Why are Electric Cars So Expensive and can we reduce their Price?

People used to say, “In the future, we will have flying cars,” which always sounded bizarre to us. When electric cars were launched, dreams turned into reality. A car that runs on electricity? Cool isn’t it? However, you would still hesitate to buy one. Why though? Aren’t they good for the environment? The high Economic impact of electric cars may take away their advantages. Roughly 1% of the population in the US is using EVs. This means only 1% of EVs are currently on the road and in the market. Strange right? Then another question enters your mind, “why are electric cars so expensive?” The answer is rather long. EV prices keep fluctuating due to many factors. Let’s unravel those factors and understand what makes electric cars so expensive. 

Why are Electric Cars so Expensive than Gas Cars?

One of the major disadvantages of electric cars over gas cars could be their high cost. Gas cars operate on combustion engines. They do not need batteries and run on fuel or gasoline. However, this makes them a significant threat to the environment, but still affordable for the general public. Their low cost is due to the way their engine works. It runs on fuel and does not require pricey electric motors. On the other hand, the Electric cars cost is higher than gas cars due to their expensive batteries. Moreover, electric motors convert electrical energy into mechanical energy. This process is complex and requires excellent engineering to work effectively. Hiring experts may also cost the companies a fortune, to say the least. Gas cars are not so complex and thus, do not need any high-powered batteries. 

What is the price of an electric car compared to a gas car?

Another reason why are electric cars expensive, is because of their expensive batteries. Their battery cost is almost the same as their total cost. The reason is the usage of high-quality raw materials. Raw materials may include expensive metals like lithium which can easily reach a higher price in the market. What’s more? Maintenance costs also affect Electric vehicle pricing as they are relatively easier to maintain than gas cars. This is one of the perks of electric cars. They do not need an oil change or spark plug replacement, reducing their maintenance costs. Their maintenance costs are almost half the maintenance costs of a gas car. Furthermore, companies that produce both EVs and gas cars have faced no significant growth in EV sales. Here’s a Price comparison electric vs gasoline cars that may explain why electric cars are still falling behind. 

Companies	Average price of an electric car	Average price of a gas car
Tesla	$55,000	$40,000
BMW	$194000	$70,000
Chevrolet	$31000	$29000
Hyundai	$33000	$22000
Audi	$149000	$291000
Mercedes Benz	$137,000	$71000

What are the factors that contribute to the high price of electric cars?

Electric cars are without a doubt an amazing innovation in automaking history. However, their creation requires lots of intellect and effort. Learn about the factors affecting electric car cost and understand their impact. 

1- Battery cost

Remember, how we were rambling about why are electric cars so expensive? EV batteries are made with expensive metals that are hard to obtain. Moreover, battery production requires a large amount of resources. This can significantly affect Electric car affordability and may decrease in the future. However, battery costs aside, electric cars are still practical because their batteries can last up to 10 years. This reduces their replacement costs and saves you a decent amount of cash. However, it can suffer a bad collision, which may break the bank. Battery replacement costs can sometimes exceed the cost of electric vehicles, making them more expensive than gas cars.  

2- Extensive research

It takes big brains to create the perfect electric vehicle. However, high research costs affect Electric vehicle pricing substantially. People may be shocked to learn just how expensive it is to create an electric car. Electric cars run on electric motors. A common person can never understand such complex mechanics. Besides its creation, a team of experts performs EV market analysis USA to determine the amount of EV sales. This research can take up to years and requires a lot of patience. In the future, new parts will be introduced to elevate the performance of these battery-powered vehicles. This can also increase EV investment costs substantially. 

3- Expensive cause

Electric cars have been marketed as your go-to ‘green cars’ meant to prevent our planet from burning up. However, their cost exceeds their cause. Additionally, they are speculated to do more harm than good. How so? Their creation is an emission-intensive process. This means they would create half the carbon emissions when created over their lifespan. The economic impact of electric cars is linked with its purpose. People may argue about how they protect the environment and why everyone should go electric. This is a matter of morality and values which varies from person to person. 

4- Insurance costs

Are you skeptical of those insurance companies trying to convince you to insure your EV? Do not give in as you may lose more cash than save. Insurance costs are also one of the major reasons why are electric cars so expensive. How so? Insurance companies may usually cover your replacement costs rather than repair costs. Think about it, EV batteries do not give up so easily and may run for a decade with good maintenance. Replacements are rare and often done under the manufacturer’s warranty. Additionally, insurance costs may rise concerning company policies. This can indirectly cause Electric cars cost to spike. 

5- Time consumption

‘Time is money,’ here, it means literally rather than figuratively. EVs, unlike their gas-powered rivals, need electricity to run. However, charging an electric vehicle requires a great amount of time. Electricity is cheaper than gas or fuel. Moreover, you can create it using sustainable sources. But how is related to our main question, “why are electric cars so expensive?” Is it the hours wasted charging your EV or is it something more than that? The culprit is the hidden charges that come with it. Charging an EV can take up to half an hour at the station, which is still quite slow. Besides the question, “Why are electric cars expensive,” EV cars are almost useless for people who do not live near charging stations. Moreover, home charging can take up to 40 hours which is almost a day and a half!

Is there a way to reduce the price of electric vehicles?

Enough chit-chat about what makes the Cost of electric vehicles rise. Manufacturers must find ways to prevent such a valuable invention from going to waste. Knowing how and what makes EVs so expensive, companies must find alternatives. Here’s how they can balance the EV investment costs and get them out in the common market. 

1- Demand increase

The reason why EVs are so expensive is because of low demand. People are still hesitant to buy them. According to EV market analysis USA, they still have a long way to reach the mainstream market. However, gas cars are still a threat to the environment and despite their low prices, they might do more harm than good. Companies must work on Electric car affordability and generate curiosity among the public. When more and more people become aware of how they might save more than spend, EV sales might go up. Companies like Hyundai have been actively promoting their electric car, IONIQ, which has stirred some interest in the general public. 

2- Raw material price

This isn’t a sci-fi movie where someone might magically discover a way to reduce the raw material price of an electric car. However, you can anticipate a further drop in lithium prices.  Lithium is a crucial material used in the batteries of these electric-powered vehicles. Some companies like Tesla have already cut the cost of electric vehicles to almost half. What impact would it make? According to analysts, the new mines and processing plants might be why lithium prices are dropping significantly. Moreover, EV sales in China and Europe have dropped lower due to the expiration of subsidies for purchase. This can also contribute to lower lithium prices. 

3- Affordable replacement

Replacement costs are major factors affecting electric car cost that may stop people from buying them. Who wants to spend a fortune on merely replacing the battery of their car? Moreover, battery replacements can be more expensive than the car itself. Still, people prefer EVs over gas cars. The reason is low maintenance costs. Besides the obvious Price comparison electric vs gasoline cars, EVs require little to no maintenance which means you can sit back and relax. Their batteries do not wear out so easily. Furthermore, many companies are trying to create second-life storage batteries. These batteries are recyclable which may further reduce the need to replace the battery. 

Conclusion 

Electric cars are the future of the Auto making industry. They are what we call resourceful. However, their high cost may overshadow their benefit. The question, “why are electric cars so expensive,” is still valid making it difficult for us to move forward. Factors like high raw material cost, research costs, VATs, and replacement costs can easily raise the price of  EVs. Companies must put in efforts to make EVs more affordable and usable. A drop in raw material prices or affordable replacement options can make EVs more accessible soon. Better advertisements can also create awareness among the common folks. They may prove helpful in making EVs the go-to cars for your future adventures. 

Are there any companies making safe and affordable EVs? Why buying EVs can save more money? Find out more by visiting our blog.