Your Next Car: Buying an EV

Your Next Car: Buying an EV

Hello $wanigans! Thanks for checking out the site today. Lately I have been getting more and more excited about buying an all-electric vehicle. Is anyone else with me? Tesla has given the whole industry such a huge push forward that the idea is much more mainstream. But it isn’t just Tesla anymore, other car companies are beginning production and marketing EVs (electric vehicles) and the quality is improving. You may not even know it yet, but maybe you will be buying an EV for your next car too!

My Garage

I must acknowledge upfront that I’m not actually in the market for a car right now, nor am I in need of a new car in the near-term. Some of you may recall my post shortly after I bought my 2015 Nissan Pathfinder. I got quite a deal on that purchase and the car clearly has a long-life ahead of it. Lucy and I drive to work together 90%+ of the time, so we rarely use our second car which is a 2007 Altima which has <100K miles on it. That too will be around for a while.

But that doesn’t keep a boy from dreaming! What once was a dream of buying a new EV is now coming more into focus.

Why Have I Become Obsessed?

In conversation with my boss not long ago, he mentioned how he’s been looking at mid-life crisis cars. He actually readily admitted he is a little passed the typical mid-life crisis age, my guess is he is around 60 or so. While I don’t think he would ever pull the trigger, he’s been talking about Lamborghinis and other super expensive cars. Knowing his background, Midwestern roots, frugal mindset, and history of driving cars 10+ years and into the ground, I think it is safe to say his dream won’t be a reality. It would go against ever fiber in his body to buy a car over $100K.

But in that conversation, I told him how my next car will likely be an EV. He was a little blown away, EVs weren’t really on his radar. I talked to him at length about Tesla, all the models they have out, how they are luxury cars with good traveling range and high safety ratings, battery mileage range, battery lifespan etc. He quickly realized I am a bit of an EV enthusiast.

After that conversation though I can tell he has been looking into Tesla. He keeps bringing it up and asking me questions. Kind of funny, but as he continues to bring it up over and over, it has gotten me more and more interested and looking around the EV marketplace.

Oh the Options!

As I’ve done so, I’ve quickly realized that the options have truly been getting better year after year. The 2018 Nissan LEAF now has a range of 151 miles, up from 107 in the 2017 model. And the 2019 LEAF is expected to have over 225 mile range! That is some real progress. GM has made some similar strides. The 2016 Chevy Bolt offered 53 mile range whereas now the 2018 Bolt offers 238 mile range. This is becoming more and more competitive to the Tesla Model 3 range of 220 miles which is the more price competitive ($35K model) and price comparable to the LEAF and Bolt.

Buying an EV
The 2018 Nissan LEAF

On the Horizon

So much more is on the horizon too. While there are a number of good EV options available today, such as various Tesla models, the LEAF, the Bolt, the BMW i3 (2018 model has 114 mile range), etc; there are a number of new ones expected to hit the road soon. VW is planning to launch 50 different EV models (globally) by 2025 and has also committed to building hundreds of charging stations across the US. Not all those 50 models will be VW branded, of course, as VW also owns Audi and Porsche.

Audi’s first EV will be the E-Tron Quattro which is expected to be released in 2018 in the EU and 2019 in the US. The E-tron is expected to have approximately 275 mile range. Audi expects to then come out with a new EV each year thereafter.

The first two VW branded EVs are expected to be a crossover and hatchback which are expected to be in production in 2020.

Other more near-term EVs include the Jaguar I-Pace (2019 release – 220 mile range estimate), the Kia Niro EV which is a subcompact SUV (2019 release – 200 to 300 mile range estimate), and the Hyundai Kona EV which is a subcompact SUV (2019 release – 242 mile range estimate). Check out this article for more info on future electric cars.

What Does this Mean for Your Wallet? Tax Credits…

The general price point is known for the Tesla models, the LEAF, Bolt, and i3, but still to be determined for the future models coming out. The E-Tron to be released in the EU is expected to go for around 80K Euros which gives us a sense of what it would go for in the US. But let’s focus on the more mainstream, average American price point of the LEAF (~$30K), the Tesla Model 3 (~$35K), and the Bolt (~$37K). Not too shabby when you consider the average industry wide new car sales price is nearing $37K.

The benefit of buying a new EV is the $7.5K federal tax credit. That’s meaningful and definitely something that would be nice to take advantage of. Check if your state also offers a credit or incentive. Colorado for instance adds another $5K credit on top of the federal credit!

The thing to note though is that the federal credit is available on the first 200K vehicles for each manufacturer, after which the credits phase out. There are two manufacturers in particular who are quickly closing in and expected to hit that figure by mid-2018…GM and Tesla.

The thought behind the credit is that once the 200k car threshold is reached that the manufacturer would have enough scale to reduce pricing and remain competitive, but that is TBD. It could be a big disadvantage for those companies who reach it first but we’ll see very soon how pricing evolves.

