12 Reasons Why Electric Cars Are So Expensive

Electric cars are extremely popular now, and a lot of manufacturers are investing in them. But why are they so expensive? 

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Why are electric cars so expensive?

Electric cars are expensive because of research costs, lesser competition among brands, expensive batteries, pricey insurance plans, expensive charger installations, and limited tax credits. Moreover, they need inverters, sophisticated software, and expensive drivetrains, which drives up the cost.

We have been studying electric cars for quite a while and keep a close watch on the latest developments in this technology. Here, we will educate you on why electric cars are so expensive. 

High Research Costs

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Making electric vehicles is like starting from scratch – a very costly process! Research costs for electric vehicles are extremely high, and these costs are updated annually. 

To make matters worse, electric cars aren’t widely adopted, so these research costs must be divided among the few electric vehicle owners. 

This is why electric cars are typically more expensive than their petrol alternatives; the unit cost of electric vehicle research is much greater than that of petrol-based models. 

With technology advancing every year, this trend may soon reverse if electric car demand increases – but until then, interested buyers should understand that electric cars come with a hefty price tag due to the intense research required.

Lesser Competition

Electric vehicles may be the future of transportation, but electric car manufacturers face a major challenge: low competition. 

This keeps electric car prices higher than many consumers would like to see. Fortunately, electric vehicle companies are starting to sprout up all over the globe, increasing options for anyone considering an electric car purchase. 

This increased competition in the marketplace could mean lower prices for electric cars in the future as each manufacturer tries to edge out their competition and increase their market share. 

As more electric car companies become available, electric vehicles will become much more accessible to people and offer a viable alternative to gasoline-powered cars.

They Are a Status Symbol

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Electric Vehicles (EVs) are being more frequently discussed in the automotive world since they offer cleaner and more efficient transportation. 

EVs are considered a luxury because electric cars are typically more expensive than conventional vehicles. 

Many of these electric cars come with features that aren’t found in regular cars, like advanced driver-assistance and autopilot functions, further contributing to their status as luxury items. While electric vehicles may be considered luxurious, for others, it is simply an investment choice. 

EVs have been proven to be better for the environment and cost much less to maintain than traditional gas vehicles in the long run. 

So whether you get an EV for its perceived luxury or because it’s good for the planet, there’s no doubt electric vehicles play a defining role in today’s auto industry.

They Have Expensive Batteries

Certain factors need to be considered for electric cars to be a viable choice for most people. One of these is the cost of electric car batteries. 

While electric cars have become much more affordable over the last 12 years since the Nissan Leaf and Chevrolet Volt came out, electric car batteries remain more expensive than regular batteries due to their reliance on lithium-ion technology. 

This higher cost means electric car owners must pay close attention to maintenance to prevent damage or wear that may require expensive replacement parts or services.

High Insurance Costs

Owners of electric cars (EVs) often face more expensive insurance rates than owners of traditional gasoline-powered cars. 

This can be a real financial burden, but electric car owners can find coverage for less with the right research. 

Electric vehicle owners must compare multiple quotes from insurance companies to identify the best policy that suits their needs and budget. 

By comparing these quotes, electric car owners can better understand how electric vehicles are usually more expensive to insure than regular cars. 

With careful comparison shopping and an eye on discounts, electric car owners can reduce their premiums and enjoy their eco-friendly ride without breaking the bank.

Level 2 Chargers are Expensive to Install

Electric cars can certainly be a more eco-friendly choice for car owners, but with electric cars comes a price tag for charging too

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Level 2 chargers run about $2000 when installed, adding up quickly when many electric vehicle drivers need multiple vehicles to charge. 

That being said, electric cars usually offer advantages like incentives from certain electric companies or tax benefits, while the cost of electric charging is generally still less than gas in the long run. 

If you’re considering switching to an electric car, make sure to factor in these costs to know what you’ll be getting into financially.

Limited Tax Credits

Electric cars have long been viewed as a possible alternative to traditional gas-guzzling automobiles, but electric car automakers face a challenge regarding their cost. 

While electric car purchase prices may look attractive on paper, their costly upkeep and limited electric car tax credits can quickly increase over time. 

Unfortunately, electric car manufacturers like Tesla only offer tax credits up to the first 200,000 electric vehicles they produce. 

Electric car drivers will soon feel the financial strain of increasingly expensive maintenance costs as manufacturers start excluding customers from these important electric vehicle tax credit benefits.

The Motors Are Expensive

EVs are highly efficient compared to traditional internal combustion systems due to their electric motors. 

EVs contain more than one electric motor, making them significantly more expensive than gasoline or diesel-powered cars. 

This higher cost results from the electric motor’s increased efficiency and advanced engineering. As electric cars become a more viable and economical alternative, they may be much more affordable in the years to come.

They Use Inverters

One of the main components electric cars need is inverters, which are necessary to convert direct current from the car’s battery into the alternate current used by electric motors. 

This means electric vehicles have an additional cost that can raise their prices compared to traditional gasoline vehicles. 

However, electric cars are becoming increasingly popular, with some governments incentivizing people to opt for them over gas-powered alternatives. 

Inverter technology continues to evolve and advance, making electric vehicle ownership a better value for consumers.

The Drivetrain Is Expensive

Electric cars have a different drivetrain than traditional gas-powered cars, which includes a battery, a controller, a motor, and a gearbox. 

This makes electric vehicles more expensive to produce and ultimately increases the price of electric cars for consumers. 

Although electric vehicles may cost more upfront, they offer significant long-term savings on running costs such as fuel and servicing, making them an attractive option over their petrol-engine counterparts.

The Body and the Chassis Are Built Differently

Electric cars are the way of the future, and the build of their body and chassis is incredibly different when compared to regular cars. 

They are designed to withstand extreme temperatures as well as difficult conditions. 

As a direct result of the attention paid to the details and the quality built into electric car bodies and chassis, the cost of the vehicles has become more pricey. 

However, many electric car owners agree that the investment is worth it, given how fuel-efficient they are and the lower maintenance costs associated with these vehicles.

They Need Sophisticated Software

Electric cars are at the forefront of technology and efficiency, but they need sophisticated software to control their battery, electric motor, and other systems. 

Unfortunately, electric car software doesn’t come cheap, so electric cars are typically more expensive than those powered by a traditional combustion engine. 

This added cost can deter some buyers, but electric cars offer several advantages that make the price worth it: no gasoline costs or emissions, dramatically lower repair costs, and subsidies in many countries.

Key Takeaways

  • Because they are a new technology, electric cars need extensive research, which costs money. 
  • The lack of competition also adds to their cost. 
  • They are built differently and need sophisticated software that doesn’t come cheap.
  • Installing components like level 2 chargers also costs significantly high.
  • The lack of tax credits also makes them expensive.