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Electric cars need to get cheaper

By Tara Baukus Mello · Bankrate.com
Wednesday, November 14, 2012
Posted: 11 am ET

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.

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2 Comments
JR
October 29, 2013 at 11:17 am

We just purchased a new 2013 Chevy Volt. Between dealer incentives, state, and federal rebates the cost of the car was less then the cost of an equivalently sized and equipped Chevy Cruze. Now if we add in the fuel savings of $210.00 a month over what we were paying ( this is just what my wife saves going to work, and does not factor in the weekends savings ) and I don't understand where you figure that it is more expensive.

We figure the fuel savings will pay for the car in 7 years. The warranty on the battery is for 8, so anyway we look at it is a win.

lagunalady27
January 11, 2013 at 11:31 am

Yes, they do. So should solar cells. Every flat roof in the country should have solar cells which would create enough electricity to run that home, and send excess to the grid. Every parking lot should have panels of solar cells, with charging stations for the electric cars parked beneath them.

Why isn't this happening right now? The technology exists. Someone is making a boatload of money off of us not having this available. We are paying the price in weather related disasters. Why do we tolerate this? We should have a solar power and electric vehicle initiative in this country like we did for putting a man on the moon.

Ten years...GET IT DONE!