When many people think of an electric car, they think of the high-end Tesla Model S with a purchase price of $89,990 for a long-range model. However, you can purchase an EV for about the same price as a regular car, or what some EV owners call an “ICE” (internal combustion engine) vehicle. After you factor in rebates and tax incentives, along with gas savings and reduced maintenance costs, an electric vehicle could be the financially savvy choice — plus, you’ll help contribute to sustainability by mitigating climate change.
Let’s take a look at what rebates are available, what could be coming under President Biden’s initiatives and actual costs of an EV as opposed to an ICE car:
Federal Rebates and Tax Credits on Electric Vehicles
First, let’s explore the tax credits available to anyone purchasing an EV, with a few caveats. The federal tax credit of up to $7,500 only applies to autos made by manufacturers who have sold fewer than 200,000 plug-in EVs in the U.S., which excludes General Motors and Tesla. In 2020 alone, Tesla sold 96,000 Model 3 cars, according to Statista, making it the most popular EV in the U.S.
However, Biden has proposed extending and increasing the tax credit through 2022 and making it available to any EVs sold in the U.S. once again, according to the U.S Department of Energy.
State Tax Credits
Currently, nine U.S. states offer tax rebates for electric vehicles, ranging from California’s generous maximum incentive of $7,000 to Pennsylvania’s credit of up to $1,750, according to Treehugger, which recently broke down the total-cost-of-ownership for an EV vs. a gas-powered car.
Comparing Two Vehicles
To compare pricing, we evaluated the costs of two Nissan vehicles of around the same size: The 2022 Nissan Kicks compact SUV — which gets 36 mpg on the highway — and the Nissan LEAF — with an EPA-estimated range of 226 miles on a full charge. Both vehicles seat five adults and have comparable cargo capacity, boasting that you can fit a full-size bicycle in the rear with the seats down.
The Nissan LEAF S EV starts at $27,400, while the Kicks starts at $19,550. If you deduct the $7,500 federal tax credit, the LEAF is almost the same price as the Kicks, coming in at $19,900. Let’s assume you don’t live in a state with EV rebates, and your local utility company also doesn’t offer savings, since the majority of states do not provide tax credits right now.
Energy Costs for an EV vs. a Gas-Powered Car
Now let’s get into where most people start to think about the savings on an EV. The EPA’s Fuel Economy Guide for Model Year 2021 estimated annual fuel costs at $2,077.02, Treehugger says. The price to charge an EV adds up to $667.50 per year, calculating an eGallon price at $1.16, according to Treehugger.
The Department of Energy estimates were even more favorable, however. The DOE reported this May that it costs approximately 60% less to power an EV than an ICE vehicle. Savings, of course, vary based on your region.
If you use solar panels to provide clean electricity for your home — and make attempts to charge your EV mostly from your home charger — you can achieve even greater savings by reducing the cost of your electric.
Total Cost of Ownership
Consumer Reports quotes the price of maintenance per mile for an EV at $0.03, while it costs an average of $0.06 per mile to maintain an ICE car, which includes more moving parts. Between the gas savings and the maintenance savings on EVs, even when you don’t factor in the federal tax credits, you’re likely to save money over time.
Of course, the savings you’ll see depend on the make and model car you choose, how much you drive, where you charge or fill up, insurance costs, as well as your state and local incentives. Run the numbers carefully but, ultimately, choose the vehicle that fits your lifestyle. If you are concerned about sustainability and reducing your family’s carbon footprint, driving an EV could be an important step.
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Last updated: August 9, 2021
This article originally appeared on GOBankingRates.com: How Much It Costs To Buy an Electric Car — Could Rebates Make It Worthwhile?