Electric vehicles are more expensive than gasoline cars and some depreciate faster. Even for CO conscious people2the question arises: does it make sense to buy one now?
The answer may be yes. But there are many factors to consider. It depends on your driving habits. It also depends on how much you value reducing your carbon footprint. And because electric cars are new technology, depreciation forecasts are less certain than those for gasoline-powered vehicles.
Battery durability
The electric car is quite new, so the data on the useful life of the batteries is not yet very reliable. But we know that lithium-ion batteries lose their capacity over time.
But the degradation is very slow. Tesla and other manufacturers have equipped their batteries with software that protects them against overheating and, in particular, against overvoltage during recharging.
U.S. law requires manufacturers to warrant electric car batteries for eight years or 100,000 miles (161,000 km), but manufacturers interpret that rule differently. Typically, they’ll replace the battery if it loses more than 30 percent of its capacity during the warranty period.
One thing to note: the batteries work in extreme cold and heat conditions, but the range is reduced.
There have been many documented cases of electric cars that have been driven hundreds of thousands of miles. The probability of needing a battery replacement is less than 1% for vehicles built from 2016 onwards, according to Recurrent, a company that analyzes the used electric vehicle market.
“All indications are that batteries are more durable than cars themselves,” says Liz Najman, director of market research at Recurrent. “There’s no doubt that their useful life is as long as the average gasoline-powered car.”
Because these batteries contain recyclable precious metals – lithium, cobalt, etc. – even a scrap battery will still have some value.
Resale value
The price of used electric cars has fluctuated a lot. In 2022, electric cars were rare and highly sought after: some models sold for more than the original price paid. Today, there are more than 100 electric models on the market and the resale value of some models has plummeted.
In the United States, on average, electric vehicles have depreciated 49% over five years (39% for all vehicles), according to iSeeCars.com, a car sales website. But one-time factors have played a role, such as Tesla cutting prices on its new models.
“Why buy a used car if the new one is the same price?” says Karl Brauer, an analyst at iSeeCars.
Hertz flooded the market with 30,000 cars from its electric fleet because it was losing money on them. The launch of competing models by Hyundai, Kia, Ford and GM also affected prices.
However, prices on the used market appear to be stabilizing. Newer models with longer ranges have held their value, says John Helveston, a professor at George Washington University. The depreciation rate for electric vehicles is approaching that of gasoline vehicles, “but we’re not there yet,” he says.
Leasing is a way to minimize the risk of accelerated depreciation, especially if a technological breakthrough makes current models obsolete. When the lease expires, depreciation is the dealer’s problem.
Another option: Buy a used model that’s already depreciated. Some used electrics cost less than their gasoline counterparts, according to some recent estimates. “That’s a great option,” Helveston says.
No more gasoline
When buying a car, people first consider the purchase price. According to Cox Automotive, the combined average price of new electric cars and trucks was $56,371 in June, compared to $48,644 for these vehicles across all power sources.
But that money pays for itself over time: no more stops at the pump, reduced maintenance costs. According to U.S. environmental authorities, recharging a Ford F-150 Lightning costs $1,100 a year, less than 50% of what the most fuel-efficient F-150 model costs at the pump.
These savings vary depending on gasoline and electricity prices and also on how you drive.
Maintenance is cheaper because there are fewer parts to break in an electric motor. Plus, there are no oil changes or spark plug or muffler replacements. On the downside, tires wear out faster because of the heavy battery.
Doing your part for the planet
Some of the benefits of electric cars are hard to quantify. Many owners derive satisfaction from driving without leaving behind a cloud of greenhouse gases and other pollutants (although no vehicle is without impact on the environment).
According to a study by Argonne National Laboratory in Lemont, a suburb of Chicago, a midsize electric sedan with a range of 300 miles produces half as many greenhouse gases over its lifetime as a comparable gasoline-powered car. That takes into account emissions from mining, construction and electricity generation.
Electric vehicles do not produce nitrogen oxides or other pollutants that cause asthma and other respiratory problems. Many users appreciate the acceleration and quietness of electric vehicles, as well as the ability to charge them at home. Do the advantages and disadvantages together justify paying more? That is a matter of personal preference.
This article was published in the New York Times.
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Grants
Added to all these considerations is the question of government incentives and their eventual end. The Quebec Roulez vert program is scheduled to end in 2027. The federal program continues until March 31, 2025, or until the voted credits are exhausted.
Read our article on the Quebec government’s Roulez vert program