Does Buying an Electric Vehicle Make Financial Sense for You?
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Here's your Money Briefing for Monday, March 14th. I'm J.R. Whelan for The Wall Street Journal. Did your last visit to the gas pump make you cringe? Americans fed up with rising gas prices might be giving more thought to buying an electric car. But there's a lot more to consider than just the cost of refueling.
If you're talking about the cost just to make the switch, you're going to have to consider, are you installing a charging station at home? Because that can add a few thousand dollars to the price. You have to think about your electricity bill.
On today's show, it's gas cars versus EVs. We'll size both up with our reporter Rachel Wolf and find out if it makes financial sense to make the switch. That's after the break.
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As gas prices approach record levels, some people are not only rethinking their driving habits, but also whether it might be time to ditch gasoline altogether and buy an electric vehicle or EV. But does it make practical sense to buy an EV just to save on gas?
Are rising gas prices prompting Americans to consider buying an EV?
WSJ reporter Rachel Wolf looked into it, and she joins me to discuss. Hey, Rachel, thanks for being here.
Thank you so much for having me on.
So Rachel, most newly sold cars are still gas powered, but the demand for EVs is growing. So what does that mean for people who might want to buy one? And what's that like right now?
So it's hard to buy any car right now, but some auto experts say that it's especially hard to buy an EV. So you'll likely face long wait lists for a Tesla. That could mean anywhere from a few months to a year.
Why are they so hard to find?
One expert I spoke with from J.D. Power said that EVs are particularly hard to find because the total aggregate number of them is so small. They make up a relatively small share of the market. That share is growing, but as it stands, there are relatively few necessary parts and specialized laborers needed to produce electric vehicles.
So let's say you found one and you're ready to make a purchase. How does the base price of an EV compare to a car with a gas-powered engine?
So the base price of an EV tends to be more similar to your average luxury vehicle than to, say, a standard sedan. So Kelley Blue Book has the average transaction price for an electric vehicle around $63,000. And that data is from January 2022. And that's about $15,000 higher than the overall industry average in total, which includes gasoline-powered vehicles, hybrids, and EVs. And the overall industry average is about $46,000. So you have EVs, which are about $63,000. You have luxury vehicles, which are about $65,000. And then you have the normal overall price for any car, which is about $46,000.
Now, we often hear about tax credits involved with the purchase of an EV, you know, to help bring the price down. How do they work?
So tax credits are great when they're available, but they are not always available. So federal credits of as much as $7,500 are available for only the first 200,000 EVs sold by a given automaker.
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