The EV market can be confusing, even without Democrats tipping the scale

Like many families, I’ve found myself in the car market recently. Trade in value for used cars is high, though new car inventories may be somewhat impacted depending on specific make and model of car you’re looking for. In any event, my wife has decided she wants a new car. She’s owned a Honda CR-V for seven years, but has never really liked it. She’s ready to move on. She’s been looking at a few different vehicles, but based on the recommendation of two of her friends from work the Mazda CX-5 had crept to the top of her list.

But, she’s also been looking at a few Electric Vehicles (EV) as well, one of which is now in a virtual dead heat with the Mazda. Having no experience with EVs — hands on, or otherwise — I’ve had to delve into all things EV. To say the least, my eyes were opened to the confused mess that is the EV market.

If you spend any time at all looking at EVs, it won’t take long for you to notice the cost of EVs are generally higher than comparable Internal Combustion Engine (ICE) vehicles. Greatly so in many cases, which should make you question how EVs can compete with ICE vehicles. While there is a segment of consumers who view this question very differently, the majority of consumers look at the financial bottom line. Money doesn’t grow on trees, and with the cost of everything going up in the great Biden economy, spending several thousand dollars more on an EV might not make sense to many.

So again you ask, how can EVs compete with ICE vehicles? Like so many green deals, EVs largely depend upon tax subsidies to bring the overall cost of ownership down to ICE vehicles. But, you’ll definitely need to do your homework before purchasing, however, as not all EVs get federal tax incentives. And, each state also have their own range of subsidies (or don’t). I live in a state that doesn’t have state or local level tax incentives. And here is potentially the most important point, the federal tax incentive is an offset only. In other words, you will receive up to $7,500 in tax offset, or up to whatever lessor amount of federal tax you owe. If you owe no federal tax, you get no federal tax offset. The incentive is not a refundable tax credit.

For the nearly 50% of Americans that pay no federal income tax, this could be a big factor when comparing total cost of a vehicle. To further complicate matters, state, local, and federal incentive laws can, and do change without much warning. Especially at the federal level when Democrats are in office, or in states where Democrats heavily outnumber opposition. Democrats in Congress are trying to pass a bill that greatly expands, and increases EV tax incentives. But mostly for their favored union manufacturers.

That’s right. Instead of a neutral EV incentive, Democrats are now trying to put their finger on the market scale to help their union buddies. Union buddies who work for manufacturers making inferior EVs at higher cost due to union wages. As if you, the consumer, needed any more confusion to be introduced into the equation.

I mentioned earlier that my wife has been seriously considering a Mazda CX-5, but also two EVs. Those EVs being the Tesla model Y and Model 3. There are a lot of other EVs now on the market, but lets be honest, Tesla is the market behemoth for a reason. Of course Tesla has its fanbois, but they also have great technology that attracts consumers. The Y and 3 series have the best price point to range available, even without tax credits.

Best price point to range, doesn’t mean they compare well to other available options like the CX-5 though. There are a lot of factors one can (should) consider when purchasing a car, but the drive off price is certainly a big one. Total cost of ownership (purchase price, insurance, maintenance, fuel economy, and others) is another. But does the average consumer truly pour over these details? I don’t believe so. I believe most consumers look at drive off cost, insurance cost, and potentially tax incentives/rebates. Most consumers aren’t going to look at a vehicle from a total cost of ownership (TCOO) perspective and certainly aren’t going to look at greenhouse gas production. Even if one is so inclined, it takes research to truly understand that convoluted metric.

My wife would like a Mazda CX-5, Tesla model 3 LR, or a Tesla model Y LR. So lets look at some numbers. Obviously numbers alone aren’t the whole picture, but its the largest part of it. By that metric alone, the CX-5 has a clear advantage over either of the Teslas. A massive one if you look at annualized cost of ownership over only a 5 year period. Most especially if you drive closer to 100 miles than 300 miles per week.

That advantage is eroded over a 10 year period, however. Less severely if you drive closer to 100 miles per week, than not. By 275 miles per week the cost of ownership advantage the CX-5 enjoys should have nearly evaporated.

If you were interested, the average driver in the US drives 13,500 miles, or 259 miles per week. The CX-5 would still hold a cost advantage for the average driver, even over a 10 year ownership period. The battery pack is the most expensive part of an EV. Until, or unless those costs come down considerably, you will continue to see disparate cost comparisons with comparable ICE vehicles. Tax incentives won’t help if they continue to be passed along as subsidies. Not for the nearly 50% of Americans that pay no federal income tax. If Democrats were as remotely interested in increasing EV sales as they say, they wouldn’t be playing games by trying to prop up specific manufacturers. But they are, and the average consumer (including those who pay no taxes) will look at cost and range of those vehicles and continue to pass on them. If they buy an EV at all.

So done deal, right? The CX-5 is the car my wife should buy? It’s complicated. As I said, numbers alone are not the entire picture. Would she keep the CX-5 for 10 years? How reliable would the CX-5 be in 10 years? ICE vehicles have a lot more moving parts, and a lot more maintenance demands than EVs do in general. Especially as the vehicle ages.

There are other things to consider with an EV. Charging being the elephant in the room. Its not easy to pull over on the side of the road if you run dry, and walk to the nearest gas station for a can of electrons. You have to plan trips more carefully than you do with an ICE vehicle. While there are tens of thousands of public charging locations across the US, there are still huge swaths of the country where those are few and far between. If you live in an apartment or condominium, home charging may be difficult, or impossible. You may have to take short trips to the nearest charger regularly to charge up. And of course, charging isn’t as quick as gassing up. Even with high amperage super chargers, it can take 3-4 hours to completely charge an EV from nearly depleted to full. But even when charging a minimal amount, it can still take 15-45 minutes to charge, as Lithium Ion batteries charge quickest below 75% capacity, and much slower above 75%. If you own a home, and drive relatively few miles per day (50 or less), keeping the vehicle charged should be no problem at all, however. Even if charging from a 120v 12A outlet.

We’re still talking it through, but hope to make a decision soon.