To help bring the costs of lower-polluting EVs in line with the costs of higher-polluting gas-powered vehicles, the $740 billion Inflation Reduction Act signed this week by President Joe Biden includes rebates for buying electric and hybrid vehicles — and for buying solar panels that can help to power those EVs.
As more people consider the switch, we compared ownership costs for EVs vs. traditional cars and answered common questions about plug-ins posed by Southern California News Group readers.
What rebates are available now if I buy an EV?
Electric vehicles tend to cost about 50% more up front than comparably sized gas-powered vehicles. The base price for a 2023 Nissan LEAF is $27,800, for example, vs. $19,950 for a 2022 Sentra. But that’s before the new rebates are factored in.
The Inflation Reduction Act includes tax credits of $7,500 for new EVs, plus $4,000 for used EVs and partial credits for hybrid vehicles. That alone would take the LEAF price down almost equal to the Sentra.
There are some at least temporary catches. Under a last-minute deal hammered out in the Senate to boost domestic manufacturing, the only EVs that qualify for a rebate are those with “final assembly” done in North America. The Department of Energy this week put out a list of 31 models that so far qualify. Most are American brands, such as Ford, General Motors, Jeep and Lincoln, but some international brands with North American manufacturing plants also qualify, including models from BMW, Volvo and Nissan’s LEAF.
There’s also still a cap — 200,000 units — on the number of EVs any manufacturer can sell that qualify for those tax rebates through the end of 2022. Tesla, Chevrolet, GMC and Cadillac have already reached those caps, so federal rebates on their vehicles aren’t available right now. But after Jan. 1, 2023, the Inflation Reduction Act lifts those caps.
That likely will cause a lot of EV price shifting in coming months as new vehicles get on or drop off the rebate list, noted Marty Bradley, an engineer who lectures at USC.
California, through a state program called the Clean Vehicle Rebate Project, also offers its own rebates of up to $7,000 for a longer list of new and used EVs and hybrids. An online calculator can help Californians estimate what their rebate might look like, with rebates for many middle-income households falling closer to $2,000. Of note: Teslas also aren’t eligible for those incentives due to recent price increases, per the state.
Most EVs purchased in California can also get $750 knocked off the purchase price through the California Clean Fuel Reward program. That credit expires Sept. 1, though it’s expected to come back by early next year as new funding becomes available.
And for Southern Californians buying or leasing used EVs, Southern California Edison also offers rebates of $1,000 to everyone and $4,000 for low-income residents.
Once available rebates are included, that new LEAF would actually wind up costing a couple thousand dollars less than the Sentra — so long as the buyer can pay full price up front and wait for tax credits to kick in. Starting in 2024, there will be a way for car buyers to transfer the federal rebate to dealers at the point of sale, so it can directly reduce the purchase price.
What sort of equipment and power is required to charge an EV at home?
When it comes to charging, there are a range of options and accompanying costs depending on how fast you want to charge the vehicle and what systems you already have available in your home.
Most EVs actually can be charged by simply plugging them into any standard, 110-volt home outlet, noted Carter Prescott, director of electrification for Southern California Edison. But charging that way, with what’s called a Level 1 charger, could take more than one day to fully power the vehicle.
That’s why most EV owners in single-family homes opt to install Level 2 chargers, which require 220 volts of power and can fully charge most EVs in several hours.
If your home already has an open 220-volt outlet available near where you park your car, say for a clothes dryer, you’d just need to get the charger, which comes with some EVs or can be bought separately for $500 to $1,000. Then you can plug it into the wall yourself and start charging.
If you don’t have a 220-volt outlet handy, you’ll need to hire an electrician to install one, which Prescott said might run anywhere from $250 to about $1,000.
If we go back to the LEAF vs. Sentra battle, buying a Level 2 charging station and hiring someone to install it would likely wipe some of the savings from the EV rebates and bring the cost of both vehicles close to even. But once the vehicles are purchased and charging is handled, that’s where the real advantages for EV owners kick in.
How much does it cost to charge an EV at home overnight? Won’t my electricity bill spike?
Most utility companies, including Southern California Edison, offer special rates for all electricity use, including EV charging, during non-peak hours. That’s anytime other than 4 to 9 p.m.
Edison’s current off-peak rate for EV charging is 21 cents per kilowatt-hour. Based on that rate, drivers could fully charge a 2023 Nissan LEAF for about $8 and drive for 111 miles. With the average driver going roughly 14,000 miles a year, that would mean the LEAF driver’s electricity bill might jump up by about $80 a month.
