The Average New EV Costs $14,000 Less Than It Did a Year Ago: KBB
thedrive.com
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A $14k drop is great, but what is the average price?
EDIT: $53,469, just shy of a $10k premium over ICE vehicles.
https://mediaroom.kbb.com/2023-08-09-Kelley-Blue-Book-Analys...
Gas is pretty expensive, and some EVs are cheap or even free to charge
How do total ownership costs compare?
A big difference is maintenance though. No oil changes, mechanical issues, etc. Just new tires when they’re worn out and occasional problems.
How are you getting a new Bolt (29K MSRP) for less?
I chose to compare a 2016 Civic with ~60k miles to the 2023 Bolt with ~0 miles. The market price for the Civic is ~18k [0], and the lowest for which you can realistically get a Bolt is the EUV for ~32k [1]. I also considered 12.5k in state and federal tax breaks, which decrease the purchase price of the Bolt to 19.5k.
Here is a cumulative vehicle cost calculator https://afdc.energy.gov/calc/ It makes a graph, from which we can look at the value for year 10.
Add a 2023 Bolt, and a 2016 Civic. Change the price of the Bolt to $19.5k, and the Civic to 18k. Choose your state for energy prices. You may also change the gas price or the number of miles you drive. Click Get Results.
My results are Civic: 52k, and Bolt: 45k. That's assuming that the ratio between gas and energy prices doesn't change in the next ten years.
[0]: The site itself pulls a value of 18,640 from somewhere, but my 18k value came from online listings. My wife looked for these, and I think she mainly used KBB.
[1]: The Bolt EV cannot be purchased, only the EUV. I called about 20 dealerships. After 3 weeks I had gotten several offers to buy vehicles for 32k and higher, but none lower.
Also, a Civic is a much better car than a Bolt, it's a silly comparison to make. You should compare a Bolt with a car with similar features like space, how it feels to drive one etc.
You have no reason to question my motivation, and it's unreasonable to make up possible deficiencies you imagine my methodology might have without even attempting to understand what is there. I provided plenty of information. The link works.
Depreciation never enters into it, nor should it. The model is that you buy the car, drive it for ten years, and then add up how much you spent on everything: The original purchase, fuel, maintenance, insurace, registration, etc. The value of the vehicle at any point after you buy it is irrelevant. You never sell it. It simply ceases to exist at the end of ten years. If you think I should include a sale price in the model, it will not be favorable to the car that sells for 15k less at t=0 and is 7 years older. But I'm not including that, because it's not useful. I'm looking at the cost for driving a car for ten years. When I do, a new bolt is cheaper than a used civic.
The prices are very similar (18k vs 19.5k) after tax break. And the electric one costs a lot less to drive over time, so after ten years you spent less money. It's not complicated, and the math bears it out easily. I brought receipts. Just look at them. Or do it yourself. Or propose your own model.
Well that is not a realistic comparison. Residual value absolutely must be considered in the comparison.
(I don't know which car it would favor, didn't try to research that. But either way, you need to include the residual value in the computation.)
> It simply ceases to exist at the end of ten years.
I mean but of course it doesn't! The car doesn't evaporate. You can sell it after those 10 years and get some money back. It's not realistic to just ignore that.
There are lots of other things not included in the model, too. I would need to pay a contractor to add a 240 outlet to my garage, which will be like $500 since it's next to the breaker box. I will also spend hours of my life waiting for the car to charge during trips over those ten years. I bet people probably underestimate how much that will suck before they buy an EV. I could include a healthcare cost adjustment due to safety ratings, the impact of which I probably grossly underestimate.
I think the biggest omission is change in the gas:electricity price ratio over ten years. Using current values for the whole ten years is a mistake, considering it's the main difference between the options and is likely to change a lot.
edit: also I'm sorry for the tone of my previous post. I didn't mean for it to sound that way.
Depends, but depreciation generally benefits older cars and hurts new cars.
If you buy a Civic that has depreciated to 5-6K, there's not a lot of room to depreciate more. Unless it completely dies, you can use it for a long time and it's still worth 3-5K. Occasionally older cars even go up in value. I bought an Acura for 6K and sold it for 6K almost 15 years later. I bought a Mazda for 3K and sold it for 6K nine years later.
