Hidden costs of owning an electric car

Hidden costs of owning an electric car

Beyond the satisfaction of being “greener,” part of the appeal of owning an EV is spending no more of your green on gasoline, oil changes, and the other costs of owning an internal combustion vehicle. But are there hidden costs that could make owning an EV as much or more expensive?

Higher initial price

It’s no secret, but electric cars generally are far more expensive initially than their gasoline or hybrid counterparts. That gap has narrowed slightly with recent price cuts (particularly for the bestselling EV automaker Tesla), but the bulk of available EVs remain at premium prices. In fact, the average list price for new EVs in April was $62,927 versus an average of $49,111 overall for all new vehicles, per Cars.com data. Federal tax credits can help narrow that gap if you and the vehicle qualify, and in some locations, additional state and local subsidies can close it further.

Uncertain depreciation

The same recent price cuts on new EVs have created downward pressure on the value of that EV if you want or need to sell it. Used-EV prices in April were down 20.2% from a year earlier versus a decline of 6.3% in used-vehicle prices overall, according to Cars.com data. Of course, that math works in your favor if you’re shopping for a used EV.

Home charger installation

Having a charger at home can make a big difference in the cost of EV operation and convenience—even more so in areas with spotty public charger availability. Typically, home rates for juice are substantially lower than public charger rates (particularly for DC fast chargers), and you also can more easily take advantage of even lower time-of-day rates where applicable.

Though charger installation costs can vary widely from a few hundred bucks to much more, a charger installation is a one-time expense and can possibly add to the value of a home.

Rising electricity rates

Electricity rates have been rising overall and are expected to continue to go up with the need for more generation and upgraded distribution lines. Electricity rates, as well as time-of-day and meter charges, vary widely by region and state.

Scheduled maintenance and repair costs

A Consumer Reports reliability survey found that owners reported an average of 79% more problems for EVs than for gasoline vehicles, and repairs, such as those required by collision damage, can be a little or a lot more expensive depending on the vehicle. Both of these can be explained partly by the fact that EVs are generally more expensive and have more high-tech electronics. Repairs also might require more automaker-sourced parts and skilled labor.

More tire wear

A 20% reduction in tire longevity is a commonly cited rule of thumb, though wear varies by EV and can be worse for vehicles with softer performance-oriented tires. Overall, though, EVs can be harder on tires because of their higher weight compared to similar gasoline vehicles thanks to their batteries and an EV’s instantly available torque and quicker acceleration, which is always tempting to use.

Higher insurance premiums

EVs have higher insurance costs than gas-powered cars due to factors like expensive repairs, specialized parts and complex technology. While a driver’s history, location and personal circumstances also affect rates, the nature of EVs plays a significant role in their increased costs. Additionally, rising auto insurance rates overall make this disparity even more noticeable.

Higher repair costs and specialized maintenance

  • EVs require advanced technology and specialized labor, making repairs more expensive than for traditional internal combustion engine vehicles. Some key factors drive up these costs:
  • Battery repairs: The drive unit battery is the most expensive component of an EV, and even minor damage can lead to a costly replacement. Though both can require labor-intensive work, replacing an EV battery is significantly more expensive than replacing a battery in a gas-powered vehicle as it may be integrated into the car’s frame, and costs can reach $6,500-$20,000. In some cases, insurers may choose to declare an EV a total loss rather than pay for extensive battery repairs. This may increase the frequency of high-cost claims, prompting insurers to charge higher premiums to offset the risks.
  • Specialized components: EVs often use proprietary technology, meaning their parts are typically not interchangeable with those from other manufacturers. This limits repair options and increases expenses.
  • Limited repair network: Gas-powered cars can be serviced at thousands of independent shops, but EVs require specialized maintenance from trained professionals. The limited number of certified technicians and repair facilities further drives up labor costs.

Longer claim-processing times and higher payouts

Insurance companies consider the cost and frequency of claims when setting premiums. Factors making EV insurance claims more expensive include:

  • Higher vehicle prices: On average, EVs are more expensive than gas-powered cars, leading to higher claim payouts when they’re damaged or totaled. Per Cars.com data, the average price of new EVs was $65,808 as of January 2025—34% higher than the overall new-vehicle average price of $49,000 and 37% higher than the $48,101 average price for all new internal combustion vehicles. For example, the base variant of a 2025 Tesla Model 3 starts at around $44,000 (before tax credits), while a comparable gas-powered sedan, such as the Honda Accord, costs about $29,000. Even hybrids typically start lower than an EV; for instance, the 2025 Toyota Prius starts around $29,000. Since insurance rates are partially based on a vehicle’s replacement value, the higher purchase price of an EV translates into more expensive insurance premiums, as replacing or repairing an EV after an accident is generally more expensive for insurers.
  • More expensive repairs: While EV repair costs vary by model, studies show they are generally higher than gas-powered cars. A 2023 report, for instance, found EV crash repairs averaged $950 more, largely due to Tesla models; without them, the difference dropped to $269.
  • Longer repair times: A 2024 report found that the average EV repair takes 15.6 days, compared to 12.7 days for gas-powered vehicles. Longer repair times translate to higher insurance costs, especially if rental car reimbursement is involved, according to Experian.
  • Higher claim frequency: EV owners reportedly file more insurance claims overall. A 2024 LexisNexis Risk Solutions study found that EVs had a 17% higher claim frequency than traditional passenger vehicles. Meanwhile, a study by the Highway Loss Data Institute found EV repair claims were only 2% higher, with property damage claims 4% higher due to the vehicles’ weight. However, EVs had 19% fewer crash claims, suggesting they may be involved in fewer accidents overall.

State EV fees

The National Conference of State Legislatures reports that 32 states assess EV-specific annual fees intended to compensate for the loss of gasoline tax revenue, a primary income source for roads as well as, in some states, other transportation needs (e.g., public transit or more charging stations). Gas tax revenue already has declined as conventional vehicle efficiency has improved, and some states add an EV fee that also applies to plug-in hybrids; the fees generally range from $50 to $200 and are sometimes also indexed to rise with inflation. Battery capacity loss

Complete failure of an expensive EV drive battery is rare and likely to be covered by the car’s battery warranty, which is required to be at least eight years or 100,000. But all batteries lose capacity—EV range and power—with time and use. Battery capacity loss is not only an out-of-pocket cost, but it is also a loss of value.

IMAGE: The hidden costs of owning an EV | Cars.com illustration by Paul Dolan

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Cars.com