Automakers in the United States and abroad are ramping up production of electric vehicles at unprecedented levels — and for good reason.
Electric vehicles appeal to both energy-conscious consumers as well as those who are price-sensitive. Yes, you read that correctly: price-sensitive. So are electric cars really cheaper than those with conventional engines?
Are electric cars really more of a bargain that conventional ones?
Money expert Clark Howard is making a bold statement: He says that owning a Tesla is cheaper than owning a Toyota Camry!
The report shows that many electric cars, contrary to popular opinion, will retain more of their value compared to a vehicle with a conventional engine.
According to Kelley’s figures, a 2019 Tesla Model 3 will retain 69% of its value over 36 months. With a price tag ranging from $36,000 to $60,000 for all the bells and whistles new, a used Model 3 will have no problem selling itself.
Contrast that with the 2019 Camry, ($24,000 to $35,000 price tag) which has a resale value of only 48.6% of its original cost after three years.
But, there’s more: If you exclude trucks and SUVs, many electric cars hold their value better over comparable cars powered by gasoline.
Resale values of electric cars vs. gas-powered cars
|Cars||Price||Resale Value (3 years)|
|Tesla Model 3||$35K to $60K||69%|
|Audi E-Tron||$75K to $82K||54.5%|
|Subaru Legacy||$23K to $32K||51.8%|
|Toyota Camry||$24K to 35K||48%|
Full disclosure: Clark started off with a Nissan Leaf nine years ago and now owns a Tesla. But now the newer Leafs have battery ranges in excess of 200 miles, which is comparable to some Tesla models.
Clark says that electric cars, over the long term, are cheaper “because you have essentially zero maintenance on an electric car and virtually no fueling cost on an electric vehicle.”
“Even if you did pay a fair amount more upfront, it’s still going to be cheaper to own the electric vehicle.”
Clark says the big news is that the price of the battery, which had really pumped up the price of electric vehicles, has come down drastically in the last year.
The price has dropped so much that “we’re very close to the point where you’ll be able to buy a variety of electric vehicles at a price roughly equivalent to what you’d pay for a gas engine,” Clark says.
“And then every single week you’d save a ton,” he adds.
Clark says that if you take the cost of energy for a Tesla and convert it into the miles per gallon equivalent, EVs tend to get, on average, 130 miles per gallon.
“But who cares about them being cheaper? They’re so much more fun to drive,” Clark says.
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Is a Tesla cheaper than a Toyota Camry?