10 Hidden Costs Of Long-Term EV Ownership

Electric vehicles are becoming a larger and larger part of everyday life for Americans and people all over the globe. Sales once again grew year over year in 2024, and with all kinds of new options set to premiere in 2025, it seems unlikely that the trend will reverse anytime soon. Electric vehicles offer many advantages for buyers, including tax credits, a cheaper fuel cost, and a superior environmental impact (which of course also carries some social cache as well). That being said, EVs are typically not cheap, though some affordable options have become more available in recent years. As electric car ownership becomes a more attractive proposition, long-term costs have become a major thought for prospective buyers.

EVs are, of course, different from traditional internal combustion vehicles, and have different challenges to ownership. No one wants to spend a small fortune on a car only to find out that there are even more ridiculous bills to pay in the future. Here’s a list of some potential hidden EV costs.

This is a list of buying and maintaining electric vehicles. While we make every attempt to verify facts and back up any speculation, the information provided below may not be entirely accurate or may change. We will make every effort to update this content with new developments as they arise. All information contained here was obtained from authoritative sources, including manufacturer websites and government sites.

1

Battery Replacement

The most expensive thing in an electric vehicle is the battery, which makes sense when some thought is put into the subject. Not only can an EV battery (or more accurately, a battery pack consisting of numerous batteries) carry an entire multi-ton vehicle over 500 miles in some cases, but it is also made of expensive precious metals extracted in conditions that make them even more pricey than their rarity alone would. Electric motors are significantly more simple than ICE engines and thus cheaper to produce, leaving the battery as the weak link in making EVs more expensive than their gas-powered counterparts.

Batteries Can Cost As Much As The Value Of The Car

• J.D. Power suggests the cost to replace a battery will be between $4,000 to $20,000.
• This is obviously a massive spread in price, but it does illustrate that an EV battery is essentially the price of a used ICE car.
• However, most EVs come with a warranty for the battery. For example, Toyota provides an 8-year/150,000-mile warranty on all its hybrid, PHEV and EV batteries.

While the specter of an expensive battery replacement absolutely does hang over an EV driver’s head, the good news is that warranties are very robust for that piece of the vehicle. Unless you really put a tremendous amount of mileage on your electric car, it’s unlikely you’ll exceed warranty mileage before the clock runs out. Still, it’s important to note that for long-term ownership there likely is a serious expense of replacement in the cards.

2

Registration Fees

This is a fairly strange hidden cost that is very real. Registering your car is a mandatory fee for all states in the union, but lawmakers have turned the screws on electric car owners in this regard. Here’s what you need to know.

Certain States Charge More For Registration

• 33 states currently have an additional charge for EV registration.
• Most states cite loss of gas tax revenue as the reason why the registration fees are higher.
• Costs can go as high as $400 for the registration of a new EV (Texas).

Most states will upcharge your EV for registration. While the yearly savings in gas should more than offset this cost, it’s still worth noting that it’s likely you’ll be paying at least $30 extra for your vehicle registration as an electric vehicle owner

3

Insurance

Insurance is another mandatory cost for car ownership. EVs of course, are no different in this regard. While insurance prices are determined by usage and location, the vehicle itself is also very important. Unfortunately, EVs bring a little more financial pain in that regard.

Some EVs Are More Expensive To Insure Than Their ICE Counterparts

• This is corroborated by insurance companies like Progressive.
• Generally, EVs are more expensive to insure because they are more expensive to begin with, since there are very few budget EVs.
• On top of this, once again, battery cost rears its ugly head, the expense of replacing a damaged battery keeps the cost of insurance high.

Insurance is a touchy subject in current American culture, but for EV owners it may even be more so. Unfortunately, it is hard to avoid a high insurance premium on an EV, which is a bummer for those going electric to cut costs.

4

Tires

Tires are typically not something that crosses peoples’ minds in terms of car budgets. While obviously it is important to change your tires and ensure drivers remain safe on the road, changing your tires is typically fairly cheap, and doesn’t happen all that often if you don’t put a huge amount of mileage on your vehicle (or live in extreme weather conditions). However, this may not be the case if you buy an EV.

EVs Typically Run Down Tire Treads Faster

• The main reason EVs go through tires quicker is the electric motors. With many mounted directly on the wheel and all of them providing instant torque off the line, tires take additional punishment due to the way EVs are designed.
• EVs are also heavier than most vehicles. While lighter EVs are becoming more popular, the multi-ton typical EV puts more force onto the tires and destroys them at a quicker pace.
• EVs are of course so heavy, because of the battery.

Currently, EVs are heavier than their ICE relatives, but that does seem to be changing, as both smaller EVs become more popular, and technology continues to develop to make batteries lighter.

5

Depreciation

Depreciation is a danger for all vehicles. Unfortunately, after you roll the car off the dealership lot, it will begin to fall in value. As you sleep, you are essentially burning money with regard to the resale value of your car. Electric vehicles are no different. In fact, many are worse.

Most Electric Vehicles Experience Steep Depreciation

• According to Wired, some EVs lose half their value in a single year. Yes, one year to 50-percent depreciation. This is apparently based on calculations from Edmunds and Cap HPI.
• Fortunately, this depreciation is only happening in the UK. However, EVs still depreciate faster than ICE cars in the USA.
• A part of EV depreciation is that newer EVs are lower in sticker price than previous generations.
• Government incentives also create a reality where EVs cost several thousand dollars less in practice than their sticker price would appear, thus making the depreciation appear greater than what consumers ostensibly pay for the vehicle.

