How car dealers should be discussing the costs of electric vehicles

People have a variety of reasons as to why they want to switch from a gas vehicle to an electric vehicle. Top reasons include fuel cost savings, reducing your carbon footprint, and having a cutting-edge new driving experience. Driving in an eco-friendly way is undoubtedly a common draw. But buying electric vehicles, like any vehicle, is a substantial investment. Understanding the long-term savings in operating and maintaining an electric vehicle in daily use can be helpful in making an informed decision.

In a stark departure from previously reported stats, We Predict released data in its 2021 Deepview True Cost report indicating that service costs for electric vehicles in the first three months far surpassed maintenance costs for gas-powered and hybrid vehicles. According to the report, the average maintenance cost for an EV within the first 90 days of ownership averaged $123. That’s twice as much as gas-powered vehicles, which is about $53. This potentially staggering bit of data runs contrary to the idea that electric vehicles are the most cost-effective vehicle alternative.

The report also showed that service costs within this time frame for electric vehicles were nearly triple the costs for hybrid vehicles. Furthermore, parts and labor costs for electric vehicles are much higher than gas or hybrid vehicles. According to We Predict, parts costs for electric vehicles average $65, compared with $28 for gasoline and $24 for hybrid vehicles. Electric vehicle labor costs average $58, while gasoline vehicles average $25 and hybrids $22.

While EVs typically do not require as many repairs, this reality does not necessarily equate to overall cost savings during the life of an EV. When complex parts and labor are involved, including unique technology fixes, EVs may not be the cost-effective alternative consumers hope for.

EV repairs can take several more hours to fix, increasing the cost of labor. Specifically, electric vehicles tend to be powered by lithium-ion battery packs. Those packs can not only be costly to replace, but mechanics trained and certified in EV repairs and maintenance need to be extremely cautious in handling the battery. If not, they may risk serious injury. Also, because of the lightweight and high-energy absorption materials that EVs use today to increase safety, body damage after a collision can be more extensive. For gas-powered vehicles, many of the repairs and maintenance protocols are routine and can be done at any service center or dealership.

So, what does this mean for dealerships with customers who want to make that EV leap? It’s essential to be transparent with potential buyers and ensure that, while electric vehicles have long runtimes, repairs and maintenance can still rival and surpass a gas-powered or hybrid vehicle cost. Transparency can help set proper expectations and help customers view their electric vehicle purchase as an investment choice that matches their values, not just their pocketbooks. Indeed, while electric vehicles are more sustainable and states often provides rebates and incentives for EV owners, understanding the long-term investment is still crucial to keeping an EV in great shape.

We Predict’s milestone study highlights the reality that fewer repairs don’t necessarily mean lower costs over time. Whatever problems occur within the first three months of the life of an EV (or any vehicle) is an indication of how it will perform years and months down the road. It really comes down to this: A vehicle can have fewer problems than others in its segment, but higher overall costs based on the nature of components repaired or replaced and parts and labor expenses. In short, electric vehicle repairs may be fewer, but they can cost a lot more.

Typical repair and maintenance challenges for an EV that may be different than other vehicles include battery maintenance and care, wear and tear on tires; sensitive fluids that need extra attention; and trouble with brake pads and discs. Because electric vehicles don’t have engines, their enormous batteries provide different stresses on the vehicle. Many EV owners experience a learning curve in how to prevent common issues. For example, electric vehicle owners should pay particular attention to tire treads that carry the burden of a hefty battery that causes immediate torque, which can significantly degrade tires.

So, what can dealerships do to help a customer make an informed and confident EV choice? Give them the pros and cons:

Pros:

• Electric vehicles are fuel-efficient and help reduce your carbon footprint
• Some states offer tax credits for EV drivers
• Fewer overall repairs mean fewer trips to the repair shop
• Some states offer electric vehicles access to HOV (high occupancy vehicle) lanes for quicker commutes

Cons:

• Repairs might be less frequent, but can cost more
• Recharging the battery is a time-consuming task
• Recharge points are still in the growth stage
• Battery replacements can be expensive

Part of ownership means knowing how to handle sudden repairs which inevitably occur through wear and tear or collision. For customers, knowing the true cost of electric vehicle ownership can help buyers make more confident and informed decisions.  And that’s good business.

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