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How much will you actually save with an electric car?
Electric cars drive savings at the pump and in the garage.
More and more Canadians are embracing the idea of electric vehicles, with around 1 in 11 cars sold qualifying as an EV, according to a 2019 CBC report. Electric vehicles help you save at the gas pump and at the garage. High upfront costs have deterred some buyers, but increased market competition and a greater number of charging stations have made owning an electric car easier than ever.
Compare how much you could actually save by going electric, and decide whether it’s worth it for you.
What’s considered an electric car?
Electric vehicles can be pure electric, where the car is run completely from a battery.
There are combination hybrid-electric cars too. Hybrids use a combustion engine to start and then switch to electricity when the car reaches the right conditions. Plug-in hybrids use the electric battery charge first before switching to the hybrid engine.
Pure electric cars require a charge from the wall or charging station, and they also use regenerative braking to recharge the battery while driving. Hybrids charge the battery through regenerative braking and the engine alternator and don’t require you to plug them in to charge.
Comparison of popular electric and hybrid cars
Compare the costs associated with each of the popular models below to get a better idea of how much you could potentially save with an electric vehicle. The costs shown are in Canadian dollars.
|Car||MSRP (base model)||Annual fuel costs*||Service cost||Energy consumption||0 – 100 km/h|
2020 Tesla Model 3 Long Range (fully electric)
|$51,600||$419||Following the recommended 5-year service schedule would cost roughly $1,850 total.|
A single repair can run from under $100 to $1,000+ but averages around $285.
|Electric: 16 kWh/100 km|
Fuel equivalent: 1.8 L/100 km
2020 BMW i3 2D hatchback (fully electric)
|$44,950||$481||BMW Service Inclusive (2019 model): $365 4-years/120,000 km|
BMW Service Inclusive Plus (2019 model): $2,800 4-years/120,000 km
|Electric: 19.1 kWh/100 km|
Fuel equivalent: 2.1 L/100 km
2021 Toyota Prius (hybrid)
|$28,650||$1,170||Maintenance visits could cost around $125-$250 each for the first couple of years then $250-$675 afterwards.|
Extra warranty coverage can be purchased for $800 or more depending on which plan you choose.
|Electric: 35.2 kWh/100 km|
Fuel: 4.4 L/100 km
2020 BMW i8 2D coupe (plug-in hybrid)
|$149,900||$1,794||BMW Service Inclusive (2019 model): $650 4-years/120,000 km|
BMW Service Inclusive Plus (2019 model): $3,260 4-years/120,000 km
|Electric: 55 kWh/100 km|
Fuel: 3.4 L/100 km
*Annual estimated fuel costs are from Natural Resources Canada.
Tax savings on electric cars
The federal government offers a tax credit of up to $5,000 for the first registered owner of a battery-electric, hydrogen fuel cell, and longer range plug-in hybrid vehicles. Shorter range plug-in hybrid electric vehicles (which travel less than 50 km on a single charge and have a battery capacity less than 15 kWh) are eligible for an incentive of $2,500.
Unless you live in British Columbia or Quebec, you won’t be able to get provincial tax credits to offset the cost of buying an electric vehicle.
At the gas station pump: fuel savings
The difference between the cost of charging an electric car and fueling a gas car varies widely across Canada because of differences in taxation and the cost of fuel. But by driving electric, you could potentially save anywhere between $470 and $1,925 per year.
- Average cost per year to charge an electric car:
$175 — $630
- Average cost per year to fill up a gas-powered car:
$1,100 — $2,100
Additionally, you might get around 70 km per Canadian dollar with an electric car, while a gas vehicle will only give you around 30 km for the same cost. Of course, the actual amount of money you’ll spend on fuel depends on the exact make and model of your vehicle, how many kilometres you drive and other factors.
On average, a EV car battery can last for roughly 320,000 km, which is 16-21 years if you drive 15,000-20,000 km/year. On the other hand, a gas-powered car may last only 10-15 years. Some car experts recommend extending the life of your EV car battery by charging it up to only 80% or 90% instead of 100%. Charging the battery to its fullest capacity on a regular basis could cause it wear out sooner.
The value of electric cars
The average starting price of a brand new gas-powered vehicle in Canada is between $30,000 and $40,000. It’s possible to find a brand new electric vehicle in this price range, although you’ll get more car for your money with a gas-powered vehicle.
Another factor to consider is your car’s resale value. Electric vehicles are said to decrease in value by over 60% within the first 3 years of usage. This is higher than gas-powered vehicles, which decrease in value by around 40-50% over 30 years. Electric vehicles are expected to retain more value over time as technology improves.
All this doesn’t even factoring in additional savings on car insurance and maintenance, which could help you break even on your EV investment sooner than you think.
In the shop: savings on maintenance
It can be difficult to say exactly what the saving are on electric car maintenance costs. There’s less chance you’ll break down, and service packages are cheaper too.
Compared to gas-powered cars, EVs are more efficient in urban environments. EV engines are better at converting energy to movement, especially from a standing start. Regenerative braking uses the engine to slow the car as well as charge the battery.
Electric cars have fewer moving parts. An electric car does not need oil changes or cooling system flushes and will have much less wear on the brakes.
On the road: savings on car insurance
Electric cars and hybrids could enjoy discounts up to 10% on car insurance. Insurance providers appreciate these cars as low risk, since they tend to be safer and less likely to break down.
But watch out for other factors that could raise insurance costs for electric cars, such as a higher purchase price or more expensive replacement parts.
Compare free car insurance quotes online
Extra costs for electric cars to watch out for
The price will drop as the manufacturing capabilities of car companies improves and the price of parts decreases. It’s a case of paying a higher upfront price for lower running costs over the years.
If you’re in the market to spend $30,000 – $40,000 on a car, an electric vehicle can make sense. Everyone else will have to wait till the price becomes a little more affordable and charging stations are featured in every major parking lot.
Replacing an electric car’s battery
Electric cars cost less to maintain than combustion engine cars. The battery is one major electric vehicle component which is expensive and will need to be replaced after driving it for a certain period.
Batteries degrade over years, and after a decade, can only hold about half the original charge. There are tips for getting the most life from electric car lithium-ion batteries, such as keeping the charge at about 50%. However, degradation is inevitable, and electric car owners will have to deal with replacing an old battery at some point.
Electric car batteries typically have warranties for failure for either 8 years/160,000 km or 10 years/240,000 km, depending on your state. Batteries cost $10,000 on average to replace when out of warranty, though that number depends on your model. For example, the Nissan Leaf battery cost is typically closer to $5,500, while the Chevy Bolt can cost over $16,000 for a full battery replacement.
What are the pros and cons of driving an electric car?
As well as the cost savings from gas and vehicle maintenance, there are other things to consider.
- Charging a car is cheaper than fueling it with gas or diesel.
- Maintenance costs are typically lower for EVs.
- Electric cars could qualify for insurance discounts.
- Electric cars produce low or no emissions on the road if charged from a renewable source.
- Charging stations aren’t available everywhere, limiting your road trip distance.
- You’ll need a place to charge your car, such as a garage.
- Electric cars cost more to buy than petrol run vehicles.
- Replacing your EV’s battery could cost thousands out of warranty.
When comparing an electric car to a traditional gas-powered vehicle, the initial sticker price differences might have you thinking twice. But you’ll find savings on fuel, maintenance and car insurance that could offset the initial higher cost.
If you’re looking for a way to save money on your commuting costs while reducing your carbon footprint, an EV could be the right vehicle for you.
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