- Seventy-one percent of U.S. drivers would consider buying an electric vehicle in the future.
- No need for gas, lower cost of ownership and financial incentives are some reasons to consider EVs.
- Performance in extreme weather and high replacement battery costs are two reasons to be wary of EVs.
Little more than a punch line not too long ago, electric cars have rapidly become major players in the automotive industry and many Americans’ daily lives (and investment portfolios). Consider some facts:
Around 9 percent of cars sold worldwide last year (2021) were electric—up from just 2.5 percent in 2019. That number is expected to hit 58 percent by 2040, according to Bloomberg New Energy Finance.
Last year, Ford and a South Korea-based energy company announced an $11.4 billion investment to build manufacturing campuses for electric vehicles—Ford’s largest-ever single manufacturing investment in the company’s history.
Seventy-one percent of U.S. drivers would consider buying an EV in the future, while one–third of the respondents said an EV would be their next car purchase, according to Consumer Reports.
In short, if you haven’t seen lots of EVs on the road yet, chances are you soon will.
The question, then, is this: Should you join the growing ranks of EV owners? The fact is, EVs come with plenty of pros and cons—including some benefits you might not have considered and some downsides that may surprise you.
Types of EVs
Any research into EVs should start with an understanding of the landscape. Several types of EVs currently exist—and given the dynamic nature of the industry, it’s likely that new types will come into play at some point. For now, major varieties include:
- Hybrids. Conventional hybrids—think the Toyota Prius—rely on a gas engine with some help from an electric battery. Therefore, they can’t operate on electricity alone—but they do tend to use less gas than a standard car.
- Plug-in hybrids. PHEVs—plug-in hybrid electric vehicles—are a big step closer to completely electric vehicles, because they can drive significant distances on just electric power. When the battery charge runs out, a gas-powered engine kicks in—allowing you to travel longer distances without stopping to charge the battery or worrying whether you can make it to a charging station to plug in. However, short and local trips around town can probably be done entirely on the car’s electric power—possibly eliminating trips to the gas station for weeks or months, depending on your driving habits.
- Battery electric. BEVs—battery electric vehicles, such as the seemingly ubiquitous Tesla Model 3—feature a large battery wired to one or more electric drive motors. Because they have no gas engine at all, BEVs give off no emissions. Instead, they rely entirely on their batteries, which must be charged regularly (either at home or on the road at charging stations). Oh, and they’re fast: A Tesla Roadster will go from 0 to 60 in 1.9 seconds, versus 2.8 to 2.9 seconds with a Ferrari or Lamborghini.
Reasons to like EVs
There’s a lot to like about EVs, including some benefits that don’t always get fully appreciated. Some of the key reasons you might want to consider going fully or partially electric include:
- No more gas—or less of it. On average, we spend more than $1,100 on gas annually—an expense you can greatly reduce or eliminate, depending on which type of EV you drive. Burning less gas also means fewer tailpipe emissions: Internal combustion engines create 1.2 to 1.6 times more CO2 than do battery-powered electric cars. Indeed, driving an electric car is better for the environment in 95 percent of the world, according to researchers from the University of Cambridge, the University of Exeter and Radboud University in the Netherlands.
- Lower cost of ownership. In addition to requiring fewer (or no) trips to the pump, EVs generally cost less to maintain than do traditional vehicles. For example, a fully electric car doesn’t need oil for its engine. Also, electric motors have a small number of moving parts versus their gas-fueled peers. Those are two reasons why the cost of maintenance for battery electric vehicles is 6.1 cents per mile, versus 10.1 cents for comparable light-duty gas vehicles, according to the U.S. Office of Energy Efficiency and Renewable Energy. A Consumer Reports study found even better results: The average electric vehicle driver will spend 60 percent less to power the car, truck or SUV and half as much on repairs and maintenance when compared with the average owner of a gas-powered vehicle.
- Long-distance capabilities. Improvements in EV technology mean drivers can go increasingly long distances on a charge. Every EV and PHEV has an official electric range rating from the EPA estimating how long the vehicle can drive on electricity alone before the battery is depleted. Expect a plug-in hybrid to generally have lower electric ranges than do battery electrics, because they have less space dedicated to their battery packs. Recent range ratings on some popular or noteworthy EVs include:
- Tesla Model 3 RWD: 272 miles
- Nissan Leaf (62 kilowatt-hour battery pack): 226 miles
- Hyundai Kona Electric: 258 miles
- Audi E-tron Quattro: 222 miles
- Porsche Taycan 4S Cross Turismo: 215 miles
- Lucid Air Dream Edition Range: 520 miles
Bonus: The cost of the electric batteries powering EVs is falling, which should lead to continued advances in the miles per charge.
