NerdWallet: Why EVs are still so expensive, and when you can expect them to get cheaper

by | Dec 7, 2022 | Stock Market

This article is reprinted by permission from NerdWallet.  You might want to buy an electric car, but the price gives you a severe case of sticker shock. It leaves you wondering, “Why is the cost so much higher than gas cars?” For example, the cheapest 2023 gas-engined model vehicle available in the U.S. is the Nissan
Versa at $15,730 plus destination. The cheapest EV is the Chevrolet Bolt at $25,600 plus destination.

That price difference is pretty easy to attribute — it’s the large, costly battery that takes the place of an internal combustion engine in an electric car, or EV. A lithium-ion battery that provides ample driving range can cost $10,000 to $20,000 alone, according to Karl Brauer, executive analyst for car search engine site iSeeCars. But there are other factors driving up the price of EVs, says Liz Najman, a climate scientist and communications and research manager at Recurrent Auto, an EV research and analytics firm focused on the used-vehicle market. She cites continuing supply-chain problems, low inventories and the fact that EVs require 10 times more semiconductors than a gas car. Also, Najman notes that “there is unprecedented buzz and excitement about EVs,” triggered by California’s plan to phase out the sale of gas cars by 2035 and the increased incentives from the recently passed Inflation Reduction Act — which will promote the sales and use of EVs. Related: What California’s ban on gas cars could mean for you—even if you don’t live thereHow much more are EVs vs. gas cars? Looks can be deceiving when it comes to car prices, says Jesse Toprak, chief analyst for Autonomy, an electric car subscription service. The EVs produced up to now have been premium models since “early adopters are generally less price-sensitive.” Therefore, he says, the average EV price versus that of a gas car “is not really apples to apples.” The average price of a new EV is $64,249, while a new gas car is $48,281, nearly a $16,000 difference, Najman says. This enormous difference reflects the market reality that most available EV models are still higher-e …

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