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Maybe you want to buy an electric vehicle because you want to do your part for the planet. Maybe the idea of driving around in a Tesla just looks cool to you.
Whatever the reason, purchasing an electric vehicle can reduce your carbon footprint and save you lots of money in the long run.
Unfortunately, the biggest obstacle to mass adoption remains the sticker cost to buy an EV. But that gap is slowly closing as a new fleet of electric cars enters the market, competition rages between manufacturers, and governments pour more money into EV research.
Let’s explore how affordable electric cars are and find ways to help you purchase an electric vehicle without breaking the bank.
Although young people are most excited about purchasing EVs, studies show they are more likely to be in a tough position to afford them.
Thankfully, EVs are getting cheaper every year, and you won’t have to wait years to get one, either. According to The New York Times, some EV models may be priced the same as gasoline cars as early as 2023.
Part of the exorbitant cost of manufacturing an EV is the cost of building or importing batteries. But as battery production in the US skyrockets, the cost of manufacturing an EV battery domestically, plus the incentives provided by the Inflation Reduction Act, could reduce the cost of battery manufacturing down to nearly $0 per kWh over the next ten years.
As for EVs, as they currently sit on the market, their price is very competitive. For example, the Chevrolet Bolt–the lowest-priced EV, starting at $25,000– is only $4,000 higher than a brand-new 2023 Toyota Corolla and costs less after factoring in tax credits.
Several other models, including the Kia Niro and Nissan Leaf, cost less than $40,000, and the Chevrolet Silverado EV WT will be priced at just over $39,000.
Plus, the electric car tax credit knocks off a significant portion of the sticker price on many of these new vehicles.
The Inflation Reduction recently extended the electric car tax credit for new EV cars to $7500 between 2023-2032.
As a result, you could access a new Chevrolet Bolt for as little as $18,000 or a Tesla Model 3 for as little as $35,000.
However, while clean energy tax credits are redeemable only during tax season, some dealerships are taking the forthright step to knock it right off the sticker price at the point of sale.
Note
New rules were released in April 2023 that placed additional stipulations on what cars qualify for the credit. According to the Act, to receive the first $3750, at least 50% of the battery’s components must be made in the US and 40% of all precious minerals manufactured in the US (or a free-trade agreement partner) to receive the other $3750.
Used cars worth less than $25,000 and purchased from a dealer can also be redeemed for a tax credit worth 30% of its value, up to $4,000 in total. This gives drivers more choices as they try to shop for a new EV.
One thing we like to stress when we discuss electric car affordability is the long-term tradeoff you get from switching to an EV. So when many people ask are EVs worth it, we need to remind them that the benefits accumulate over time and are more than just financial savings.
A brand-new gas-powered sedan not only comes with an expensive price tag but you’ll also be paying for gasoline over its life, the cost of which is only increasing with time.
On the other hand, electric vehicles offer significantly lower fuel costs, especially when coupled with home solar panels. Plus, smart charging allows you to charge your EV when grid usage is lower, so you pay less.
One also needs to factor in the reduction in maintenance costs of driving an EV with fewer moving parts and internal components.
Furthermore, as we move toward the mass adoption of EVs, servicing a gas-powered vehicle may become more expensive.
In sum, the short-term costs of owning an EV are largely offset by the long-term savings you’ll accrue.
If you’re looking to access the EV market, we’ve listed a few affordable EV models that may be within your budget as of early 2023.
With a 259-mile range, the Chevy Bolt offers the most affordable new EV on the market. Chevrolet also offers free level-two charger home installations to make the transition to an EV as easy as possible. You can expect to pay $19,000 after your available tax credit.
The Chevy Equinox will be considered one of the most affordable midsize vehicles for families starting in 2024. The car comes with 300 miles of range, 210 horsepower, and 34 miles of range per charging hour. In addition, we expect federal tax credits to be available, which should knock the price down below $23,000.
The 2023 Nissan Leaf only has a 212-mile range but is easily one of the most affordable and comfortable cars to transition into the EV market. With tax credits available, this EV is perfect for getting around town and running errands.
Based on the 2023 model, this Tesla comes with at least a 272-mile range and a whole host of features on its base model. The Model 3 is the most affordable EV that is efficient enough and has the supercharger infrastructure to take it to any destination without worry.
One of the coolest developments of EVs has been in the truck world, where the 2023 Lighting Pro was capable of towing up to 5,000 pounds and running on a 240-mile range battery. The newest iteration should only come with more improvements, including Ford’s amazing Co-Pilot360 2.0.
If a new EV is too pricey, consider a used EV.
While a used EV may seem like a more affordable option, it depends on many variables. For example, the average cost of a used EV in July 2022 was $40,714, above the $25,000 threshold that qualifies for a tax credit.
For this reason, you are often better off purchasing a new or used EV that qualifies for the electric car tax credit.
In addition, you will have to factor in things like mileage, loss of range, and wear and tear that could make the difference between a new and used EV even more negligible.
EVs promote sustainable travel and are becoming increasingly affordable, thanks to increased competition and electric car tax credits.
Drivers who decide they can afford an EV and make the switch may absorb a high upfront cost but will save more in the long run through reductions in fuel costs.
While purchasing a used EV may seem like a solid option, you need to balance these considerations with the tax credits and prices of a new EV, which may end up being more affordable.
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