Several hundred thousand people (325,000 at last count, to be exact), have signed up to preorder a Tesla Model 3, an upcoming electric car that will cost $35,000 and promises to deliver more than 200 miles per charge. But before you rush out to reserve your Model 3, or buy any other electric car, there are some essential considerations you need to carefully weigh.
"With the introduction of affordable, long-range electric cars like the Chevrolet Bolt and Tesla Model 3, EVs are no longer exotic playthings for wealthy early adopters,” says Jamie Page Deaton, managing editor of the U.S. News Best Car Rankings. “However, there are some hard realities of owning an electric car that may not work with everyone’s lifestyle.” Read on to find out more about what electric car ownership entails, and learn the important decisions you need to make before you buy an electric car.
Do I want an electric car or a hybrid?
The terms "electric car" and "hybrid" are sometimes used interchangeably. But these vehicles have fundamentally different powertrains (which affects range and refueling or recharging), so it's helpful to have a clear understanding of the difference.
Typically, an electric car uses only electric motors to power the wheels, with no added gasoline or diesel engine. Hybrids and plug-in hybrids, on the other hand, combine both an engine and an electric motor. Other names for electric cars include battery electric vehicles (BEVs) and all-electric vehicles.
“Finding a place to charge on the road is one of the major drawbacks of owning a fully-electrified car,” says Page Deaton. “Because they have gas engines, a hybrid or plug-in hybrid car can be a great way for consumers to lessen their carbon footprint without having to worry about running out of charge.”
What do I need to know about the battery?
On an electric car, the "fuel" comes from energy stored in batteries, which must be recharged on a regular basis. These batteries tend to significantly add to the cost and the weight of the vehicle.
Battery size: When people talk about battery size for electric cars, they’re referring to how powerful the battery is, not to its physical dimensions. The power of the battery (which is described in kilowatt-hours or kWh) impacts the range, or how far the car can drive on one full charge. The higher the kWh number, the farther the car can go. There is no standard proportion connecting battery size and range, as driving habits and the car itself have an effect on battery range.
Battery type: Many electric cars and hybrids currently on the market use lithium ion batteries, as this chemistry provides a good balance of weight and available energy. Other common types include nickel-metal hydride, the chemistry of choice for many hybrid Toyotas. For most consumers, knowing the battery type is equivalent to memorizing your engine size: It’s an interesting fact for some, but overall it likely has little impact on your buying decision.
Battery warranty: Similar to how new gas-only cars frequently come with a powertrain warranty covering the engine and transmission, and a separate warranty that applies to most everything else, electric cars come with a warranty package that includes a specific clause for the rechargeable battery. With replacement batteries costing around $6,000 (installed), it's important to know the length of the battery warranty for the car you are considering.
BMW offers an eight-year/100,000 mile warranty for the i3, which matches the Nissan Leaf battery warranty. The Tesla battery warranty is also for eight years, but without the mileage limitations (Tesla calls it an infinite mile warranty).
How will I charge my electric car at home?
While a garage or carport is convenient for parking your car, covered parking isn't mandatory for recharging an electric car. What is required is an outlet of adequate size for your recharging needs and any necessary charging equipment. Note that the equipment list doesn't include the charger itself: The battery charger is already installed in your electric car.
Before you select how you will recharge your car, you need to find out the capabilities of the electrical service currently installed for your home, check what connectors are compatible with the electrical car you are considering, and ask about the capabilities of that car's charger (not all electrical cars are capable of using a high-speed charger). You'll also need to learn the charging equipment codes and regulations for your area.
There are three main levels of home charging equipment – the more powerful the unit, the faster your car will recharge. Basic charging is through a 120-volt outlet, which is the standard household size. Also referred to as AC Level 1 Charging, this takes about eight hours to recharge electric cars to 40 miles of range.
The next step up – AC Level 2 Charging – requires 240-volt service. It recharges about four times faster: Every hour of Level 2 charging adds 10 to 20 miles of range. For even speedier recharging, consider DC Fast Charging equipment. These direct current units also use a 240-volt circuit but increase the amperage for a recharge rate of up to 70 miles in 20 minutes.
Pricing for AC and DC Level 2 equipment starts at around $500 and can exceed $1,000, depending on the equipment you select and local installation costs.
How much does it cost to recharge my electric car?
As you budget ownership expenses for your electric car, don't forget to factor in the cost of electricity for recharging. Instead of miles per gallon, the efficiency of electric cars is measured in kilowatt-hours (kWh) per 100 miles, or how much electricity the car requires to drive 100 miles. For example, the 2016 BMW i3 is rated at 27 kWh/100 miles. The 2016 Tesla Model S 70, in comparison, is rated at 38 kWh/100 miles.
To estimate how much it will cost to recharge your electric car at home, take a look at your electric bill to see how much electricity costs per kilowatt-hour (typically around 12 cents per kWh). At average electrical rates, it will cost $4.56 to drive the Model S 100 miles.
How will I charge my electric car at work and away from home?
When you are running errands or taking a trip, you may also need to recharge your car. Smartphone apps and charging station websites make locations easy to find, or you can check out this interactive map from the Alternative Fuels Data Center.
Public stations may be free of charge, may charge for each kWh, or may charge you by the hour. Some companies offer subscription plans, which may be ideal for frequent users. If you own a Supercharger-compatible Tesla, you also have access to free charging when traveling by using the Tesla Supercharger stations.
To estimate how much it will cost you to recharge when you are away from home, find out what public chargers you may be using and contact them for fees and availability. Some workplaces offer free charging for employees, so be sure to check if this is a possibility for you.
Is car insurance more expensive for an electric car?
If you are trading a gasoline vehicle for an all-electric one, be prepared to pay more for car insurance. According to NerdWallet, insurance premiums are 16 to 26 percent higher for electric vehicles (compared to their gas-only counterparts). That could easily add an extra $500 in annual insurance costs to your budget. An electric car's higher purchase price and steeper repair bills are two of the factors that contribute to these higher rates.
What tax credits are available?
The most lucrative tax credit currently available is the Federal Tax Credit, which gives you a credit of up to $7,500. The funds aren't issued as a check, but are instead applied toward the amount of federal income tax you owe at the end of the year. Consult with a tax advisor to better understand how this credit can impact you.
If you're considering a Tesla, when you buy the vehicle will have a significant bearing on your eligibility for the Federal Tax Credit. Only 200,000 vehicles from each carmaker qualify for this bonus, and Tesla is expected to reach that limit sometime in 2017.
Many states also offer tax credits, tax deductions, and other incentives. For example, Indiana offers free in-home charging for some owners. For more information, contact your state's Department of Motor Vehicles, or check out this list of electric car state incentives provided by the Alternative Fuels Data Center.
You can learn more about the upcoming Tesla Model 3, or compare the Nissan Leaf and other hybrid and electric cars currently on the market. When you're ready to buy, save money on your electric car through our Best Price Program. And be sure to follow us on Facebook and Twitter for more advice on shopping for cars and other money-saving tips.