Updated: May 20, 2024
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Electric vehicles (EVs) have changed the car industry. While there are still more Americans driving gasoline-powered vehicles, the EV market is growing as more people aim to reduce waste and their reliance on fossil fuels.
With hundreds of electric car models available, some consumers may find choosing the right vehicle daunting. Learn more about available EV options, how to choose an EV that fits your budget and tips for determining the best EV for your needs.
US. EV Market
The number of electric vehicles registered in the U.S. has reached millions as sales of EVs increased and is expected to continue to rise.
Electric vehicle registrations in the U.S. reached 1,019,260 as of Dec. 31, 2020. California reported the highest number of EVs with 425,300 or around 42% of total EVs nationwide.1
Sales of EVs in the U.S. jumped 83% in 2021.2
Four in 10 Americans or 39% say they will consider EVs the next time they buy a vehicle.3
In 2020, there were about 370 EV models available, a 40% increase from 2019.4
1AFDC, 2Reuters, 3Pew Research, 4IEA
There are a variety of reasons people typically consider buying electric vehicles. Some of the most common include helping protect the environment by cutting emissions and oil use, saving money on fuel and maintenance and for their convenience.
An EV is a type of vehicle that runs on electricity. Instead of an internal combustion engine, EVs run with the help of an electric motor. There are three types of EVs: Battery EVs (BEVs), Plug-In Hybrid EVs (PHEVs) and Hybrid EVs (HEVs).
With approximately 370 EV models currently available, choosing the best vehicle for you can be a bit challenging. Additionally, there are various factors you should consider, including cost, maintenance and safety.
Before buying an EV, it is important to understand how it differs from conventional vehicles. Knowing EV types and the benefits and drawbacks of each can help you find the most suitable electric car for your budget and needs.
Aspect | Electric Vehicles | Conventional Vehicles |
|---|---|---|
Cost | The average cost of a new electric | The average cost of a four-door |
Environment | EVs have less impact on the environment. | Conventional vehicles have more |
Fuel Costs | As of March 2021, the average cost to | As of March 2021, the average cost |
Maintenance | EVs tend to be cheaper because of the | Internal combustion engine |
Noise | EVs are known for their quietness. | It is possible to reduce conventional |
Safety | EVs are tested for safety. Since they | Conventional vehicles are tested for |
As you try to learn more about EVs, you may stumble upon several abbreviations. Among them are BEVs, PHEVs and HEVs.
These are the three types of electric vehicles — battery electric vehicles (BEVs), plug-in hybrid electric vehicles (PHEVs) and hybrid electric vehicles (HEVs). While all of them use electricity, each has unique features. Before deciding on what type you would purchase, it would help to compare the benefits and drawbacks.
BEVs are typically what people refer to when talking about electric cars. These are also known as full electric and all-electric. That is because they are exclusively powered by electricity.
BEVs tend to have zero-emission because they do not have any other actuation source aside from the batteries and motors. Compared to other EVs, BEVs have larger capacity batteries.
As the name suggests, a PHEV’s electric battery can be recharged from a plug and combines the use of electric motors and battery packs with an internal combustion engine. Because of this, it allows drivers to switch between using the engine and going full electric. That means the car can still run even if the electric charge is depleted as long as the fuel tank has gasoline.
Similar to PHEVs, HEVs have an electric motor and a combustion engine. The electric motor and battery packs aim to lessen the consumption of fuel by providing additional power when necessary, such as when accelerating or climbing hills. Depending on the model, an HEV can also run on motor power alone for low-speed driving.
Charging HEVs is done through regenerative braking instead of plugging into a power outlet.
There are several factors you should consider before buying an electric vehicle. Ask yourself what you need as a driver to determine if an EV is suitable for you. Will you use it regularly? How are you going to charge it?
Additionally, the upfront cost of EVs is higher than a gasoline-powered vehicle. So, consider your financial circumstances when making your decision. The following commonly asked questions about key considerations can help you assess if an EV is the right option for you.
