With a variety of powertrain options available, today’s vehicle shoppers have much to consider: Should they stick with an internal combustion engine (ICE) vehicle, go fully electric, or opt for a hybrid?
Regardless of the choice, understanding the total cost of ownership is crucial to avoid unexpected expenses and potential issues in the future.
“The total-cost-of-ownership equation includes factors like insurance premiums, fuel efficiency, repair expenses, and home charging infrastructure if purchasing an electric vehicle (EV), among other aspects,” said Chong Gao, director of product management R&D at Mercury Insurance.
“An EV, for example, might seem appealing for its expected fuel savings and lower maintenance costs, but insurance for them is on average 20% higher compared with an ICE vehicle, and they are typically more expensive to insure compared to hybrids as well,” continued Gao. “However, as more people adopt EVs and insurance companies gather more data in the future, their insurance costs will likely even out.”
ICEs, hybrids versus EV vehicles
Fueling/charging costs: Hybrid vehicles are equipped with both a gas engine and an electric motor, offering better fuel efficiency than traditional ICE vehicles. Additionally, hybrids don’t require external charging since their batteries are recharged by the gas engine, saving drivers the hassle of installing home charging systems or relying on public chargers.
When it comes to charging EVs, the Department of Energy reports that about 80% of all charging is done at home. Consumers should be aware that they will need to consult an electrician to install a Level 2 charger, but some states and localities offer incentives to help cover the cost. According to many industry reports, satisfaction with public EV charging overall is still poor.
Maintenance: ICE and hybrid vehicles share several maintenance requirements, such as air filter replacements and oil changes, leading to similar upkeep costs. However, one key difference is that a hybrid’s battery will eventually need to be replaced, which can be expensive. Fortunately, US law mandates that all hybrids come with battery warranties of at least eight years or 100,000 miles, providing consumers with peace of mind for long-term ownership.
EVs, on the other hand, do not need many of these routine services as they lack an internal combustion engine, pistons, valves, and other moving parts. This can result in lower routine repair and maintenance costs compared with ICE and hybrid vehicles. EV owners replace tires more frequently than others and, similar to hybrid vehicles, the EV battery will eventually need replacement. However, all new EVs come with a generous battery warranty, ensuring coverage for several years and providing additional security for owners.
Insurance: While EVs may offer a number of advantages in terms of reduced maintenance and fueling costs, the cost of insurance might offset these potential savings.
“EVs cost more to insure versus their ICE counterparts because they generally cost more to buy and more to repair or replace,” said Stephen Crewdson, senior director of insurance business intelligence at J.D. Power. “While today’s EVs have fewer moving parts, it can be costly when they need replacement.”
“If the battery pack is damaged, for example, the battery itself is a large expense and certain safety protocols are often necessary, which leads to a higher repair bill,” he added. “Plus, there aren’t as many repair shops with technicians trained to work on EVs, which means these facilities can charge more for the specialized knowledge they provide.”
“The best vehicle type for a particular consumer will ultimately come down to budget, lifestyle factors, and personal preference,” said Gao. “Hybrids serve as a great bridge between ICE and EVs by offering fuel efficiency and a reduced carbon footprint for consumers who aren’t yet ready to make the leap to an EV.”
Filed Under: Technology News