New cars are the worst for depreciation, the moment you drive out the dealer lot it's worth thousands less. And over a few years, the depreciation curve is quite steep until it flattens later. Very brand/model dependent so YMMV.
Ok if that's your starting point your numbers make sense.
Are you sure about 12.5K in tax rebates? Sounds high. My partner just bought a VW EV a few months ago and didn't qualify for a single penny in rebates.
So for me the comparison would be Bolt at full $32K vs. a $6-$8K Civic since I like to buy cheaper used cars.
For the federal credit, only some EVs qualify, and the list changes each year. You also have to have a tax burden within a certain range. The credit for used vehicles has different requirements, too. Starting next year, you get the rebate back as cash from the dealership at the time of purchase, which is nice.
My state offers a 5k credit for new EVs costing under 80k with no other strings. Next year they're adding 2500 more if the cost is under 35k.
> So for me the comparison would be Bolt at full $32K vs. a $6-$8K Civic since I like to buy cheaper used cars.
A no-brainer at those values, for sure! The last vehicle I bought was a 6 year old Focus for $7k. Because my family has changed since then, I was looking at used cars in the 15k range instead of under 10k
I would never have even considered a new car if the tax credit hadn't pulled the Bolt down into a range that made it competitive. All of the other EVs either cost too much initially, or didn't qualify for the credit. Also a lot of them had really small driving distances on one charge, which surprised me.
Another thing I found surprising, was that some people purportedly purchase a new EV each year for the tax credit. They drive it for a year, and sell it next year at a small profit. Market liquidity not totally accounting for the credit value (varies by model). I am far too risk-averse to do such a thing.
I already own an EV and can't cash in retroactively on the latest government incentive without purchasing another. But I could probably find some loop hole and sell my used EV to my neighbor, then buy my neighbor's identical EV and we both qualify. We don't exchange any money, but each file for some thousands of dollars from the government.
If the government lets even the purchase of used vehicles qualify, and lets you qualify, say, once a year... my neighbor and I can just keep trading cars every year and get paid.
But that doesn't seem to be any valuable way to calculate TCO.
> Beginning January 1, 2023, if you buy a qualified used electric vehicle (EV) or fuel cell vehicle (FCV) from a licensed dealer for $25,000 or less, you may be eligible for a used clean vehicle tax credit (also referred to as a previously owned clean vehicle credit). The credit equals 30% of the sale price up to a maximum credit of $4,000.
They have to be a licensed dealer, and the benefit is a portion of the sale price.
How are you charging an EV for free?
I know some employers offer that, if you have a sweet deal like that I get it, but that is not the norm.
Here in Silicon Valley with daytime electricity being 73c/kWh thanks to PG&E, charging is pretty expensive too.
I can't find anything close to that on this rate sheet (current as of June 1, 2023: https://www.pge.com/pge_global/common/pdfs/customer-service/...
I'm on the EV2A plan. The numbers on that website link are not what they charge on the actual bill. I don't know why they are allowed to publish fake numbers.
Here are the exact numbers from my October bill:
Peak rate: 58.4 delivery + 14.8 generation = 73.2 c/kWh
Part peak: 47.4 delivery + 8.3 generation = 55.7 c/kWh
Off-peak: 27.2 delivery + 7.1 generation = 34.4 c/kWh
Maybe because there are so many EVs in norcal that businesses can't afford to make these free.
I'm guessing this doesn't account for the fact that you'll have to buy a new one every 5 years when the batteries go bad.
I see it all the time on Facebook and I’d love to understand what drives people to spout misinformation about EVs. Cobalt, fires, diesel powered charging stations, they simply can’t wait to spread some nonsense.
> Tesla Battery Life
> How long does a Tesla battery last? The data shows that a typical Tesla battery will last in excess of 10 years. We say this with some degree of confidence because even the 10-year-old batteries were still delivering around 80% of the original range.
