Electric Vehicle Cost Goes Beyond the Purchase Price

The costs that go into owning an electric vehicle are similar to the cost of owning a gas-powered vehicle. In addition to the upfront purchase price, you should factor in expenses like insurance, fuel and routine servicing.

When you estimate the cost of owning any vehicle, variables like how much you drive, where you live and whether you finance will affect your overall cost. For example, whether you use electricity or gasoline to fuel a car, your ongoing costs to power your vehicle will vary depending on where you live and drive.

At the same time, there are some distinct differences to consider when figuring the total cost of EV ownership, one being where and how you will be charging your vehicle. The following guide provides a framework and questions to ask to help you estimate the monthly and three-year cost of owning an EV for your particular situation.

Variables to consider:

• What make and model of EV will you buy? 

• Will you buy a new or used EV?

• Will you finance, lease or pay cash? 

• Will you qualify for tax credits or incentives?

Your biggest expense will be what you will pay to purchase an EV. According to online pricing guide Kelley Blue Book, the average price paid for a new electric vehicle in March 2024 was $54,021. This was a year-over-year decrease of 9.7%.

But new electric vehicle prices vary greatly, from EV models that cost less than $40,000 to luxury models costing more than $100,000 before any incentives or tax credits are applied.

If you’re thinking of buying a used EV, a February 2024 iSeeCars study lists the average used EV price as $30,904, a year-over-year decrease of 31.8%. Whether you intend to buy a new or used EV, online pricing guides like Kelley Blue Book, J.D. Power or Edmunds can help you find the average price paid for the type of EV you want to purchase.

Once you have an idea of price, research any possible discounts. You could qualify for a federal EV tax credit of up to $7,500 for a new vehicle and up to $4,000 for a used one. Depending on the dealership where you buy the vehicle, you may be able to knock the tax credit off the upfront cost. In addition, you might be able to reduce your purchase price with EV incentives offered by your electric company or your state or local government. Also, look for auto deals and incentives being offered by the manufacturer, since these often include EVs.

Finally, unless you pay cash, you’ll need to include the cost of interest for financing or leasing. If you’re financing, check average auto loan interest rates online or apply to lenders that will show you pre-qualified rate estimates using a soft credit check. Input that rate into an auto loan calculator, along with loan term, to see a monthly payment amount that includes interest. If you’ll be leasing, you can use a car lease calculator to estimate the payment with interest.

Variables to consider:

• Where will you be doing most of your charging? 

• What is the cost of electricity where you’ll be charging? 

• Does your electric company offer any incentives or discounts? 

To help estimate charging costs, think in terms of upfront costs — like any equipment you’ll need — and the ongoing cost of electricity itself.

Charging equipment and installation

The speed at which you want to charge will determine whether you need to invest in equipment to start. Will you be OK with slower Level 1 charging that adds about 5 miles of range per hour, or will you want Level 2 charging that adds about 25 miles of range per hour?

Most new EVs come with a Level 1 charger which can be used with a regular electrical outlet. So if you’re fine with slower charging and being plugged in most of the time, you won’t need to budget for this expense.

However, some EV manufacturers, like Tesla, don’t include charging equipment with the purchase of the car. So if you want Level 2 charging and don’t receive the equipment, you’ll have to purchase it at a cost of about $500 or more. While this is a small amount in the bigger picture, it’s still a cost you may want to include.

If you plan to use Level 2 charging at your home, you’ll most likely have to hire a qualified electrician to install a 240-volt outlet to handle the faster charging, which can cost a couple hundred dollars or more. According to the U.S Department of Energy, adding a Level 2 charger to your home will cost about $1,300, although you might be able to include it in your vehicle financing and pay it over time.

To help reduce upfront expenses, look for state and electric company EV incentives that offset the cost of charger installation. In addition, some auto manufacturers run promotions that include a Level 2 charger and credit toward installation when you purchase their EVs.

Figuring electricity costs

To estimate electricity costs for charging an EV, you’ll need to know where you’ll be doing most of your charging.

