Are electric vehicles expensive?

Electric vehicles are more expensive to buy than cars with combustion engines due to the battery costs, however, the investment amortizes over a few years thanks to significantly lower operational costs. Of course, the cost differences vary between models and type of usage. Financial incentives help to balance out the higher investment cost in the current innovation phase. Buyers of battery electric vehicles in Austria are currently being granted a subsidy of 4,000 euros (until end of 2018), the Standardized Consumption Tax and the engine-related insurance tax are also not applicable; moreover high discounts are available on insurances.

Relevant for the calculation are the Total Cost of Ownership (TCO) of a vehicle, consisting of purchase costs and operating costs over the entire utilization period. TCO calculators help with the comparison.(10) On top of significantly lower energy costs, other operating costs such as wear and maintenance are also clearly lower. Therefore EVs are especially well suited for sharing and rental models and could become the driver for the using-instead-of-owning principle.

A key cost factor is the battery: In the past 5 years the costs for a lithium-ion battery have dropped to one third. In 2011 1 kWh battery storage for a car cost about 750 euros; the costs were down to 215 euros in 2017. Moreover, electric vehicles have proved relatively stable in value. Also risk factors such as new emission limits are not a factor for electric vehicles.