What is your charging plan? This is one of the most important EV considerations pre-purchase. Will you go on long drives? If you plan to, you have to ensure there are charging stations for recharging your batteries.
Also, consider the cost of charging an EV. For instance, if you plan on charging it at home, it may take longer to reach a full charge.
The right charging plan can help reduce your worries about owning an EV. Remember, how often you charge your vehicle will be based on the size of the batteries. It’s important to review that feature prior to buying an EV, as well as where you plan on charging your EV.
Fuel costs are already less expensive with EV fuel versus gasoline. You can continue to keep your costs low by seeking free EV charging. Some malls, hotels and parking areas offer this service.
Charging during off-peak hours — between 10 p.m. and 8 a.m. — can also help you save money. Due to lower demand during these hours, utility companies typically charge less.
How far you can drive and the battery capacity depend on the EV model. It’s important to consider your travel needs to find the most suitable type of EV for you.
That said, only a few EVs offer less than 100 miles of range. The more affordable options can run for more than 200 miles on a full charge. Based on a study conducted by Edmunds, the 2021 Mercedes-Benz EQS 450+ has the highest range with an EPA estimate of 350 miles and a real-life range of 422 miles.
While EVs can help you save more money in the long run, the average cost of an EV is $55,000. That is $20,000 more than the average price of a four-door sedan. Additionally, there are other expenses you need to consider. For instance, the EV auto insurance you will need to select. There are several ways you can keep your EV purchase affordable and within your budget if you’re strategic.
The first thing you have to do is make sure you can afford an EV. You can create a budget by adding up your monthly income and expenses. Then determine expenses in your budget that could be reduced or removed so you can afford the monthly car payments.
One of the best ways to ensure that you are getting the right car is to check the features. For instance, higher-end EVs have a self-driving function. If this isn’t a priority for you, then choose a more basic model.
Financing a car can be expensive. An auto loan can help with the expense if your savings can’t cover the payment.
To promote using more environmentally-friendly vehicles, there are government tax breaks and incentives for EV users. For example, the federal tax credit can be as much as $7,500. Depending on where you live, there may be state and local incentives, too.
If you can’t afford to buy an EV, you can opt to lease one. This will allow you to use an EV for a specific period. After the lease term, you can either lease a newer model or purchase your own.
Similar to conventional cars, the cost to insure an EV depends on various factors. Insurance companies use personalized factors — such as your driving history, credit history, age, gender and location — to calculate insurance premiums.
Another factor that affects the cost of insurance is the car's make and model. For instance, Tesla car insurance costs are significantly higher than the average car insurance rate. The cost also varies depending on the specific model. A Tesla Model 3 car insurance costs an average of $1,712 per year. Meanwhile, the average insurance rate for a Tesla Model Y is $2,878 annually.
The best car insurance may vary per individual. The right policy is the one that provides you with coverage for your needs. When shopping for auto insurance, it is important to compare policies and options. Aside from the coverage levels, you should also evaluate the insurance providers and aim for at least three personalized quotes from various providers.
Using a car insurance calculator can help you estimate how much your car insurance would cost, which can help you identify your needs and budget.
Another consideration when purchasing an EV is if you should get a new or used one. Your financial situation will play a big role when making this decision.
Both options have pros and cons. For instance, new EVs have full warranty and tend to have updated technology and safety features. On the other hand, buying a used EV helps you save money.
For most drivers, purchasing a new EV can be expensive, but many newer models have features that older ones do not, such as a larger battery pack and advanced technology. Consider the benefits and drawbacks before you make your purchase.
You can save a lot of money choosing a used vehicle verse a new one. But still, you may want to consider the potential drawbacks, such as EV batteries degrading over time and gradually losing their ability to charge fully.
EV batteries can last a long time, but their performance deteriorates over time. Various factors, such as overcharging, operating in high temperatures, constant draining and high discharges, can also result in faster deterioration.
Manufacturers offer various warranties for EV batteries to protect consumers. The warranty period, number of miles driven and percentage guarantee vary depending on the manufacturer and EV model. These warranties are most beneficial for vehicles with a shorter range. That is because lower-capacity batteries are more prone to deep discharge.