EV depreciation is real, but this does also have a bright side. It means that you can buy a used EV for a huge discount, even at low mileage. We must look on the bright side of these kinds of problems, after all.

6

Home Charging Setup

The greatest advantage of EV ownership is the cost savings on fuel. You can save thousands of dollars a year on gas costs depending on where you live. This is all achieved through the home charging station that allows EV owners to power their cars at the same price they power their lightbulbs and charge their cell phones. However, most houses do not come with an EV charger already installed.

Upgrading Your Electrical Supply Could Be Expensive

• Adding a Level 1 Charger will run up to $1,500 after labor.
• To get a Level 2 charger there could be an additional $1,000 or more to install the correct outlet and electrical system to provide the additional power to your vehicle.
• It will be even more expensive if you would like to install your charger on the outside of your home as well.

Despite these large costs, there are some government incentives to soften the blow. Currently, you can get up to $1,000 in tax deductions in rural and low-income areas. However, this may change with the new administration. Also, some companies like Hyundai are offering free chargers with the purchase of an EV. While charging your vehicle at home is both a huge advantage for convenience and for fuel pricing, there is a baked-in cost to setting the infrastructure up.

7

Public Charging

Public charging is the thing that currently worries EV drivers the most.

Range anxiety is a major thing EV drivers worry about
. They worry whether they will have enough juice to get to their destination, and public chargers are the thing that can save them if they don’t. However, public chargers can be inconvenient and pricey.

Adapters For Charging Plugs Can Be Expensive, And Public Charging Can Cost As Much As Gas

• Public chargers are becoming more available, with Tesla’s massive supercharging network being the main hub in the U.S.
• However, older EVs may not be compatible with the Tesla North American Charging Standard and require an adapter which will cost up to about $250 depending on the brand of your EV.
• Level 2 Charging is significantly cheaper than gasoline even at public chargers, but it will likely take around an hour to get an EV back to 80% or more. JD Power’s 2024 EV experience survey showed that less than half of people surveyed are satisfied with public Level 2 Charging, mainly due to time.
• DC Fast Charging can bring most EVs up to 80-percent in under 25 minutes but can also cost nearly 50 cents per kWh, which can be more expensive than gas in certain areas.

Public charging has yet to reach the convenience of filling a gas tank, and likely never will. While some companies like Mercedes are working on higher-end charging stations to provide a better experience, ultimately, charging in public will either be inconvenient due to time spent waiting, or fail to provide the cost advantage that makes EVs attractive.

8

Subscription Features

EVs and high-tech go hand in hand. Brands like Tesla have built that reputation and most other EV makers have had to bring their own version of technologically advanced products and features in order to compete. Outside of cars like the Nissan Leaf, most EV buyers expect fancy features that make them feel like they are driving futuristic technology.

Many EV Makers Charge For Their Best Features

• Famously, Tesla charges a subscription fee for its Autopilot and Self-Driving features.
• Mercedes locks faster acceleration for the EQS behind a $1,200 yearly paywall. Yes, $100 a month to get the most out of the car.
• BMW notoriously planned to charge for heated seats, but scrapped the idea after backlash. However, they do charge for parking assistance and other software features.

Unfortunately, these egregious predatory subscription models are not unique to EVs. However, some of the best features of popular EVs are indeed locked behind paid subscription services. It’s really just an abusive practice to charge consumers upwards of $100,000 for a car and then continue to demand more for features that would have been endemic to the vehicle a few short years ago. A simply disgusting trend from automakers we can’t hope goes away soon enough.

9

Repairs

Repairs are something that you hope you never have to do to any car you own. If you do, you hope that insurance is paying for it. However, damage does happen, and if it does, you must be ready to pony up. Unfortunately, EVs have another premium there.

EVs Are Still More Expensive To Repair Compared To ICEs

The data shows that crashing an EV will be more expensive than crashing an ICE. This also gives a more clear explanation as to why the insurance costs are more expensive as well. However, these costs should lower over time, as more people become EV repair technicians and the supply chain for repairs becomes more advanced.

10

Sticker Price

Buying a new car is always going to be a large financial investment. Financing rates, credit, and cash on hand will all play a role in how much the total cost of the car ultimately ends up at. However, one thing is for certain, electric vehicles are expensive.

ICE Cars Are Simply Cheaper To Buy

• Per Edmunds, there is a 42-percent price gap between ICE and EV average MSRP as of May 2024.
• Compact SUVs saw a huge 58.5-percent gulf between gasoline power and EVs.
• Pickups had the smallest gap, “only” 18-percent.
• While the $7,500 tax credit closes this gap slightly, it is far from covering these huge numbers.

While this isn’t a “hidden” cost at face value, the huge gulf in price creates a hidden cost of opportunity. This would mainly be reflected in terms of options. You could buy a fully loaded version of a comparable ICE car for the base price of an EV. It’s unfortunate that this is still the case, but cheaper EV options continue to become available, and the balance will hopefully be restored.

If you are in the market for an EV we hope this list was helpful, and not too discouraging. ICE cars also have hidden costs, after all. Best of luck with your new EV search!