A study estimated that although the upfront cost of an average EV is approximately $22,000 more than its ICEV counterpart, the lower costs of fuel, insurance, and maintenance over a 15-year period may make the lifetime expenses of owning an EV only $8,047 more than an ICEV.
One of the most striking findings was the revelation of how nearly $22 billion in federal and state subsidies and regulatory credits masked the retail price of EVs in 2021.
This substantial sum suppressed the sticker price of electric vehicles by an average of nearly $50,000, making them appear significantly cheaper on the showroom floor.
Direct subsidies come in the form of tax credits and direct monetary support from the government. Prominent among these is the $7,500 federal tax credit for EVs, which was recently extended and modified by the Inflation Reduction Act in 2022.
The analysis highlights that owing to the greater weight of EVs compared to their internal combustion engine vehicle (ICEV) counterparts, EV owners should be paying more in fuel taxes.
EV advocates have long argued that the cost of electricity is equivalent to $1.21 per gallon of gasoline. However, these claims tend to downplay several critical aspects, including the costs of charging equipment and charging losses over the long term.