Electric cars will need to get cheaper in order to increase sales, says a new study from J.D. Power and Associates. The 2012 Electric Vehicle Ownership Experience Study found that all-electric vehicles -- cars that run solely on electric power -- cost $10,000 more on average than a similar gasoline-powered car. At the same time, plug-in hybrid electric cars -- those than can run partially on electric-only power but have an on-board gasoline engine for longer distances -- cost $16,000 more on average. These price premiums can dramatically increase the monthly payment on a car loan compared to a similar gasoline-only car.
With those premiums, the J.D. Power study found that it takes an average of 6.5 years for all-electric car owners to recoup the cost and 11 years for people who buy a plug-in electric hybrid. This factors in the reduced fuel costs of these cars. The study found that current electric-car owners pay an average of $18 per month in electricity to recharge their electric vehicles, versus an average of $147 per month for gasoline. The study did not factor in the federal and state tax credits for purchasing these cars, as they vary depending on the car model and the state. But in some cases, there are federal tax credits as much as $7,500, which significantly reduces the premium of owning an electric car.
"The bottom line is that the price has to come down, which would require a technological quantum leap to reduce the battery price. There also needs to be an improvement in the infrastructure, or the number of charging stations outside of the home. Until those two concerns are addressed, EV sales will remain flat," said Neal Oddes, senior director of the green practice at J.D. Power and Associates.
Are electric cars worth the money? Are you ready to convert to one?
Tara Baukus Mello writes the cars blog as well as the weekly Driving for Dollars column, providing both practical financial advice for consumers as well as insight into the latest developments in the automotive world. Follow her on Facebook here or on Twitter @SheDrives.