The additional costs of electric vehicles
Electric vehicles may not be a one-size fits all answer.
One year into Covid, I sold my car. The steering had gone for the third time, and I had paid more for my parking permit than I had spent on gas. At that point, I knew that following my graduation from law school I would be working downtown, where the price of parking would make driving to work a non-starter. Since saying goodbye to my car, I have been asked frequently if I plan on getting a car again, and if so, what I would like. My answer is always the same: if possible, I would like to hold out on getting another car until we get to a point where electric vehicles (EV) become more affordable. But this thing I am holding out for, an EV in the price range of a Prius, is probably not coming. In 2021, the cost of a new EV would run, on average, $10,000 higher than the average car price. While there are tax credits to help offset this cost difference, not all EVs, even brand new ones, qualify for them and industry and environmental standards remain something of a moving target. Furthermore, it is unlikely we will see these costs coming down in the near future, as EVs remain 45% more expensive to produce than gas-powered cars.
The conversation about EVs and their costs tends to be heavily concerned with the cost of the car, with some consideration given to the availability of fast charging stations across the country. But there are other less visible costs to owning an EV that we also need to think about, and that leads me to believe that they are not the one-size-fits-all transportation solution we are all counting on. The two of these I want to focus on now are the power grid and living situation.
The ability of the power grid to support EVs is a topic that remains up for debate. Some studies indicate that to phase out gas-powered vehicles by 2035, which many countries aim to do, there will need to be substantial updates to the existing grid infrastructure. Studies show the United States, for example, will need to invest approximately $125 billion in grid infrastructure. Getting to net zero will have a dollar cost, this is not something that comes as a surprise, but it is a reality that governments need to prepare and budget for. Others argue that capacity is not the issue, but rather the source of the electricity. For EVs to have the environmental impact we hope for, Canada, for example, will need to increase its use of renewable energy sources like wind and solar by 75%. The power behind the grid is a necessary consideration if we truly seek to address fossil fuel emissions rather than simply shifting them from one source to another. As of 2021, 18.9% of Canada’s total energy supply and 12.4% in the United States comes from renewable sources. If the intention is to increase reliance on the electricity infrastructure to power our cars, then these percentages will need to increase, at a minimum, in line with the increased consumption.
The second set of costs that we don’t talk about when it comes to widespread ownership of EVs are the broader surrounding circumstances to facilitate ownership. Chargers for EVs, which owners typically need to have installed in their homes, typically cost from $600 to $1,300 in Canada, with an additional installation cost averaging between $400 and $1,100 before taxes. This is not an insignificant expense. The difficulty of this additional high cost is that it creates prerequisites for purchasing an EV. Not only is the cost a disincentive from purchasing an EV while living in a rental unit, something that, given current housing prices in major Canadian cities, many will be doing for a long time. It also makes it impossible for anyone who does own a home, but does not have a driveway, to install an EV charger. The result of this is that EVs as a climate change ‘solution’, so to speak, is reserved for those living in a particular niche that many will never attain for one reason or another.
For anyone in the position to own an EV, and who is at the point of needing to replace their car, they remain an important part of achieving net zero, an option that is worth embracing. But they are likely to remain a much smaller part of that solution than many had hoped in the immediate future. It will still be necessary to focus on improving public transportation infrastructure in urban environments, and finding more options for and combinations of low-carbon and no-carbon transportation systems that are genuinely scalable for the mass market.