Electric vehicles (EVs) are gaining popularity due to their undeniable fuel savings. However, owning an electric car comes with expenses that can significantly impact your budget. In this article, we will investigate three areas where EVs prove to be more expensive than you might think.
1. Electric vehicles Tire Budget
One of the hidden costs of owning an electric vehicle is the tire budget. According to the Swedish Transport Research Institute (VTI), about 39% of EV owners, 27% of plug-in hybrid owners, and 15% of hybrid owners experience faster tire wear compared to traditional gasoline-powered cars. The UK’s ATS Euromaster has confirmed this finding, with their CEO expressing concerns about the accelerated tire replacement needed for electric vehicles.
The primary reason for this increased wear is the weight of EVs. On average, electric vehicles are about 20% heavier than combustion engine vehicles with equivalent performance. Consequently, tire wear on EVs is approximately 20% faster. To address this issue, tire manufacturers like Michelin recommend using more resistant and durable tires. However, these specialized tires come at a higher price. It’s important to consider the tire budget when purchasing an electric vehicle, especially considering the significant recent increase in tire prices.
2. Electric vehicles Repair Costs
While tire expenses are significant, repair costs can be even more substantial. In the event of an accident, repairing an electric vehicle can quickly become costly. Experts from Alliance Experts warn that as soon as the battery needs to be replaced, costs start to escalate. Since the battery represents more than one-third of the vehicle’s value, replacing it can amount to tens of thousands of euros. While battery replacements are not common, electric vehicles generally lean towards replacements rather than repairs due to their design and construction.
Moreover, repairing electric vehicles requires more time and expertise, leading to higher labor costs. The hourly rate for repairing electric vehicles is typically higher compared to traditional gasoline-powered cars due to the specialized knowledge and equipment required. Additionally, certain materials used in electric vehicles, such as aluminum, are more challenging to repair compared to steel. These factors contribute to the overall higher repair costs for EVs.
3. Electric vehicles Insurance Expenses
While insurance often covers the majority of repair costs, it directly impacts the premiums paid by car owners. In France, insurance rates for electric vehicles have not seen significant increases yet, as the government requested insurers to moderate their pricing policies in 2023. However, this trend may change in the coming years. The government’s reduction in the Tax on Insurance Policies (TSCA) will end in 2024, resulting in an automatic 18% increase in the cost of insuring electric vehicles, according to Olivier Moustacakis, co-founder of Assurland.
In 2022, electric vehicles required an average insurance premium of €562, compared to €630 for all vehicles. Considering the projected 18% increase, the insurance premium for electric vehicles could reach €663. Moreover, while insurers may initially reduce margins to attract new electric vehicle owners, it is expected that insurance prices will significantly rise for the next generation of vehicles. A recent report by Capgemini predicts that insurance costs for these vehicles will multiply by eight between 2021 and 2030. This poses a significant challenge for the industry, with insurers conducting studies and seminars to understand the potential impact.
As the popularity of electric vehicles continues to rise, it is essential for potential buyers to consider the hidden costs associated with ownership. Tire replacements, repair expenses, and insurance premiums are significant factors that can impact the overall cost of owning an electric car. By taking these factors into account, consumers can make informed decisions about their purchase.