Electric Cars Are Cheaper Than Consumers Realize

NEW YORK (MainStreet) — Many electric cars are much cheaper than most consumers believe because of the combination of federal tax credits and state incentives, saving consumers thousands of dollars.

Going green does not have to cost consumers more money. Electric vehicles (EVs) are eligible for federal tax credits worth up to $7,500 for owners while many states such as California are offering residents a rebate of $2,500 for consumers who buy or lease electric vehicles for at least three years. Even plug-in hybrid electric vehicles are eligible for up to $7,500 in federal tax credits.

Many people don't think that fully-electric cars are practical, because many need to be charged every 75 to 100 miles, but most studies show that drivers travel less than 40 miles per day, said Tara Baukus Mello, Bankrate.com's cars analyst.

"If you're going to be an ideal candidate for an electric vehicle, you need to have a regular commute," she said. "You do have to be more aware of where you are going and how far away it is, but for most drivers, there is plenty of wiggle room and there are many public chargers."

Many states and cities have large numbers of fueling stations, even at hotels and shopping centers. In California, there are 1,000 stations scattered throughout the state, including 97 just in San Diego. Other states, even those that do not appear to be environmentally conscious, also have plenty of stations - Phoenix has 88, New York has 83, Chicago has 78 and even Houston and Los Angeles, two cities where residents love to drive, have 79 stations each. To check out the top cities for EVs, click here.

Charging a vehicle can be as fast as two hours or as long as several hours or overnight. Most cars have smartphone apps so you can schedule it for when your electricity rates are lower.

The number of electric vehicles in operation grew by 245% in 2013, while hybrid vehicles still made up 98% of all alternative-powered vehicles on the road, said Experian Automotive, the global information services company. That analysis found that 55% of owners of electric vehicles are between the ages of 36 years old and 55 years old. The number of hybrids increased by 19% last year.

According to Experian Automotive, the top five hybrid models on the road in 2013 were:

  • Toyota Prius
  • Toyota Camry
  • Honda Civic
  • Toyota Highlander
  • Ford Fusion

The top five electric vehicle models on the road were:

  • Nissan Leaf
  • Tesla Model S
  • Ford Focus
  • FIAT 500e
  • Mitsubishi i-MiEV

The study also showed that the average monthly payment for a new electric vehicle was $549, which was $82 more than a new hybrid of $467.

Owners of electric cars or hybrids can save thousands of dollars each year since electric vehicles offer the ability to use a lower cost fuel source, said Darin Gesse, marketing product manager for the Chevrolet Volt. According to the EPA, the average electricity cost is $0.12 kWh. For a vehicle like the Chevrolet Volt, it takes roughly $1.60 in electricity cost to fully charge the battery, which can allow a customer to drive an average of 38 miles on electricity alone before the range extending gas- powered generator kicks in.

"This means it costs $1.60 to go 38 miles," he said. "Compare that to the cost of a gallon of gas and one can quickly see that driving on electricity can significantly reduce your fuel costs. The energy efficiency of these vehicles powered by electricity can be three times more energy efficient than their gas counterparts."

Depending on the utility company, electricity used to charge the electric car's battery could be derived from solar power, wind energy, geothermal or hydropower sources which means using sustainable energy that produces little to no emissions.

The absence of running an engine results in the lack of engine maintenance such as oil changes and less wear and tear than gas-powered vehicles.

They require very little maintenance like your smartphone or laptop, said Baukus Mello. The power train warranty offered by most manufacturers is also longer – it ranges from eight years or 80,000 miles to 10 years or 100,000 miles.

"The great appeal to owning an electric car beyond saving money and being environmentally friendly is that they can be really fun to drive," she said. "There is an electric motor which has continuous torque."

Dan Shugar, CEO of NEXTracker, a Fremont, Calif. solar tracking systems company, has been driving an electric car for the past 15 years and has never been stranded. His first electric vehicle was a Toyota RAV4 which he drove for 95,000 miles and has traversed 52,000 miles on his current vehicle, a Tesla.

"Electrical vehicles are fantastic," he said. "The driving experience is preferable – it's smoother and much quieter."

People want to be part of the solution to reduce the carbon footprint and emissions, Shugar said. Driving more fuel-efficient vehicles helps to decrease the use of fossil fuel, lowers energy costs through fuel reduction and lessens harmful gas emissions, said Chad Hall, vice president of marketing and product management for Ioxus, an Oneonta, N.Y. manufacturer of performance ultracapacitor technology,

"Greater electric car adoption has also helped lower noise pollution," he said. "Ownership of EVs doesn't come without drawbacks including limited range and charge time. Performance can also fade with the life of the vehicle. More people need to recognize that while sold at a higher cost, hybrid and electric vehicles are cheaper to operate in the long run."

Even though electric vehicles can be a better deal than traditional "internal combustion engine" vehicles, the thing that drivers really like is their better performance, said Ryan Schuchard, associate director of climate and energy for Business for Social Responsibility, a San Francisco-based non-profit sustainability consultancy.

"Compared to vehicles that use liquid fuels, EVs have greater acceleration and torque and are much more fun to drive," he said. "While the upfront cost of EVs is higher, the price is no longer prohibitive. We are now seeing payback periods of three to four years in commercial trucking."

For more information about tax credits for electric vehicles, click here.

Click here for tax credits about plug-in hybrids.

 

--Written by Ellen Chang for MainStreet

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