Electric vehicles are expensive – but so, when you get right down to it, are many luxury vehicles built with internal combustion engines. In this guide, we’re going to look at the cost of electric cars, some of the options that have recently come onto the market, and what you can do to save some money when buying one.
What Makes Electric Cars So Expensive
Here are the things that have the biggest impact on the cost of electric vehicles.
Part #1: The Profit Margin
The biggest factor isn’t actually a part at all – it’s the profit for the manufacturer. Like all products, electric vehicles must have a profit above and beyond the price of their components. This is how developers get paid, factories get built, support networks get constructed, and the industry as a whole, functions in the first place.
While the actual profit margins can vary – and aren’t always published – it’s worth noting that Frank Lindenberg, Vice President of Finance and Controlling for Mercedes-Benz, indicated that their own electric cars had about half the profit margin of their internal combustion counterparts. However, this is certainly going to change over time – and he expects the profit margins to be largely equivalent by 2025.
Part #2: Drive Unit
The drive unit is the main replacement for the internal combustion engine. The complete unit features a motor, an inverter, a gearbox, the dash display, the control unit, the throttle pedal, and two axles. While you can’t operate a vehicle with just these part, everything else is ultimately built around them.
Part #3: Battery Packs
The prices of batteries are going down over time, but they easily remain one of the most expensive components of electric vehicles. These batteries need to have enough output to move the vehicle, enough capacity to let them travel a reasonable distance, and enough longevity to hold up to nightly recharging for many years.
All of that comes at a price. In 2010, the Nissan Leaf’s battery pack cost about $18,000 – practically the worth of a new car all by itself. Prices have come down since then – and are expected to continue doing so as advances are made – but they’re currently one of the biggest factors influencing the cost of electric cars.
For context, the Nissan Leaf’s battery that year cost about $750 per kilowatt hour. Electric vehicles are expected to be truly competitive when battery packs cost $100 per kilowatt hour (expected around 2030, although new advanced may shorten the timeframe).
Part #4: Production Lines
One of the most important things to know about modern production lines is that they’re more affordable to run when you’re making a lot of parts. Actually, running the production line isn’t as expensive as designing it and setting it up.
However, each production line is only going to operate for so long. New versions of cars often require entirely new lines for parts, so if the manufacturer can’t keep using things, costs go significantly up. This is less of a problem for larger manufacturers, who sell enough vehicles to more than recoup the cost of running (and modifying) so many lines.
What Do Electric Vehicles Actually Cost?
As with most vehicles, the price for electric vehicles varies widely. Here are some of the costs for 2017 models, as well as the features that set them apart from the competition. Note that all prices are before incentives, which can significantly reduce the real price of each car.
2017 Mitsubishi i-MiEV – $23,845
Well into the budget of most families, Mitsubishi’s i-MiEV is quite possibly the cheapest electric car you’ll find… but it’s not practical for most people. Offering just 59 miles on a single charge (barely enough for a one-way trip in many cases), the limited performance and space make this a bad choice in most situations. The hassle of the short range honestly isn’t worth any savings from switching to electric.
2017 Ford Focus Electric – $29,995
The Ford Focus is among the most affordable – but least capable – of the electric cars on the market. Historically, it’s been treated as a “compliance car” intended mainly to meet California’s zero emission standards. With a 33.5 kWh battery, the 2017 Ford Focus has a whole 115-mile range on a full charge (about one-half to one-quarter of what many Internal Combustion competitors can achieve).
While this vehicle comes with basic features – backup cameras, parking sensors, heated seats, and the like – there’s really nothing that’s not expected from a car in this price range.
2017 Fiat 500e – $32,780
Much like the Ford Focus, Fiat’s 500e is more of a compliance vehicle than something companies truly want to sell. (Indeed, Fiat SEO Sergio Marchionne once remarked that he actively hoped people wouldn’t buy it.)
Despite that, it’s a zippy little vehicle that can go from 0 to 60 in 8.4 seconds – a very reasonable time. However, its 111-horsepower engine and 24 kWh battery pack only give it 84 miles on a full charge. Worse, recharging takes a full day with a standard 120-volt household outlet. All in all, not a great value for the price, especially with the lack of room for passengers or cargo.
2017 Chevrolet Bolt EV – $37,495
This is the point where electric vehicles are starting to get genuinely good. Chevrolet’s sporty Bolt has a 60-kWh battery and an impressive 238-mile range on a single charge. That’s still not as good as some modern Internal Combustion vehicles, but it’s more than enough for most daily driving.
This vehicle can go from 0 to 60 in 6.5 seconds and has a reasonable 17 cubic feet of cargo volume. More helpfully, the Bolt helps drivers get used to driving an electric vehicle by providing a minimum, maximum, and estimated range.
Range anxiety (the fear of running out of battery power and being stranded – and understandable given the short battery lives of smartphones these days) is one of the key factors holding back the adoption of electric vehicles, and anything that helps alleviate this is good for the industry.
2017 Tesla Model S – $69,200 to $135,700
Offering one of the widest price ranges of any consumer vehicle, Tesla manufactures the iconic electric vehicles – and their features show. Offering up to 315 miles on a single charge and going from 0 to 60 in just 2.4 seconds (assuming you’ve applied the correct updates), Tesla Model S offers power, performance, and incredible flexibility.
When you’re trying to figure out ‘How much is a Tesla?’, a significant part depends on the configuration. Regardless, they’re more expensive than pretty much anything else on the market. It’s worth noting that the battery pack is estimated to cost around $20,000 all by itself – just a little under what Mitsubishi is asking for their entire vehicle. That’s not including the profit margin the company needs, which is a major part of the Tesla cost issue.
In short, as with every vehicle, performance comes at a very real price. That price is coming down over time, but there’s a hard limit on how low costs can go to get a certain level of performance.
Getting The Best Deal On Electric Cars For Sale
Despite the sticker price, the cost of electric cars isn’t as bad as it looks at first. Here are some ways to reduce the cost aside from looking at the cheapest electric cars for sale.
Method #1: Incentives
While incentives for buying certain types of vehicles change over time, you can usually find something to bring the price down. Plugin Cars offers an excellent list of incentives right here, and it’s worth reading over these options before you even contact the dealership to show your interest.
Note that some incentives are time or volume-limited, so if you wait too long to buy, you may not be able to take advantage of them.
Method #2: Advantageous Loans
If you’re not buying your vehicle outright, you may be able to get good lending terms from a bank or credit union. Many of them have special programs for loans on “green” products like solar panels and electric vehicles, and these could cut your interest rate by half a percent or more.
If you’re really gutsy, you can find a good program from your current bank’s competitor and ask if they’d be willing to match (or beat) the rate so they can keep getting your business. There’s no guarantee of success, but if it works, you may be able to save hundreds of dollars.
Method #3: Charging At Night
Electricity costs vary throughout the day, with the middle of the day generally being the most expensive and just after midnight being the most affordable. If your car can charge quickly – about 4 hours – then you may be able to configure it to start charging when prices hit their lowest point. Aside from being easier on the energy grid, this helps to drastically reduce the ownership cost of electric cars.
Always charge at night if you can – and don’t be afraid to lean on manufacturers a little to ensure they make it easier for you to do.