> Tesla Battery Replacement Cost UK
> The team at NimbleFins has made some calls and been given ballpark figures to get a Tesla battery replacement starting from £8,000 plus labour (from one Tesla repair centre) and £10,000 including labour (from an independent repair shop). We've heard some readers think the figure could be even higher.
https://www.nimblefins.co.uk/study-real-life-tesla-battery-d...
My Tesla costs 3p/mile to run with sentry mode on etc. If we generously say that a diesel would be 12p/mile the fuel savings over 120,000 miles would cover the cost of a new battery. Assuming 80% isn’t enough at that point and that battery costs remain the same. Lots of variables in there of course.
I would guess the premium is closer to $5K, the difference from the $48K ATP for all transactions. Those are 90%+ of all transactions.
I mean, that's the comparison that matters to most people. The vast majority of cars are not luxury cars. Just because EVs target a little up-market, that doesn't exempt them from the reality that they're being compared to ICE cars in lower price categories by most buyers.
It has precedent too, solar panel incentives, home building incentives etc. When government grants show up, vendors can take it into account if they want. If enough of them do, the market price has changed and so everyone can put their prices up. They are in a market that is not racing their prices to the bottom to drive demand so it works out.
Why does one need to present strong evidence that prices will rise by $7500 when the demand curve suddenly shifts right by $7500 due to government intervention? Surely this is just Econ 101.
In any case, EV prices have been dropping over recent years, and I haven't seen a $7500 bump in prices, just in more people being willing to go for a nicer vehicle instead.
If people want 100 units of something, and 5 competing manufacturers can only produce 90 units total (and can only expand to, say, 110 units in a "short" timeframe), offering subsidies doesn't reduce the price.
If the government creates a demand shock, it doesn't matter how much competition exists in the market. They don't need to collude for prices to go up.
Look at what happened to toilet paper during Covid. Were Walmart, Amazon, McMaster and Grainger all colluding on toilet paper prices? Or was there a demand shock?
> In any case, EV prices have been dropping over recent years, and I haven't seen a $7500 bump in prices, just in more people being willing to go for a nicer vehicle instead.
All car prices have been dropping because we're getting past the Covid supply shocks. And if you go back farther, EV price drops are mostly the result of introducing new less-luxurious models (the current base Model 3 still costs more than the first RWD Model 3, and it has been decontented--missing features like parking sensors).
2. Manufacturing costs do not increase when subsidies are introduced. EVs, as a result, have higher profit margins. Therefore, this will result in enticing more firms to enter a more lucrative market, resulting in more EV sales, which really, isn’t that the goal of subsidies in the first place?
Look at how long it took Tesla to build the Shanghai gigafactory: About two years--and literally everyone who knew anything about auto manufacturing said it would be literally impossible to make that timeline when Tesla announced it in the beginning. People made jokes about it. Oh look at that! Elon Musk is lying again! Hurhurhur.
I mean, why do you think the Model S had zero competition for over 7 years? The first 2 years I understand--everyone thought EVs were a dead market. But why did Mercedes, BMW, Audi, et. al. wait the other 5 years (while Tesla was absolutely destroying their market share in the US) to bring out a competitive product?
Was it because they're a bunch of dumb-dumbs?
Or was it maybe because it takes many years to design a complex product like an EV and build a factory to build the car?
How will they do that? Every one of them is production-constrained right now.
> Manufacturing costs do not increase when subsidies are introduced. EVs, as a result, have higher profit margins.
Now you're getting it!
> Therefore, this will result in enticing more firms to enter a more lucrative market, resulting in more EV sales, which really, isn’t that the goal of subsidies in the first place?
Sure, but it takes 5-10 years to design a new EV and spin up a plant. Will the subsidies still exist by then? (Probably not, because we are in the exponential phase of the EV adoption curve, so the subsidy will quickly become unsustainable).
I don't know about Ford, but most other major companies are only "losing" money because they have started a new vehicle platform and need a year or two to get the development costs back. Compared to previous CE platforms they are actually doing much much better.
