Electric Vehicle Basics

Electric Vehicle Basics

By D.S. Mitchell

Worth Looking Into

The financial benefits of owning and driving an electric vehicle play out in the long run. To begin with, you’ll spend a bit more on the purchase price for an electric car, but you can make up for that cost with tax benefits and immediate savings on fuel. There are also local rebate options worth checking into. Electric vehicles are also really good for the environment, which is enough to convince buyers.

1.) Purchase Price: Government subsidies to off-set the higher sticker cost of an EV versus an ICE (internal combustion engine) are helping purchasers switch from a gas powered vehicle to an electric vehicle. Currently, tax rebates and auto maker incentives provide about $7,500 toward the purchase price of an EV. EV costs are continuing to drop, and Bloomberg has predicted that EV battery costs will halve by 2025. At which point electric and gas vehicles should be at price parity. A couple things to keep in mind about the EV tax credit include:

• Tax credits are for owners only.
• The federal tax credit is not available to those simply buying an electric car in order to resell it.
• In order to qualify for the federal tax credit, the electric car must be mostly used within the U.S.
• The manufacturer must be qualified for your car to be eligible.
• The battery of the EV must be able to store at least 4 kWh of energy.
• The battery must also be able to be charged by an external energy source.
• An electric vehicle tax claim can be denied, the IRS always has that right.

Other tax credits, especially state and local, for electric cars apply to businesses. Sometimes, a business can enjoy tax exemption status of some sort as reward for owning an electric company car.

2.) EV Home Charging: Currently, average charging time is four to six hours, with most charging taking place at home, usually overnight. *You will need to have an electrician install a dedicated 240 volt garage charger. The average cost for such installation is about $1,000.

3.) EV Charging on the Road: There are more than 20,000 EV public charging stations across Canada and the United States. More than half are free to use. Go to Alternative Fuels Data Center for a map of EV charging stations across the United States.

4.) How Far Can I Go On A Charge?: The best EV  can go 200 miles on a charge. The range is increasing steadily but will probably top off at 300 miles to a charge. To increase mileage per charge would need a heavier, more expensive battery. In addition to higher cost, bigger batteries require longer charge times. Keep in mind, the average person drives less than fifty miles a day.

5.) Is the Electricity Green: When charging your EV at a charging station you will not know if the electricity is the renewable generation. Power companies draw electricity from the grid and then pool it. That power originates from many sources. If you want to be sure you are driving with “clean juice” you will need to generate it yourself at home, via roof top solar panels.

6.) Pure Battery, Hybrid or Plug-In Hybrid?: Hybrids use electric motors to increase overall fuel efficiency and never need a plug-in. Plug-in hybrids go 30-40 miles on battery power alone, and 300 miles or more on gas. The pure battery EV version is expected to dominate the market within a relatively short time and that is the goal.

Sources:

Jim Motavalli, EDF Solutions (Vol #49 Fall 2018)

Stephen Leahy, Today magazine 9/13/2017

*Reda Cherif, International Monetary Fund

*Tony Seba, Stanford economist

Shanti Menon, EDF Solutions (Special Report, Summer 2021)

U.S. Highway Department

U.S. Census Bureau