Moving from luxury electric vehicles to affordable and essential vehicles

Learn more about the state of the EV market today and what manufacturers are doing to drive down EV prices and reach different types of buyers.

Who can afford an electric car?

When considering whether or not to purchase an electric vehicle, consider the federal tax credits currently available to electric vehicle buyers, understand your budget, and consider charging options.

The authors of Hearst Autos Research's Car and Driver noted that the average cost of an electric car decreased by 13.4% (from $64,300 to $55,600) between 2019 and 2020. However, for the average household, this decline does not mean that electric vehicles can be considered a major barrier to the clean energy transition.

Henderson writes that these areas are mostly owned by low-income households, creating a bottleneck for EV users and how infrastructure is being built to support them.

Are electric cars more expensive?

Veronica Penny, a climate reporter for The New York Times, found in a 2021 article that while electric vehicles cost more to start, they could become more affordable than gasoline-powered vehicles over time.

He spoke with researchers at the Massachusetts Institute of Technology. He compared the total costs (including upfront costs, maintenance, fuel and carbon emissions) of gasoline, electric and hybrid vehicles. Plug-in hybrid vehicles in many cases cost about the same as natural gas vehicles, while cutting emissions in half over their lifetime. On the other hand, electric vehicles have the lowest maintenance costs per month over their lifetime and produce fewer emissions.

Researchers at the Massachusetts Institute of Technology factored in a federal tax credit when studying the cost of electric vehicles.For eligible markets, the federal government is offering a tax credit for the purchase of an electric or plug-in vehicle of up to $7,500, depending on the model. However, Penny noted that Tesla and General Motors vehicles were not eligible for the loan. It is also important to note that tax breaks are only available on purchased vehicles, not on leased ones.

How are car manufacturers reacting?

The Biden government is urging the US to invest in electric vehicles. The government is putting money into plans through state and local grants and incentives to build a network of 500,000 electric vehicles by 2030.

In the meantime, General Motors (GM) is working with representatives to fill the electric vehicle gap in the country.

While the transition to affordable cars may seem slow at first, manufacturers are working with the federal government to make electric vehicles more widely available.