Most people finance a purchase like cars are paying it over 6-7 years. Today looking at gas prices the fuel cost saving can be anywhere between $100-300 a month depending on how much you drive where you charge. So even if an electric car that is 10k more expensive than ice is actually still cheaper today for a lot of people if you look at monthly expense. And each year it gets cheaper for more people to go electric as electric cars get cheaper. This is going to accelerate the price drops are too rapid for most people to understand cost analysis research from 2 years ago might no longer be valid today and today cost analysis wont be valid in another 1-2 years
To carry stuff, I am looking at the 2023 hybrid Ford Maverick, a double-cab small/medium sized pickup truck goind for $22.6k starting msrp...which clocks in as the cheapest hybrid vehicle on the new market. 42 city 33 highway mpg.
I applaud these more modest and affordable entries into the fuel efficient market.
I got a golf thinking I’d rent a pickup when I need to carry something big, but so far haven’t come across anything that required it.
Trucks are useful but I do wish shared ownership were more convenient, because a ton of miles driven in trucks are not for any of those uses.
Pickup are useful for projects. Recently redid a fence, bought over 2000lb of lumber.
These weekends doing concrete walkway work, bought ~3500lb of concrete bags in one trip (way more than the weight of my commuter car!)
Of course if you only do that once a year and do nothing else, it's not worth having a truck. For me, I pick up things couple times a month at least and also use it for towing a travel trailer (which you often can't contractually do with many rental trucks).
Just the time it takes to drive to the store, get that loaded and secured, delivered, offloaded etc. You're already at the 1-2 hour mark. Now the labour, cost of all those calories you burnt. Makes my brain hurt even thinking about the waste.
Small projects for a tiny suburban house. A pallet of cement isn't that much, only about 10ft of walkway.
> Just pay the 20/40/100$
See above. Delivering a ~$300 pallet costs $200.
> daily driver
Certainly not a daily driver. It's a truck for projects and towing.
You’re also going to have to adjust for profit margins of car manufacturers back then to now, as surely productivity (use of labor and resources through automation) have allowed for them to do more with less materials.
The inflation calculation is also an average and stuff like cars made with steel might have more inflation due to scarcity or cost increases of making steel.
Then I’d say whatever left over is the actual increase in cost of making a car now vs then due to added functionality (including R&D for cars to be safer or more fuel efficient). Although maybe someone else can point out if I’m missing something else to consider.
And the “around 30k msrp” they quoted is so far a wish and dream. Chevy already dropped the bottom trim of their other new EV because they didn’t think it was profitable enough.
From a EU perspective that vehicle is nowhere near the "small/medium" scale, even for a truck.
I recall watching some documentary about a guy who tried driving from the US to Brazil or something and cross some jungle. At some point he had to rent a car and all he could get his hand on was a Toyota Land Cruiser, which he immediately dismissed as being a small toy SUV barely any good for dirty roads and should be kept for suburbs.
> goind for $22.6k starting msrp
Is that because it's a truck? I seem to recall there's this weird US thing where trucks are on the cheap side because of whatever law or something.
Although I'm still seeing $15K of "additional dealer profit" stickers at a Jeep/Ford dealer in Silicon Valley.
Stellantis dealers are flush with inventory right now and it's a buyers market if you're interested in any of their products.
They have been doing it for over a decade. (Probably since they were selling buggies or whatever.)
Just go somewhere else.
Dealerships may not be the _most_ contemptible rent-seekers in our society but they're up there.
Not just exhaust pollution eliminated but because of regenerative braking there is far less PM2.5 brakepad dust flying around at intersections.
Just like banning leaded gas in cars improved health for the next generation I think 51% EV will do similar.
https://www.theatlantic.com/technology/archive/2023/07/elect...
That has no relation to tire wear rubber dust.
It's not controversial that a heavier car that accelerates faster will wear out tires much faster (thus generate more rubber particles into the air).
Sure, EVs generate way less brake pad dust. But that's a tiny contribution to pollution. Brake pads are tiny compared to tires and in over 100K I've yet to wear out the brake pads on my ICE minivan but I've changed tires three times.
Tire particles are relatively heavy and don't stay in the air, unlike smaller molecules and emission from combustion.
If weight was a real concern, non-business pickup trucks and large SUVs should be banned regardless of the engine they use.
