Home

News

News

Mass Market EV Ownership Costs 18 Percent More Than Gas Cars: Report

Certain premium EVs and their gas-powered counterparts are closer to price parity than mass-market models.

Chevrolet Equinox EV

Suvrat Kothari Suvrat Kothari

By: Suvrat Kothari

Updated: Oct 3, 2023 at 7:20pm ET

Add InsideEVs as a preferred source in Google

Share

Comment

A new study highlighted the disparity between the ownership costs of premium electric vehicles and their gas counterparts, versus the ownership costs of mass-market EVs and equivalent gas cars. The data is part of JD Power’s E-Vision Intelligence Report, and it highlights one of the major challenges facing the EV industry: The lack of price parity with gas cars.

The average five-year cost of ownership of a premium EV is $287 more than comparable ICE vehicles. Mass market EVs, on the other hand, cost $9,529 or 18 percent more than their ICE counterparts over five years of ownership. The average premium EV buyer is paying just 0.4 percent more than what they would for owning a gas car.

Relative affordability is at the heart of this non-linear trend. Automakers transitioning to EVs tend to launch expensive, halo products first, which are succeeded by more affordable models. In fact, 76 percent of EV sales are occurring in the luxury market, the report added.

Tesla’s early models were the Roadster and the Model S. General Motors launched the Hummer EV pickup and SUV before it even announced the Ultium-based Bolt successor and Rivian’s R1 platform will precede the R2 platform by at least half a decade, and that’s if the start-up sticks to its 2026 timeline.

"Many premium brand dealers are passing through the EV tax credit on vehicle leasing, which makes the cost of their vehicles more favorable," Brent Gruber, the executive director and global automotive managing director of the Electric Vehicle Experience at JD Power, told InsideEVs.

He added, "We include Tesla in the premium segment. Teslas' price reductions and their incentive eligibility/pass-through make them relatively affordable compared to premium ICE vehicles." Gruber also said that many mass-market EVs don't qualify for tax credits, and even if they do, the dealers don't necessarily pass them on with leases. That's where they lose their competitive edge.

Read More EV News Here:

Here's How The Tesla Cybertruck Holds Up In A Crash Test

1,234 HP Lucid Air Sapphire Enters Production In Casa Grande, Arizona

The Mercedes-Benz EQB has an average five-year ownership cost of $72,107. A comparable ICE vehicle would cost just 71,420, which is only $687 less. In fact, the Ford Mustang Mach-E, which JD Power considers a mass-market model, costs $67,719 over five years to own and will dent customers' pockets with more than $16,000 in ownership costs over the same period than a comparable gas-powered crossover.

However, the study predicts that the 2024 Chevrolet Equinox EV would “start a movement towards parity in the mass market.” GM has said the Equinox EV, which entered production at its Ramoz Arizpe plant in Mexico this year, would start at around $30,000 (before taxes and fees) for the 1LT variant.

“We are at a turning point where EVs will be the mainstream choice for the next generation of customers and Equinox EV will lead this charge for us,” said GM CEO Mary Barra when the Equinox prices were announced. “With the flexibility of GM’s Ultium platform, we are bringing to market vehicles at nearly every price point and for every purpose,” she added.

What do you think?

View

Comments

GM made similar promises with the Silverado EV and the Blazer EV but failed to deliver on them. It had promised a $40,000 electric truck in the past, but had to cancel those plans – the Silverado EV now starts at over $70,000. In July 2023, Chevrolet also killed the entry-level 1LT trim of the Blazer EV which was supposed to cost around $45,000.

The JD Power report adds that the electric compact SUV segment is a priority for manufacturers, and planned affordable models could bring price parity to more segments in the future.

We want your opinion!

What would you like to see on Insideevs.com?

Take our 3 minute survey.

- The InsideEVs team

Share this Story

GO TO COMMENTS

(

)

Got a tip for us? Email: tips@insideevs.com

View all comments ( )

Trending

Kia EV3 Lease Deals Are Here, And It’s Cheaper Than The Chevy Bolt And Nissan Leaf

Kia EV3 Lease Deals Are Here, And It’s Cheaper Than The Chevy Bolt And Nissan Leaf

I Let Android Auto Plan My EV Roadtrip. Here’s How It Worked

I Let Android Auto Plan My EV Roadtrip. Here’s How It Worked

This Chevy Bolt Has 470,000 Miles. Here’s How Much A New Battery Was

This Chevy Bolt Has 470,000 Miles. Here’s How Much A New Battery Was

Here's What It's Like To Take Delivery Of A Rivian R2

Here's What It's Like To Take Delivery Of A Rivian R2

latest articles

RECOMMENDED FOR YOU



Can The BMW iX3 Take Down The Tesla Model Y L And Rivian R2?



How Much Range Do EVs Lose When Parked? (And How to Stop It)



Waymo Plans To Have 20,000 Cars By The End Of 2027



GM Is Closing Its Detroit EV Battery Plant



The Boring Company Uses Tesla Model 3 Sleds To Shuttle Shipping Containers Through Its Tunnels



The 2027 Lexus NX Plug-In Hybrid Gets A Bigger Battery And Fast Charging



This Chinese EV Is Now Made In Europe. More Are Coming