To travel 111 miles in the comparably sized, gas-powered Nissan Sentra, it would cost about $17 with today’s fuel prices. That’s nearly $180 a month based on average driving distances. In a year, that means the Sentra owner would spend $1,100 more than the LEAF owner to power her vehicle.
If the price of gas goes down (and in recent weeks it has fallen nationally and in California) that EV price advantage could narrow. Prescott, with Edison, simplifies the equation by noting that charging an EV at non-peak times is roughly equivalent to paying under $2 a gallon for gas — something that will likely never be seen in Southern California again.
During peak times, however, charging costs from Edison double, which would essentially wipe out the EV savings. To avoid that, drivers can use programs available through their EV or smart charging systems to schedule juice to start flowing only when peak hours are over, even if they’re not awake or home.
Many homeowners opt to save even more money by installing solar panels at home. While those systems can make EV charging essentially free, they can cost thousands or tens of thousands of dollars up front. But they also save on other home energy costs. And the Inflation Reduction Act includes tax credits to cover 30% of costs to install solar panels and battery storage systems, while Edison also offers incentives for solar installation.
What about the cost to charge at public stations? And are there enough of them? I’ve still got range anxiety…
Though there’s a wide range of options, public EV charging stations are typically more expensive than overnight charging at home — especially if they’re Level 3 stations, which can fully charge vehicles in under 30 minutes. Public stations can cost from 25 to 70 cents per kilowatt-hour. In the middle of that range, it might cost $16 to fully charge a LEAF — almost the same as you’d spend on gas for a Sentra to travel the same distance.
Some apartment complexes, office buildings and shopping centers offer free or reduced EV charging. Also, some companies offer subscription charging services with reduced rates, free charging on certain days, or free charging if customers watch ads.
A growing number of apps let EV drivers shop around and map out their route to find the best charging options. And while there are still major geographic gaps, and issues with some public stations not being maintained, public and private money is being funneled into expanding the national network of public charging stations.
“The public charging networks are improving, but charging that way is relatively expensive and unreliable,” Bradley said. “Except for the Tesla network, the EV car charging stations are not good enough yet to support cross country (or California L.A. to San Francisco) driving.”
What about maintenance, repairs and insurance?
The rule of thumb is that maintenance is significantly less expensive with an EV, while repairs and insurance cost a bit more. And, Bradley said, EVs should be more reliable than gas-powered cars because “they have fewer complex and moving parts.”
EVs don’t need oil changes or frequent brake pad replacements, for example. Most don’t have a multi-speed transmission or moving pistons and the associated complexity. And most EV “maintenance,” Prescott noted, comes in the form of technology upgrades, much like upgrades to a cell phone or laptop.
If the electric components, such as the electric motor or batteries, do have a problem, then Bradley said you might pay more for a mechanic, as they require additional training and are harder to find. But while batteries themselves are pricey, running as much as $10,000, Bradley noted they’re designed to last seven to 10 years and have warranties of similar duration.
As for insurance, an analysis by Forbes found it generally costs about $100 more a year to cover an EV. Janet Ruiz with the Insurance Information Institute said that’s generally just because EVs cost more to buy and repair, a factor that insurance policies are required to consider. Otherwise, the Insurance Institute for Highway Safety says its reviews are finding EVs to be “as safe as or safer than gasoline- and diesel-powered cars.”
Over five years, an online calculator from AAA estimates a LEAF owner would spend $5,544 on maintenance and repairs while a Sentra owner would spend $8,173. And the calculator has insurance rates nearly flat between the two vehicles.
So, will I save money in the long run by having an EV?
Many factors play into this equation, from the type of vehicle you buy to gas prices. But in general, AAA estimates a LEAF owner will spend $40,754 over five years on everything from the purchase price to fuel and maintenance, while a Sentra owner will spend $52,868. And that’s without factoring in EV incentives.
“An EV is not for everyone,” Bradley said. “But, as future batteries and the charging network improves, an EV will be the best choice for more and more people.”
But are EVs really even better for the planet? Doesn’t the electricity to charge them mostly come from carbon-powered plants?
“Most stories of EVs being worse for the environment are fake or biased articles promoted by pro-fossil fuel groups,” Bradley said. “California has a pretty clean electrical grid, with a lot of wind and solar power, so that is very good for EVs.”
Edison gets nearly half of its energy from non-carbon sources now, Prescott noted, and that ratio is increasing each year.
Tesla said as of last year all of its Superchargers stations were powered with renewable energy, and other public charging companies also are promising to soon use entirely clean energy.
Worries about the impacts of making new EVs and some cost concerns can be partially offset by buying used models. And, of course, the best way to save money and the environment is to simply drive less, no matter what you’re riding in.
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