Ideally, for the consumer, the battery manufacturers continue to generate scale and technological efficiencies while the federal credits remain available for certain car manufacturers. Theoretically, the largest benefit will be received by the consumer buying the last EV under the federal tax credit by the last car manufacturer.

“Fuel” Efficiency

The other big impact on the wallet is “fuel” efficiency over conventional gasoline powered vehicles. Does it cost less to buy electricity for an EV than gasoline for a conventional vehicle? Yes! How much less? About 70-75% less!!

A few years ago, federal agencies came up with the term MPGe, or miles per gallon equivalent, which is a solution to help compare conventional vehicles to EVs. A gallon of gas is roughly equal 33.7 kWh. For me to drive 1,000 miles (about what I drive in a given month) it would cost me $114.22 in my 2015 Pathfinder as compared to the approximate $30-$34 range for the various EVs on the market today. That would provide over $80 in savings per month, or about $1,000 savings in a year!

Buying an EV

My Next Car

With GM and Tesla coming up on their limits under the federal tax credit soon, I may be in the market for a LEAF or one of the forthcoming VWs. Fortunately, besides GM and Tesla, no other manufacturer is on pace (given current run rate) to hit the limit until 2020 at the earliest. Getting an EV for $7.5K off (with the tax credits) while also being a stylish, safe, high quality vehicle from a strong, large manufacturer who will stand behind it sounds like a good deal to me.

I almost forgot to mention, the performance is there too…electric motors provide quiet, smooth operation and stronger acceleration and require less maintenance than conventional vehicles.

All in all, not too shabby. Throw in about $1,000 in savings per year on “fuel” economy savings and it’s a no brainer.

When I do pull the trigger on a new EV, it may be time to get a few more solar panels…:). Getting an EV would allow me to not worry about rising gas prices anymore; and getting more solar panels to power my EV would mean I wouldn’t need to worry about rising electricity prices either. We already know how good of a deal financially the solar panels have been for me so far!

What do you think about EVs? Ready to jump on the bandwagon with me?

Thanks for taking a look!

The Green Swan

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  1. Hi JW,

    Good article on EVs. Dont forget however to figure the cost of battery replacement as a reserve cost into your overall on-going costs. The cost for the battery could very well eat up all of your comparable savings on gas. While most EVs have improved on battery technologies and performance, the battery itself still has a finite life.

    1. You’re absolutely right, battery life isn’t quite comparable to an engine lifespan. Manufacturers seem to offer pretty good warranties which helps. Nissan for instance is offering an 8 year 100K mile warrant, if my memory serves me right. But batteries do lose capacity over time and require replacement.

      As you mention, this would eat into the gas savings. I could be wrong, but I believe battery refurbishing is a cheaper option to outright replacement too. Definitely a consideration that deserves attention though, so thank you for mentioning that.

  2. If I had to but a car, I would consider a EV b/c of the fuel efficiency. I just did a snapshot in my last post of my very last car payment. It is a great feeling to be car note free. So, I say if you buy, then to get something you want and will feel good about as you and your car will be together a long time.

    1. Congrats to you! Always nice to go loan free as long as possible. I’m not in a huge rush to get an EV, depreciation and considerable ongoing technological improvements keep me in the sidelines. But hopefully the credits will still be around when I’m ready to buy!

  3. My husband purchased a Chevy Volt about a year and half ago and we have really enjoyed the car. It is fun to see how many miles we can get out of a single charge and when we do road trips we prioritize slightly slower travel with more stops to take advantage of charging stations. This has made our travel more pleasant because we see more places, get out and move more frequently (something my back appreciates), and each decent food at sit-down restaurants more often. For example, when we were driving back from Colorado last fall we stopped to grab lunch and charge for a couple hours. We unexpectedly ran into a couple friends who had moved away a few years.

    When we are at home I generally live car-free, but I do use this car when I travel for work. I often joke with my husband (who is a big car/technology nerd) that I think vehicles should be less comfortable because then people would want to drive them less! I know people love the idea of electric vehicles, but as anything gets cheaper (such as “free” electric fuel) we tend to use more of it. Therefore, I still prefer my feet and my bike to get around when I’m traveling within our small city.

    Oh, and the tax credit was definitely a large reason why we purchased the Volt. It made it comparable to other vehicles my husband had been looking at. The dealer was also offering 0% financing, which I love and hate because the logical side of me doesn’t want to pay it off faster (while we are both still working), but I also hate having that monthly payment as we work towards FI.

    1. I love it! Good for you folks for being early adopters of the EV movement. And good for you for relying more on biking and walking. What a convenient way to get a little exercise in your normal daily routine.

      I hear you on the 0% interest rate. I was ready to pay cash when we bought our last car but I wasn’t about to turn down a sub-2% rate.

      Thanks for sharing, Heather!

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