towards a more sustainable future. However, it’s essential to consider the hidden costs of this eco-friendly choice. From battery replacement to charging costs, insurance premiums, and depreciation, these factors play a crucial role in the total cost of ownership. With thorough knowledge, you can choose an option that matches both your ecological principles and financial situation.