Depends on where you are. I'm in Shenzen right now and it's very close or at 50%. There are definitely more new electric cars than ICE cars on the road. For example, 90% of my Didi (China's Uber) rides have been electric cars.
I believe all of the city's buses are electric as well. Some people drive motorbikes here and they're all electric.
The difference in air quality between today and 6 years ago when I last visited is huge.
Something that depresses me is that a 1988 Honda CRX HF did 50MPG. Yes, 1988. Thirty-five years ago.
That's with extremely primitive engine management. If society had continued improving that line of development, I bet we'd have 100MPG cars today.
Instead, things went in a direction of extremely heavy cars which means much worse mileage.
Depends on the country. Also: not a chance for most of them. Main reasons:
- EVs are significantly more expensive
- There's no charging infrastructure to speak of in most countries
The point of the article is how that's quickly going to no longer be the case
> There's no charging infrastructure to speak of in most countries
Solvable in single-digit numbers of years, even the US which is a sloth at building infra is doing fine scaling up its charging and distribution network
US is much faster than, say, Sweden. And "single digit years" brings us to 2030 at least if the pace picks up.
I live in a Stockholm suburb [1]. In the past 4-5 years the number of charging stations remained at 20, and all the new construction in the vicinity has 0 parking spots fitted with chargers as developers claim it's too costly, and existing infrastructure doesn't permit it.
[1] No, it's not a US suburb. It's a European suburb with high-rise/multi-story apartment buildings, and new construction also being mostly multi-story apartment buildings. Thinks this: https://www.google.com/maps/@59.2775628,17.8994667,3a,75y,20... and not the American cul de sacs
Even the brand new districts like https://www.google.com/maps/@59.3066523,18.031298,3a,75y,152... have essentially zero charging stations in their underground parking lots.
We need to get cheap EV lease offers back out there if we want folks to keep switching.
If you enumerate the ICE cars for sale, the mean and median is much higher than 30k, yes.
If you enumerate the cars purchased in a given year (and ESPECIALLY if you include used cars), the median price paid for a car may be well under 30k.
$30k is a lot of money for sure. But it does not get you much car these days, new or used.
The mean price of a car, like the mean price of a house, is much less meaningful than the median.
I do wonder if the manufacturers are leaving the door open for Chinese manufacturers. They may come to regret this policy.
Gas systems also degrade over time - MPG drops with the life of a vehicle, and it's not actually clear that behavior is much different from battery range loss...
But I have a 14 year old Honda Fit. Its MPG has not dropped at all over time. It has needed nothing but wear-and-tear maintanance and new spark plug coil things. 190k miles. Gas prices vary, but I have a car already, and it seems at least questionable that it is more environmentally sound that this vehicle remains in use till its true end of life. I am not particularly motivated by money, but I can buy a lot of gas for the cost of a new vehicle, so the cost argument feels weak.
That's incorrect. Not sure where you heard that.
MPG drops, sure, but it's so little it's hardly worth measuring. My intra-city full-tank range on a previous petrol car I owned went from (when almost new) ~800km to (350000km later) ~780km.
No repairs other than services. The other cars I've owned show no measurable difference in range as wear increased.
That is not true.
As a fan of older used cars, I would notice. It's not true.
Sure, you might say the average price is skewed by people buying expensive trucks. But even Camry costs like $35-36k after dealer markups - you can get Tesla model 3 for like 32k now after federal rebate.
Also, concerning the lower end of sales:
"But the news isn’t all good. Only one car sold for an average price under $20,000 last month. The Mitsubishi Mirage’s average transaction price in July was $19,205.
Every other car with a list price under $20,000 sold for over $20,000 on average. It’s not a large group. Automakers increasingly focus on building more expensive cars, trimming affordable models from their lineups. In December 2017, automakers produced 36 models priced at $25,000 or less. Five years later, they built just 10." [1]
[1] https://www.kbb.com/car-news/average-new-car-price-sees-smal...
But for the other part they track luxury at the model level. If you get a jeep or truck that cost $50k-80k because you wanted heated/vented seats, a panoramic sunroof, etc then it's not included in luxury.