- Tax credits and other incentives. The federal government and many state governments have been seeking to incentivize car buyers with tax credits and cash in an effort to boost the use of electric vehicles. Recently, for example, the federal government offered a $7,500 tax credit to EV buyers. Note that there are rules and limits around that credit, so be sure to ask if a specific EV you’re considering is eligible. Additionally, some states, cities and even utility companies are offering incentives for buying EVs or installing at-home car chargers. In California, for example, the state’s Clean Vehicle Rebate Project could potentially knock a few thousand dollars off the cost of an EV.
- A growing number of choices. As you’d expect, rising interest in EVs is prompting automakers to offer more and more EV options in their lineups at various price points. There’s Tesla, of course, and entry-level options from the likes of Mini and Hyundai. But a growing number of high-end EV sedans and SUVs are also being produced by BMW, Porsche, Audi and other marquee names. In fact, Porsche’s Taycan (an electric sedan) outsold the famous 911 last year, while Mercedes-Benz sold nearly 100,000 electric cars and vans in 2021—a 90 percent increase from the previous year. In addition, new startups—such as Rivian and Lucid Motors (best known as a battery maker for Formula E race cars)—have entered the game, producing super-luxury EVs. The upshot: If you want an EV made by a particular car company or with specific features, chances are you can find one.
Some EV issues to consider
That said, EVs are not great options for all drivers out there—nor are they magical, environmentally pristine vehicles. Consider some of the potential downsides of EVs so you can make a clear-eyed decision:
- Charging concerns. EVs need to be recharged as their batteries run out of juice, of course, but electric charging stations aren’t yet nearly as easy to find as gas stations. That can create so-called range anxiety. Approximately 57 percent of consumers avoid EVs because they worry about running out of charge without being able to access a charging station. And if you do need to charge up while on the road, it could take one to three hours (or even longer) depending on your particular EV and the condition of the charging station. (For this reason, many EV owners install home chargers in their garages—another expense.)
There is good news on this front, however. The number of public charging stations has soared from around 7,300 in 2014 to approximately 46,000 recently—with California leading the way. What’s more, Tesla announced that it intends to allow non-Tesla EV drivers to access its proprietary Supercharger network of charging stations (more than 1,200 in the United States) known for their ability to rapidly charge EV batteries.
- Extreme weather inefficiencies. Should you get an EV if you live in an area with extreme weather conditions—say, brutally hot summers and frigid, snowy winters? It’s a question worth asking, because EV batteries need to work harder the more the ambient temperature diverges from the mid-70s. Testing five EVs in mixed-use driving with the HVAC systems running, AAA found that, on average, range dropped by 41 percent when the temperature fell from 75 degrees to 20. At 95 degrees, range was reduced by 17 percent compared with the 75-degree baseline. (Other factors that can impact range include the hilliness of your driving area and whether you have heavy accessories, such as roof racks, mounted on your car.)
- Costly replacement batteries. Apart from losing their charges temporarily, EV batteries also eventually die completely—and that deterioration can speed up in extreme climates. The good news is that most automakers warranty their packs for eight years and 100,000 miles. The bad news is that battery replacement costs might set you back anywhere from around $6,000 to approximately $20,000 or more, depending on the model.
- EVs’ environmental impact. If you think EVs are carbon neutral or free from issues that negatively impact the environment, think again. Yes, EVs may have no tailpipe emissions—but the electrical energy used to drive them and recharge them may be generated by fossil-fuel-consuming, CO2-emitting power plants. What’s more, the production of the lithium-ion batteries may create significantly more carbon dioxide than is generated when internal combustion engines are made. A lot of the math depends on the power source (coal versus solar or wind) of the specific grid tapped by the manufacturing plant, as well as by the end user when charging the car.
Then there are the batteries themselves: The cells that power most electric vehicles rely on cobalt, lithium and other raw materials that have been linked to environmental and human rights issues. And when it’s time to recycle spent EV batteries, the process can potentially use large amounts of water or create air pollution.
That said, the consensus seems to be that over time, driving EVs leaves less of a footprint than does driving standard vehicles. Last year, Car and Driver reported that “the life-cycle emissions of a small gas car will surpass those of a small EV after roughly 27,000 miles of driving” and that “even the largest EVs should pull even with their gas counterparts by 60,000 miles.” Just don’t assume you’re “leaving no trace” with your EV.
- Insurance. In general, electric cars carry higher insurance coverage rates than their gas-consuming peers. EVs typically cost more, can be damaged more easily and are more expensive to fix.
If you plan to ever buy another car in your lifetime, you should be ready to consider whether that new purchase should be an EV.
VFO Inner Circle Special Report
By John J. Bowen Jr.
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