For at-home charging gather these three pieces of information:

1. Your EV’s estimate for kWhs used per 100 miles. You can find this on the Department of Energy's website or the EV window sticker expressed as kWh/100 miles. A realistic average to use is 35 kWh/100 miles, according to EnergySage, a DOE-supported company that helps consumers research clean energy solutions, including EVs.

2. The number of miles you typically drive monthly. According to the Federal Highway Administration, the annual average is 13,476 or about 1,100 per month.

3. Your home electricity rate per kilowatt hour (kWh). The rate may be listed on your electric bill. If not, divide your total electric bill amount by the number of kilowatt-hours you used to get the price you pay per kWh. It’s also a good idea to check with your electric company to see if they offer a reduced rate if you charge during off-peak hours. According to the U.S. Bureau of Labor Statistics, the national average is about 17 cents per kWh.

Here’s a formula (using the averages listed above) to arrive at monthly at-home charging cost. You can plug in your own numbers.

• 35 kWh/100 miles means you will need 0.35 kWhs for every mile you drive.

• 0.35 X 1,100 (average monthly miles driven) = 385 kWhs needed monthly.

• 385 X 0.17 (national average of 17 cents per KWH) = $65.45 for monthly EV charging.

If you’ll be using a public or semi-public charger — or a combination of at-home and public — fuel costs can be more difficult to predict. That’s because public charger prices and the way your total payment is calculated varies by location. For example some charge by the kilowatt-hour and others by minute of use. You might also be able to pay a membership fee to get reduced pricing.

If you know what public charger you’ll be using, you can research its cost ahead of time. Public charging networks like Electrify America, ChargePoint or EVgo have maps and location pricing in their apps. If you plan to use a charging station at work, your condo or a business you frequent, inquire about pricing — some may be free.

» MORE: Electric cars vs. gas cars: what to know before buying

Variables to consider:

• What’s your specific EV’s maintenance schedule? 

• What’s the cost for various services and maintenance in your area?

Electric vehicle maintenance costs are generally lower than gas-powered cars. Without a gasoline engine, you won’t have as many moving parts to break, and you can say goodbye to some expenses like oil changes. Still, EV’s aren’t totally maintenance-free. You’ll still have tasks like rotating the tires or replacing wiper or brake fluids. Most auto manufacturers have owner’s manuals available on their websites, so you can find your particular EV’s service and maintenance schedule and apply rough estimates to that. If that’s too much trouble, you could take a more general approach and use the average EV maintenance cost of 8.12 cents per mile from AAA’s 2023 Your Driving Costs study.

As with any vehicle, you’ll have maintenance and possibly repair costs that aren’t routine. For example, some EV owners report that tires wear out quickly, possibly due to the EV’s weight. Also, replacing EV batteries can be expensive, but that’s likely something you won’t have to worry about early in ownership, especially with a new EV. Most carmakers provide EV battery warranty coverage that lasts at least eight years or 100,000 miles, and some car manufacturers offer more.

For the purpose of this guide, we aren’t including the cost of maintenance or repairs that aren’t routine, since these can be difficult to predict in advance.

Variables to consider:

• What state do you live in?

• Does your state offer credits or charge fees specifically for EVs?

Vehicle registration fees and taxes vary from state to state, so your best option is to get an estimate for the EV you plan to purchase directly from your local department of motor vehicles (DMV). Some DMV’s have calculators on their websites to provide an estimate.

Also, find out if your state has EV-specific credits or fees. According to the National Conference of State Legislatures, at least 32 states now have such fees ranging from $50 to $225 annually to replace lost gas-tax revenues.

Variables to consider:

• What make and model of EV will you be insuring? 

• Which insurance company will you use? 

As is the case with a gas-powered car, the make and model of EV you buy will impact your insurance cost. If you buy a new car with a bigger price tag and higher replacement cost, you can expect a higher insurance premium. Overall, since EVs have been more expensive cars with fewer trained technicians to handle repairs, insuring one has cost more. But, as more people drive them and prices come down, insurance premiums are expected to follow.

To estimate the insurance cost for the EV you’ll be buying, shop and compare auto insurance companies to find the best quote.

To help you estimate your total cost of ownership for an electric vehicle over three years, use this table as a guide and plug in your own numbers. Numbers can vary greatly based on your location, so this table is only for illustrative purposes.