I think part of this is also inflation (seems like some sensational journalism dor modt of the articles I found - using average instead of mean and not using inflation). Inflation from December 2017 to December 2022 would mean a $20k car in 2017 would cost $24k in 2022 adjusted for inflation. That's a huge jump.
I make six figures, never bought a new car in my life and don't ever plan to. Most I've paid is $19K.
If batteries drop in price, even like 20%, a "rebuilt" used EV could be incredibly cheap as its operating costs and risks of drivetrain failure could be incredibly low. Coupled with reduced energy costs if charging gets ubiquitous for non-homeowners, it could be really nice.
I bought two cars new, and with all the recalls and factory defects, (and ignoring price and depreciation) they were way worse than the used ones I’ve had experience with.
[1] https://www.coxautoinc.com/market-insights/estimated-monthly...
[2] https://www.coxautoinc.com/news/cox-automotive-forecast-augu...
Yes, I'm in your demographic. Most I've ever paid for a car (a rare new one) was 20K. Nearly every car I've had (in over 30 years of having cars), I've bought for less than 10K.
I like cars and driving. But cars are a depreciating asset. Never worth spending much on. Buy the cheapest used one you can find.
Do not mistake the word "most" for "all", unless you want to muddy the waters.
7-year loans, now... that's new.
But cars also last longer as well as costing more so... eh. I don't know what to make of it.
So no, they cannot. "Most" Americans are paying for a car based on what monthly payment they can afford, and never thinking about how much they actually owe.
So yes. Most Americans can afford this.
Easily.
That's.... crazy!
Car loans should be no more than 3 years.
But really, to be responsible, only ever buy a car with cash on hand. If you need a loan, find a cheaper car until you don't need a loan.
Once I bought a car with a loan but only because the manufacturer had a 0% interest offer.
In the UK there's MG4 that is a surprisingly decent BEV for £27K (that's a price without grants/incentives), but it probably won't be available in the US, since it's a Chinese-owned brand.
Tesla you do online, and many people are shopping specifically for an EV, not going to a random dealer and considering it as an option alongside ICE vehicles.
Lots of great, reliable gas options under 25k.
When there are EV choices at reasonable prices there will be tons of demand for them.
It used to be not a huge deal to me charge on a road trip, a 20-30 minute break every few hours was actually really nice. But now, after the release of the Mustang, Ioniq 5 and EV6, I am regularly find chargers to be full and having to wait. My 30 minutes stops have turn to 45-60 minutes or longer because now I'm charging closer to 100% because I might need to the option to skip the next charger. And forget trying to take a road trip on a holiday weekend.
Now, I can't really say that because it's not nearly as easy to charge away from home now and it can significantly extend your trip times.
I regularly (something close to annually) drive a two day, 1000 mile road trip. The last time I did it was where I encountered this. The way the trip works out as planned is a 10 hour day and an 8 hour day, including charging. More than an hour extra was added both ways in waiting times. That extra time was purely spent waiting for chargers.
I've also had time where I was unable to charge my car at home or just had a particularly busy day where I needed to charge locally. There are 3 fast chargers equidistant to me but all in different directions. I ended up waiting 45 minutes.
The problem is that you can't just go a few blocks away (if not across the street!) to the next station if they are full like with gas stations, you're pretty much stuck waiting where you've gambled on stopping.
I'm not going to recommend my dad deal with that.
But it's a very practical problem right now for people with EVs and can be a significant factor in reducing the desirability of EVs. I'll say that charging was my #1 complaint when I leased a Chevy Bolt for a year. Chargers(in the bay area no less) were often broken, expensive, or required me to return to the charger(i.e. in the middle of dinner) to disconnect and move my vehicle.
The article paint a picture of a broad industry trend, when I think it’s really mostly probably just one particular EV
The US government's policy of "encouraging" countries to sell their crude in USD (in a "nice country you've got there, shame if something happened to it" way) keeps them in effective control of the price of oil. The last time someone tried to sell in Euros instead [0], the US DOD spent more than $1,000,000,000,000 [1] proving their willingness to back up that threat.
[0] https://www.theguardian.com/business/2003/feb/16/iraq.theeur...
[1] https://en.wikipedia.org/wiki/Financial_cost_of_the_Iraq_War