April 27, 2014

Affordable Electric Cars

Electric cars are starting to get affordable.

Photo credit mariordo59

A search on Edmunds shows 4 electric car models under $30,000.   However all 4 are in the sub compact class so they're small cars.   If you're looking at cars in that class then an electric might make sense.   The electric versions have limited driving range but its enough to meet the needs of most people for local city driving.

Here are the four cheapest electric cars and their base MSRP:

Mitsubishi i-MiEV = $22,995
Smart fortwo Electric = $25,000
Chevy Spark EV = $26,685
Nissan Leaf = $28,980

(note that some cars may not be available nationwide, I didn't check)

If you then also get the full $7,500 federal tax credit for EV's then that makes the cars fairly affordable.  You do have to have $7,500 in taxes paid for the year to get the full credit since the credit is non refundable.   But a lot of people don't pay that much in taxes to the IRS so they would not get the full $7,500 in credit.

MSRP w/credit
iMiEV $22,995 $15,495
fortwo $25,000 $17,500
Spark $26,685 $19,185
Leaf $28,980 $21,480

These prices are getting more affordable but they still aren't nearly as cheap as similarly equipped gas cars.    

The fortwo and Spark have gas equivalents so I can do a rough comparison of costs to buy and pay for fuel between the gas and electric models.

Spark EV Spark gas fortwo EV fortwo gas
Cost $19,185 $12,858 $17,500 $13,270
12 payments $4,140 $2,772 $3,780 $2,866
Fuel $307 $1,200 $278 $1,167
annual $4,447 $3,972 $4,058 $4,033

In both cases the annual cost is higher for the electric cars if we just look at making payments and fuel costs.     My estimates are based on driving 12,000 miles a year, paying 10¢ per kWh and $3.50 for gas.     I also figured just making payments and financing over 5 years on 3% loan.  Of course you could pay cash up front and then figure the opportunity cost.

Given that the electric cars should have higher resale value and lower maintenance costs I'd give the edge to the electric models in both cases.  If you happen to live in one of the states like Georgia or Colorado with Colorado with generous tax incentives then it can be a no brainer to get the electric.


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