(NewsNation) — As automakers shift their focus to electric vehicles, prices are falling, but it could still be a few years before EVs are less expensive than comparable gas-powered cars at the dealership.
In July, new EVs sold for $53,469 on average — down almost 20% from June 2022, according to Kelley Blue Book. By comparison, the average transaction price across all new vehicles was $48,334 last month.
For now, new EVs are still priced similarly to luxury cars, said Brian Moody, executive editor for Kelley Blue Book. However, he expects the upfront cost to make more sense over the next three years, depending on the type of car people are looking for.
“There’s plenty of people buying $50,000 SUVs right now,” he said. “If you’re okay getting a slightly smaller car and you’re going to save all that money on maintenance and fuel, [an EV] may end up making sense to you.”
Today, those looking to get the best possible value are still probably better off with a fuel-efficient hybrid, Moody said.
But that could soon change. EV buyers can already expect to save more on fuel and maintenance over the lifetime of the vehicle, multiple analyses have found. Here’s how some of those prices currently break down.
EVs cost more upfront, but the gap is shrinking
Both new and used electric vehicles are generally more expensive than internal-combustion engine cars, but the margin has narrowed.
Amid growing EV inventory and increased competition among automakers, new EV prices have fallen more than 12% since January. Moody expects those prices will continue to decline.
“The price of the cars will go down because there’s going to be more of them and when there’s more of them, [automakers] have to compete on value, performance, longevity, reliability,” he said.
For now, Americans are paying about 10% more upfront for a new EV. The average listing price is about 20% higher for used EVs, although that difference has also shrunk over the past year, according to ISeeCars.com.
Fuel vs. electricity costs
In general, charging an EV is cheaper than fueling a gas-powered car on a per-mile basis, but the one-to-one comparison depends on where you live since gas and electricity prices vary from state to state.
Also, buyers will need to take into account other costs related to charging. EV owners may charge up at home, at work, or at public charging stations, which tend to be more expensive. They may also choose to invest in at-home charging systems that can cost over a thousand dollars.
A recent analysis by the Washington Post found EV pickup truck drivers save anywhere between $50 and $80 per comparable fill-up across much of the Western United States. EV drivers in the Northeast can expect to save less, closer to $20 per fill-up, the Post found.
Over the course of a year, consumers save roughly $700 for an electric SUV or sedan and up to $1,000 for an EV pickup, the Post reported.
Earlier this year, Consumer Reports compared multiple car models across three states and found most of the EVs analyzed had lower energy costs.
The U.S. Department of Energy has created a fuel comparison tool for individuals looking for specific data on different models.
Here’s how fuel for a Ford F-150 compares to a Ford F-150 Lightning in California, according to the DOE’s tool:
- 2023 Ford F150 Pickup 4WD (6cyl 2.7L Automatic)
- Annual miles driven: 13,500 (50% city and 50% highway)
- Annual fuel use: 690 gallons at $5.28 per gal
- Total annual fuel cost: $3,652
- Ford F-150 Lightning
- Annual miles driven: 13,500 (50% city and 50% highway)
- Annual electricity use: 6,322 kWh
- Total annual electricity cost: $1,445
In Massachusetts, here is how much a driver could expect to spend on energy for a 2023 Hyundai Kona compared to its electric counterpart, according to the DOE’s fuel comparison tool:
- 2023 2023 Hyundai Kona AWD (4cyl 2.0L Automatic)
- Annual miles driven: 13,500 (50% city and 50% highway)
- Annual fuel use: 446 gallons at $3.76
- Total annual fuel cost: $1,675
- 2023 Hyundai Kona Electric EV
- Annual miles driven: 13,500 (50% city and 50% highway)
- Annual electricity use: 3,074 kWh
- Total annual electricity cost: $860
Other considerations
Electric vehicles tend to have lower repair and maintenance costs, according to Consumer Reports. One study found EV and plug-in hybrid drivers pay half as much over the life of the vehicle. However, EVs also depreciate faster.
There are also lifestyle factors to consider.
EVs make more sense for those who don’t have to travel long distances and live in areas with a robust charging infrastructure, Moody pointed out.
Weather also plays a role.
“Very cold weather hampers the performance of electric cars and hampers the charging rate of electric cars,” Moody said.
Charging time may also be a factor for those worried about waiting in their car while trying to keep children entertained. But even then, the vast majority of EV drivers — anywhere from 70 to 80% — charge their car at home, Moody said.
Consumers who are hoping to take advantage of federal tax credits may be better off waiting until more EVs qualify. Today, less than 20% of EV models on the market are eligible for all or part of the $7,500 clean vehicle tax credit outlined in last year’s Inflation Reduction Act. That number is expected to increase in the coming years.
States could also start levying additional taxes on EV drivers as Texas has done recently.