Posted on by Californiacontrarian

Green EV Owners Will See RED

While the purchase price of EVs is prohibitive for the vast majority of Americans (see 5/2/23 blog titled “25% vs. 75%”), there are other additional costs that will push owning an EV even further out of the range of the majority of Americans. Granted that once you already own an EV … perhaps it was given to you by a rich uncle, the cost of driving that car is at present less for an EV, especially if you happen to have solar panels on your roof … again given to you by that same rich uncle. However, there is one big time additional cost that is often forgotten about, or more likely just ignored by those who are pushing EVs for all. That other big time expense is the cost of auto insurance, and once you already own an EV, auto insurance is a sine qua non.

In as much as insurance companies are in business to make a profit, the cost of auto insurance on EVs will go up and up. As most are aware these electric batteries are prone to spontaneous combustion. Even though this dreaded happening apparently does not occur that frequently, keep in mind that it is being advised not to park these EVs indoors, because, while a car fire is one thing, a fire that occurs in a garage is quite another kettle of fish, especially if your garage is connected to your house. Assuredly as time goes on and more people own electric cars, the insurance companies will ask where this EV is parked at night. Of course parking your $60K Tesla  on the street overnight is also no muy bueno.

Nonetheless, skipping over the potential of possible spontaneous battery combustion, there’s the issue of the cost of EV insurance for damages due to accidents.

From Just the News:

“The hidden costs of EVs: Ohio man gets $42,000 repair bill after fender bender in electric truck”

Landscaper Chris Apfelstadt of Columbus, Ohio, shared a post in a Facebook group for Rivian fans recounting how while driving his electric truck one day, he was struck from behind at a “relatively low speed.” No airbags inflated, he noted, and purported pictures of the accident show only minor damage to the rear bumper of his pickup. 

“I figured the repair would be expensive but had no idea!” Apfelstadt wrote on Facebook.

Some other potential costs for EVs:

 Battery Replacement:

The cost of replacing an electric car battery is significantly higher than replacing a battery in a gas-powered car. Whereas a battery for a gas car typically wouldn’t exceed a few hundred dollars, EV batteries can range anywhere from $5,000 to $22,000. ConsumerAffairs.com reports that replacement costs for older models like the 2014 Nissan Leaf or the 2014 Tesla Model S are a steep $13,500 and $17,269, respectively.

“Minor damage to an electric vehicle battery pack can lead to the entire car being totaled, leaving the expensive battery packs piling up in the scrapyard and causing higher insurance premiums,” the pro-market Institute for Energy Research warned recently on its website. 

“With no way to repair or assess slightly damaged battery packs after accidents, electric vehicles can lose up to 50 percent of their price, rendering it uneconomical to replace them,” the IER explained.

Charging the car:

Anderson Economic Group found that with gas prices falling from historic highs and electricity prices rising late last year, “the fuel cost for most Internal Combustion Engine (ICE) vehicles was comparatively cheaper in the final quarter of 2022 than charging an electric vehicle (EV).”

In Q4 of 2022, according to the Anderson study, the cost to fuel a mid-priced gas vehicle for a 100-mile drive was approximately $11.29, nearly 31 cents cheaper than it cost a similarly sized EV for a 100-mile charge from home, but over $3 less expensive than charging a vehicle at a public station.

Unfortunately, the installation price for an at-home electric vehicle charging station can also burn a hole in the wallet.

“Most American homeowners will spend around $1,150 to $2,750 to purchase and install a 240-volt charging station,” reports MotorTrend, noting a “good home charger” is about $350-$750, while installation can cost upwards of $2,000. 

Certainly insurance companies will not lose money insuring EVs! They will be raising insurance premiums … the only question is ‘how much?’

5/9/23

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