Electric cars powered by batteries: Are they financially competitive compared to traditional vehicles?
In recent years, the debate surrounding electric vehicles (EVs) and their affordability has been a hot topic. To shed some light on this issue, let's examine the costs associated with owning both battery electric vehicles (BEVs) and internal combustion engine vehicles (ICEVs) in Germany, particularly focusing on the C-segment and A-segment vehicles.
According to data from the Federal Ministry for Economic Affairs and Climate Action (BMWK) and the Federal Office for Economic Affairs and Export Control (BAFA), purchase incentives are currently offered for BEVs in segments A and C in Germany. This initiative aims to make EVs more accessible to a wider range of income brackets.
When it comes to the highest income bracket, the annual cost of owning a C-segment BEV represents just 6% of net income. Regardless of charging strategies, BEVs have lower charging costs compared to ICEVs in the same segment. In various charging scenarios, BEVs are cheaper to charge than fueling comparable ICE gasoline models.
However, for individuals in the lowest income bracket, the annual cost of owning a C-segment BEV represents an unrealistically high share of household net income (87% with the one-time purchase incentive). Even the cheaper A-segment BEV costs around 47% of the yearly household net income for this group, when including the incentive.
It's worth noting that the total costs over four years increase with greater reliance on public charging for BEVs. On the other hand, the costs for ICEVs are relatively consistent, as they rely on fuel costs that remain relatively stable over time.
In conclusion, while the initial costs of purchasing a BEV can be high for some income brackets, the lower operational costs over time, particularly in charging expenses, make BEVs a more cost-effective choice in the long run, especially for those who can afford the upfront costs. However, for those in the lowest income bracket, the high initial costs and the potential for increased costs over four years due to public charging may make ICEVs a more viable option at present.
As the EV market continues to evolve and technology improves, it's likely that we'll see further reductions in the cost of BEVs, making them more accessible to a wider range of income brackets. In the meantime, it's essential to consider the unique financial implications of owning both BEVs and ICEVs when making a purchasing decision.
