To EV or not to EV?
By Erik Schultz, NEKCA’s GreenSavingSmart Financial & Energy Coach
Have high gas prices got you down? If you are thinking about buying an EV, you’re not alone. EV sales are surging worldwide and manufacturers will be adding nearly 80 new passenger EV models to the U.S. market in the next few years. The federal government is investing billions to build an extensive network of charging stations and federal, state and local incentives are still available. This is great news for the planet as the U.S. is the second largest producer of greenhouse gases. In Vermont transportation accounts for the largest share of total carbon pollution from all sources at forty-five percent. Saying goodbye to that old internal combustion engine, EV drivers reduce emissions, improve local air quality and can save big on yearly fueling costs!
This sounds fantastic, reduce emissions, great performance, quiet smooth ride and the convenience and savings that come with charging at home. But the move to go electric can be a bit overwhelming, so let’s go over the most important points about buying your first electric car.
Let’s look at your EV budget
Your financial condition: First and foremost, are you in a good position to be buying a vehicle? You should already have a budget in place but if you do not there is no time like the present. Take some time to work on your budget by looking at your income compared to what you spend on bills and expenses every month. If plan on financing the vehicle, you are going to want to be aware of both your credit score and your debt to Income ratio (annual debt payments ÷ Annual Gross Income = Debt to Income Ratio) - Lenders prefer to see DTI ratios below 36%.
Sticker shock: The average cost of a new electric vehicle is around $56,000 but EVs still offer a lower total cost of ownership a gas-powered vehicle. In fact both 2022 the Mini Cooper SE and Nissan Leaf both come in at under $30,000, and that’s before any incentives! Start by seeing if you qualify for the federal EV tax credit, which can go up to $7500 and most importantly, do you have the tax liability to take advantage of this credit? Next check on any state or utility incentives. The incentive calculator at Drive Electric Vermont provides a quick and easy way to see what you may qualify for. If you would like to take a closer look at exactly what is out there, this is a great list of every electric vehicle available in America for 2022. For those who may be interested in purchasing a used vehicle in Vermont, the Mileagesmart program can help income qualified individuals with up to $5,000 towards the purchase of a used hybrid or electric vehicle.
Fuel: As a happy EV owner I can tell you there is nothing better than passing the gas station by, especially as the prices seen to be going up and up! Charging an electric vehicle at home is roughly the equivalent of paying about a dollar a gallon for gas. There are many factors that can impact this such as local utility costs, where you charge, efficiency of your EV etc. Also, keep in mind you will tend to pay more at public charging stations compared to when you charge at home, but you will still be saving substantially on fuel costs while cruising carbon free.
Maintenance: A growing body of research confirms that battery-powered vehicles are cheaper to own than those that are powered by fossil fuels. These costs on average run about 31% less for electric vehicles compared to gas powered cars. EVs have fewer moving parts that can go bad and do not need some of the routine maintenance required of conventional cars. Say goodbye to oil changes, tune ups, transmission issues etc. A recent report from the US Department of Energy found that EVs cost 6.1 cents per mile to maintain, compared to 10.1 cents per mile for combustion-engine vehicles. Make sure to factor in these savings when considering an EV.
Initial Setup: Most EVs come with what is called a “Level 1” charger, which can plug into your traditional 120-volt outlet. But many EV drivers also install what is known as a “Level 2,” 240-volt outlet into their garage for faster charging. The installation costs here will depend on the condition of your main panel and distance to the garage but can run up to several thousand dollars. This of course will be an issue for renters and apartment dwellers until a more robust public and workplace charging infrastructure is in place.
Your typical driving needs
The term “range anxiety” is becoming more and more common as many people worry about how far they can travel without running out of juice! EVs can go anywhere from about 100 to over 500 miles on a single charge. The average car owner in the U.S. only travels 31.5 miles per day but if you are a road warrior putting on hundreds of miles per day in rural Vermont, waiting for the charging infrastructure to catch up may make sense. A plug-in hybid vehicle may be worth considering as well as you can switch to gasoline on longer trips and put a stop to that range anxiety!
Make sure to take a good look at your regular car use. How far is your daily commute? How often do you take longer road trips for work or pleasure? If you do travel beyond your EVs range, you can still use public charging stations and get by just fine. Many vehicles will charge up quickly at “level 3” fast chargers and yes it may be a bit longer than a typical fill up at the gas station, but I say this is a great time to get out of the car, stretch your legs or grab a quick coffee.
Consider how you will regularly charge your car
Most people will choose to charge at home if possible. You can plug into a normal 120-volt outlet but this can take up to a few days to fully charge your electric car. Level 2 charging by comparison allows you to fully charge in 6-8 hours and your car will definitely be ready to go if left charging overnight. Also, keep in mind a plug-in hybrid vehicle should be perfectly fine to charge overnight with only a regular 120-volt outlet.
If you live in an apartment complex you may be able to petition the building owner or manager to get EV charging stations installed. In fact, the Department of Housing and Community Development (DHCD) launched in January 2022 the Multiunit Dwelling Electric Vehicle Charging Grant Program to bring more home-charging opportunities to Vermonters. $1,000,000 in funding is available to subsidize the cost of purchasing and installing Electric Vehicle (EV) charging stations at rental properties to provide residents with at-home charging access. If that is not possible you will have to rely on public charging stations, which can be less convenient than charging at home but still doable. The good news is that charging stations will continue to come online and many employers will most likely add stations to workplace parking lots in the future as well.
The EV revolution is here and I encourage everyone to consider going electric if possible when it comes time to replace or buy a new vehicle. If you are considering an EV and still have questions or maybe are need of a financial tune-up before you can start shopping please contact one of our coaches and we can help get you out on the road in no time!