2024 might be one of the most incentivizing years on record if you’re thinking about buying an electric vehicle.
In recent years, EVs were considerably more expensive than gas-powered vehicles. However, thanks to an increasing amount of discounts and a tax credit, purchasing an EV is swiftly becoming economically and environmentally practical. EVs have several ways of paying their owners back and then some over the course of their lives.
EVs Aren’t Much More Than Gas-Powered Vehicles in 2024?
If you’re considering an EV, you won’t be paying much more than you would if you chose a gas-powered car.
Electrek cited statistics from Cox Automotive stating that the average transaction price for an EV was $50,798 at the end of 2023. In comparison, the average gas-powered car is priced at $48,759.
Consumers interested in buying a Tesla can also expect to receive plenty of bang for their buck this year. In October 2023, Tesla’s Model Y and 3 were at their lowest prices ever. The average transaction price of a Tesla is $50,051, which is slightly below the industry average.
Clean Vehicle Tax Credit
Another incentive to purchasing an EV this year is the ability to qualify for a clean vehicle tax credit. According to the IRS, if you bought a qualifying plug-in EV in 2023 or after you may qualify for a tax credit of up to $7,500.
It’s important to note, however, individuals and vehicles must meet certain specifications to qualify for this credit. Those who bought an EV must use it primarily in the U.S. and buy it for their own use, not for resale.
Additionally, there are qualifications for adjusted gross income (AGI) which are outlined as follows:
- $300,000 for married couples filing jointly
- $225,000 for heads of households
- $150,000 for all other filers
The EV must also meet certain qualifications. These include having a battery capacity of at least seven kilowatt hours, having a gross vehicle weight rating of less than 14,000 pounds, being made by a qualified manufacturer and meeting critical mineral and battery component requirements (as of April 18, 2023). The sale only qualifies if you buy the vehicle new and the seller reports required information to you at the time of sale and to the IRS.
Proof That EVs Pay Their Owners Back
The sooner consumers buy an EV, the quicker they will notice a return on their investment — and not just because of the tax credit either.
According to the Deepview True Cost Second Owner Study published by WePredict, here’s how EVs start paying dividends over ICE (internal combustion engine) vehicles within three years:
- Three months: Average EV service costs are $123 compared to $53 for ICE vehicles — EVs cost 132% more
- One year: Average EV service costs are $306 compared to $189 for ICE vehicles — EVs cost 62% more
- 36 months: Average EV service costs are $514 compared to $749 for ICE vehicles — EVs cost 31% less
Saving on Gas and Charging Costs
The national average cost of gas, according to AAA, is about $3.25 a gallon. However, even when gas was cheap, charging an EV is a bargain compared to filling a gas tank.
Most of today’s EVs have sufficiently long ranges to allow their owners to do most of their charging at home. According to EnergySage, owners can save even more money on EV charging costs by going solar and utilizing special time-of-use rates and off-peak charging programs with your utility company.
You can contact your utility provider to determine which special rates they offer on charging costs and learn more.
Fewer Moving Parts = Fewer Maintenance Bills
The most obvious cost-of-ownership savings are in gasoline never purchased, but EVs are also much cheaper to maintain. According to The Drive Electric, the typical EV has only 20 moving parts compared to hundreds in an internal combustion engine.
A few years ago, Business Insider cited statistics from We Predict about the difference in maintenance costs for EVs and gas-powered vehicles. EVs, within their first three years of ownership, need about $77 in maintenance and have repair bills that are 22% lower than those of gas cars.
Newer EVs Hold Their Value at Least as Well as Old-School Cars
Like combustion vehicles, EVs lose value over time. Also like traditional cars, not all EVs depreciate at the same rate. Variables like features, class, and manufacturer reputation determine how well both kinds of vehicles hold their value.
That said, Consumer Reports found that “newer long-range EVs are holding their value as well as or better than their traditional gasoline-powered counterparts as most new models now can be relied on to travel more than 200 miles on a single full charge.”
Electric or gas, all cars are depreciating assets that begin losing value the moment you get behind the wheel — or are they? In 2019, Elon Musk insisted that — thanks to their self-driving capabilities — Teslas were becoming the first appreciating production vehicles in automotive history.
Time will tell.
