EV Costs—What a Difference a Day Makes
I wrote only three days ago about a study of EV costs that ranked all 50 states by the five-year cost of owning and operating an electric car. The good news is–it found the total cost of ownership over that period was positive (compared to a comparable gas-powered car) in 48 of 50 states.
New Jersey took the crown for the most encouraging state for EV owners, offering the possible that after five years an owner could end up more than $10,000 ahead of its petroleum-fueled compatriots. The numbers had a hiccup this month as the state decided to reverse a sales tax exemption for EVs that had been around for decades. In addition to paying 6.6 percent in state sales tax, EV purchasers also will need to pay into a state fund to pay for road repairs and other support for the state’s transportation infrastructure. The annual fee starts at $250 per year and go up $10 a year until its cap of $290.
The new charges knocked New Jersey off its Top EV State perch. It now sits at third behind Colorado and Illinois, according to the study down by J.D.Power and reported on in Automotive News. The bottom line for prospective electric car customers in New Jersey is you will still save a substantial amount over five years of ownership, just not as much as folks who bought their EVs a few years ago.
Different Year, Different Rules
The New Jersey sales tax exemption for EV purchases dated back to 2004, covering sales, rentals and leases for new and used zero-emissions vehicles. The exemption applied to any zero emission vehicle certified by the California Air Resources Board.
The new fee, which goes to the state’s Transportation Trust Fund, the same place state gas taxes end up. The Fund is used for the state’s infrastructure, including public transportation, roads and bridges. Other states have instituted similar fees as state gas tax funds have shrunk because of the increased fuel efficiency of vehicles. EVs, of course, use no gas, so they have not contributed to the Fund historically.
As if this is not enough, New Jersey’s Board of Public Utilities is also reported to be considering another change that will increase the EV owner’s out of pocket expenses. The state currently offers rebates for the installation of chargers, current $4,000. The proposal is to cut that in half.
The New Jersey story is a cautionary tale for those living with an EV. Much of the financial advantage of owning and operating an electric car is dependent on incentives and programs that are subject to change. The core expenses are well-known—EVs cost more initially, but save money in most places because electric motor efficiency delivers a lower cost per mile. The good news is the former is getting better as battery costs drop and competition heats up among automakers. The cost of electricity to go a mile is likely always going to be significantly less than gasoline. As I said a few days ago. The math can be challenging, so make sure you do your homework if those numbers are a critical part of your car purchase equation. The most recent and most
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