Economic viability is a big consideration for someone investing in something. Even valid for electric vehicles. Why is a consumer using an electric vehicle? They’re worth buying? What advantages does a TSLA EV offer the customer? Are electric cars cheap?
A lot of concerns arise when an electric vehicle is planned.
Electric vehicle costs
Answers for electric vehicles’ economic viability will be as follows. Electric vehicles become close competitors with traditional internal combustion engine vehicles in efficiency, cost, etc. Most vehicle manufacturers have started making electric vehicles or announced plans.
Although there are only a few electric vehicles like tesla, Electric Vehicles have a range comparable to IC engine vehicles, EVs are gaining momentum.
High-voltage batteries are one of an electric vehicle’s costlier elements. Many electric vehicle battery development is going on.
Due to their speed-torque and performance, Electric motors are better than IC engines. An electric motor can produce high torque at low speeds. Helping the EV eliminate a multi-gear transmission system.
Now, let’s look at electric vehicles’ economic viability. The following are big electric vehicle expenditures.
Initial Electric Vehicle investment
The initial cost of electric vehicles relative to traditional vehicle costs these days. Batteries are the lion’s share of an electric vehicle’s initial expense.
An IC engine vehicle owner need not build facilities to fill the vehicle fuel at home. Gas stations are well-established and available worldwide.
Overall, Electric vehicle chargers at home. A regular level 1 charger requires no additional home installations. Using it on a household power socket.
But it slowly charges the vehicle. A Level 2 charger is required at home.
Level 2 home charging stations must be mounted when purchasing an electric vehicle. This is an extra one-time fee for vehicle owners.
EVs’ manufacturing cost decreases and impacts first on the European market, spreading across the globe.
It will take a few more years, but in the near future the electric vehicle would cost almost equal to IC engine vehicles.
Government measures to extend the use of electric vehicles with grants, discounts, tax exemption, etc. We would expect market competition to further reduce initial costs.
Maintenance of Electric Vehicles
Electric vehicle maintenance costs are lower than IC engine vehicles. An electric vehicle can prevent oil changes, exhaust system repair, engine repair, regular clutch maintenance, gearbox, etc.
This reduction makes the electric vehicle’s maintenance cost around 35% lower than a traditional vehicle’s.
Electric Vehicle life
An electric car battery is short-lived. Electric motor, converter and all other elements have the same or more traditional vehicle lifetime.
Battery costs 30-45 % of total vehicle price. A vehicle production offers a 2-8-year warranty on an electric vehicle.
Companies have a 5-year battery warranty or 60,000-mile power loss. Battery replacement costs $5500. Except for battery, conventional and electric vehicle life is equivalent.
Electric vehicle depreciation is more than conventional. The primary explanation for an electric vehicle’s high depreciation is the short battery life period.
The pre-owned electric vehicle market after 5 or 15 years remains to be studied.
Calculating operating costs
Let’s do easy math on electric vehicle economies to find the operating cost trend for long-term use. We won’t consider variance of annual energy charges, inflation rate, etc. to simplify the calculation.
Electric vehicles will be main players in the automotive industry. Electric vehicle’s economic feasibility determines how consumers consider the vehicle.
If you want to buy the stock of Tesla, you can check its income statement at https://www.webull.com/income-statement/nasdaq-tsla before that.