Sign Up For Our Mailing Lists

InsiderOnline Blog: November 2012

Your Electric Vehicle Won’t Pay Off for Six and a Half Years

Even with government subsidies, electric vehicles are still too expensive to get most consumers to consider buying, finds a new study by J.D. Powers & Associates.

Of the consumers considering an EV as their next primary vehicle, only 11 percent list environmental concerns as a leading reason to buy, while 45 percent name the cost-savings benefit of an all-electric powertrain as their key reason to buy an EV. […]

Neal Oddes, senior director of the green practice at J.D. Power and Associates, said “there still is a disconnect between the reality of the cost of an EV and the cost savings that consumers want to achieve.”

Compared with sales prices for a similar gasoline-powered vehicle, the study finds that owners of electric vehicles pay a premium of $10,000, on average, for their vehicle, while plug-in hybrid electric vehicle (PHEV) owners pay a $16,000 premium, on average.

Based on annual fuel savings it would take an average of six and a half years for EV owners to recoup the $10,000 premium they paid at the point of purchase, while the payoff point for PHEV ownership is 11 years. Again, these payback rates are based on participant-reported averages.

“The payback period is longer than most consumers keep their vehicle,” said Oddes. [, November 15]

Good thing the auto industry is free to respond to consumer demand instead of worrying about political things like what kind of cars the Obama administration thinks it should build.

Posted on 11/15/12 05:25 PM by Alex Adrianson

Heritage FoundationInsiderOnline is a product of The Heritage Foundation.
214 Massachusetts Avenue NE | Washington DC 20002-4999
ph 202.546.4400 | fax 202.546.8328
© 1995 - 2015 The Heritage Foundation