To better understand battery life and warranties, consider talking with the manufacturer before purchasing an EV.
While there are hundreds of EV choices available globally, there are only 55 models currently being sold in the U.S. These include BEVs and PHEVs.
While EVs only make up a small percentage of the automotive market in the country, growth is seen in the number of users. Additionally, around 39% of Americans consider getting an EV for their next car purchase.
Evaluating your needs as a driver will help you in choosing the best electric vehicle. Determining what type of driver you are can also give you an idea as to what EV type and model is right for you. That said, you should also consider what car you can afford to buy.
Finding the best EV comes down to your needs and preferences. Understanding what kind of driver you are can help you narrow down your options and some drivers are more likely to purchase an EV than others. According to Fuels Institute, the average EV owner is a 40- to 55-year-old male earning more than $100,00 per year.
Type of Driver | Description |
|---|---|
On a Budget | For some car buyers, it all comes down to cost. Drivers on a budget compare cars by sticker price and other saving opportunities. |
Commuter | Commuters, especially those who regularly travel long distances, may find the best EV option is one that covers more miles. |
City Driver | Your needs also depend on where you drive. City drivers tend to face more complex situations. Urban areas tend to have more limited spaces and heavier traffic. |
Families | Buying a family car comes with different considerations. Aside from ensuring that the vehicle is enough to accommodate the whole family, you also have to consider the storage space and safety systems. |
Electric vehicles offer many benefits. However, not all models are the same. The best car is based on the type of driver you are and your needs as a consumer. To help you get started, MoneyGeek compiled EV recommendations for certain types of drivers.
Best type: Nissan LEAF
Best model: LEAF S
Model base price: $27,400
The Nissan LEAF S has an EPA estimated range of 226 miles. Its battery size can cover 40 or 62 kWh. Its base price is $27,400, which makes this appealing to drivers on a budget. Additionally, buying a Nissan LEAF qualifies you for the federal tax credits worth $7,500.
You can learn more about the Nissan LEAF, find a dealer near you or request a quote through Nissan USA’s website.
Best type: Tesla Model S
Best model: Tesla Model S Long Range
Model base price: $94,990
Tesla’s Model S Long Range boasts of a 405-mile range — a good option for drivers with long commutes. Additionally, this model offers a stylish but comfortable interior. As a Tesla car owner, you will also have access to the Tesla Supercharger network, which offers fast charging in all 50 states. You can also compare Tesla models to find your best fit.
Best type: Tesla Model 3
Best model: Tesla Model 3 Standard Range
Model base price: $40,690
Tesla Model 3 Standard Range offers a range of 267-272 miles. Its acceleration rate from 0-60 mph is 5.8 seconds and its top speed is 140 mph. Additionally, it has a comfortable and spacious interior. Tesla also has Supercharger stations in most major cities, making them easily accessible to city drivers.
Best type: Tesla Model Y
Best model: Tesla Model Y Long Range
Model base price: $54,690
Tesla Model Y Long Range offers a mileage range of 314-330. It has a 4.8-second acceleration rate when going from 0-60 mph. This model is slightly bigger than the Tesla Model 3. It also offers an option for a third row of seats, making it a great option for families. Depending on your state, the price may change. You can compare state prices in the model’s finance options.
Electric vehicles offer a lot of benefits. To help you decide whether EVs are for you or what type suits your needs, MoneyGeek asked some industry leaders to share their expert insight.
There are various factors to consider when it comes to electric vehicles. MoneyGeek listed some relevant resources to help you learn more about EV concepts.
Federal Resources
Resources by State
Other Resources
About Nathan Paulus
Nathan Paulus is the Head of Content Marketing at MoneyGeek, with nearly 10 years of experience researching and creating content related to personal finance and financial literacy.
Paulus has a bachelor's degree in English from the University of St. Thomas, Houston. He enjoys helping people from all walks of life build stronger financial foundations.
