Is the Cost of a Used Electric Vehicle Lower than That of a Gas-Powered Vehicle?

The cost of a used electric vehicle (EV) compared to a gas-powered vehicle (ICE) is an increasingly relevant topic as more consumers consider the potential benefits of EV ownership. Factors such as battery longevity, depreciation rates, and operational costs all play significant roles in determining the total cost of ownership.

The Lifespan of Electric Vehicle Batteries

One of the most compelling arguments in favor of EVs is the promise of long-lasting batteries. Most EVs come with an 8-10 year, 80,000 to 100,000 mile warranty on their batteries, which are designed to last longer than the vehicle's lifespan. While some early models required battery replacements, this is becoming less common as battery technology has improved. This reliability is in stark contrast to the frequent need for engine or transmission replacements in gas-powered vehicles, which often require scheduled and costly repairs.

Rare Battery Replacements

The idea that EV batteries need to be replaced after several years of use persists due to common misconceptions. However, many first-generation EVs like the first-generation Nissan van have shown remarkable longevity. For example, a ten-year-old Nissan van still operates with around 80% of its original battery capacity, making it a viable option for long-term use. Advances in battery technology have led to even better performance and lower costs, meaning that the replacement of batteries, if ever needed, will be more efficient and affordable.

Future of Battery Technology

With continued advancements in battery technology, it is highly unlikely that batteries will need to be replaced frequently. By the time the battery does eventually need to be replaced, the new designs and chemistry will likely offer twice the capacity for less weight and at a lower cost. Some experts predict that a complete battery replacement may not be necessary until after 150,000 to 200,000 miles. At this point, the newer batteries will offer greater efficiency and lower cost, making the entire investment more worthwhile.

Price Comparison and Depreciation

Another important factor to consider is the pricing of EVs versus gas-powered vehicles. Many models of electric vehicles are competitively priced with their gas-powered counterparts, especially when owning and operating costs are taken into account. For instance, the Ioniq 5 offered a price point comparable to several gas-powered SUVs of similar size and features. However, many consumers are deterred by the rapid depreciation of EVs, as they often believe that the batteries will need to be replaced after a certain period. While this is a misconception, it is true that EVs generally depreciate more quickly due to this misconception.

Used EVs from Rental Companies

Interestingly, purchasing a used EV from rental companies like Hertz can be significantly cheaper than buying a comparable new gas-powered vehicle. This is true for most other used vehicle sources as well. This trend is likely to continue as more consumers become familiar with EV technology, leading to a shift in perceptions and a broader acceptance of the costs associated with EV ownership.

Overall, the cost of ownership for a used electric vehicle is often more favorable compared to a gas-powered vehicle, thanks to the long-lasting nature of EV batteries and the potential for lower operational costs. As technology continues to advance, the advantages of EV ownership are likely to become even more compelling.