With rising gas prices and record-high inflation, there has never been a better time to be an electric vehicle “EV” owner. Late last year I purchased my first EV, the 2022 Kia Niro EV and I’ll share my experience with it thus far, but let’s discuss why EVs make incredible financial sense.
A recent report from Energy Innovation shows that most EVs are cheaper than gas cars from day one of ownership, even with a higher purchase price. The research shows that once you factor in the federal EV tax credit plus the total cost of ownership is far lower than comparable gas vehicles. EVs also depreciate slower than gas-powered cars so they are a better investment from day one.
The average American drives 14,000 miles per year in a car with an average fuel efficiency rating of 25.7 MPG. Assuming $5.00/gallon the annual cost is $2,800 per year. Over five years that’s $14,000 for gas alone!
Let’s compare that to what charging costs at my home with the Kia Niro EV. In Fairfax, Virginia, my utility (Dominion Energy) currently charges $0.13/kWh for electricity. The 2022 Kia Niro EV battery size is 64 kWh meaning it only costs $8.32 to charge from 0% to 100%. If I drove 14,000 miles like the average American, it would only cost $420 per year or $2,100 over five years. That’s $11,900 saved over the next five years!
Not only is owning an EV good for the wallet, but it’s even better for the environment. With EVs, there is virtually no maintenance other than wiper fluid, air filters, and tires. Over the next few years, competition and innovation will further drive down the purchase price of EVs dramatically. Just this week, GM announced a $6,300 reduction for the popular Chevy Bolt EV, making it the most affordable EV in the U.S.
My experience with the 2022 Kia Niro EV has been great from day one. The car is super reliable, comfy, and well equipped with new technology and safety features. It may not be as advanced as a Tesla, but the car costs much less and does everything I need it to. I ended up leasing vs buying as our local Kia dealer had a great lease promotion they were offering so it only costs $400/month which is a great value and after three years I can trade it for a better/cheaper EV. Leasing an EV can make a lot more sense depending on your driving situation and for me, it made sense financially due to great dealer terms.
There is a flood of new EVs hitting the market this year and in 2023 and while some may have higher prices, you have to compare them to comparable gas versions and the total cost of ownership. The decline of gas vehicles has been underway since 2017 when sales peaked, and since then sales have declined annually while EV sales have soared.
Like with any big financial decision, you need to always consider the long-term costs and benefits of any decision. Buying a new car right now may not be best for everyone, especially with higher interest rates and high dealer markups due to limited vehicle supply, but EVs are now at the tipping point where they make great financial sense for the vast majority of American households.