UPDATED: Mar 13, 2020
It’s all about you. We want to help you make the right coverage choices.
Advertiser Disclosure: We strive to help you make confident insurance decisions. Comparison shopping should be easy. We partner with top insurance providers. This doesn't influence our content. Our opinions are our own.
Editorial Guidelines: We are a free online resource for anyone interested in learning more about car insurance. Our goal is to be an objective, third-party resource for everything car insurance related. We update our site regularly, and all content is reviewed by car insurance experts.
Amongst industry insiders, electric cars are increasing in popularity these days. But perhaps not surprisingly, industry watchers are the only ones well versed in this still up-and-coming new class of vehicles.
A new study recently released by IBM’s Institute for Business Value reveals a hefty interest in electric cars by those who know about them. In fact, one in five Americans in this group said they would be willing to consider buying an electric vehicle. However, 42 percent said they know very little about the cars, a disappointing fact manufacturers will need to overcome if they ever want to grab any real market share.
As reported by WalletPop recently, the electric car industry faces some challenges particular mostly to this type of vehicle, the first and most significant of which is cost. Both the Nissan Leaf and the Chevrolet Volt, the two most recent electric cars on the market, sticker price significantly above their more traditional counterparts with gasoline-powered engines—the Leaf at $33,720 and the Volt at $41,000.
Partly offsetting this expense, though, are the all-important fuel savings. The cost of electricity to drive one of these vehicles 10,000 miles a year is around $300, compared to a high MPG gas-burning vehicle like the Nissan Sentra, which would burn through approximately $1,000 worth of gas at $3 a gallon. As the cost of gas rises, especially come summertime, these savings will become more pronounced.
Another advantage: The federal government is offering a federal tax savings of up to $7,500 for purchasers of both the Leaf and the Volt. Along with the money saved on gas, that might be enough to spur some drivers forward to their local electric car sales lot.
But not so fast. Manufacturers face additional problems, most of which they just need time to solve and overcome. A lack of present competition keeps prices high for now, but in two years we could see 10 more major car companies launch pure electric cars in this country. As with most new electronic gadgetry, this suggests it might be wise for buyers to hold off on their electric car purchases until that time, when competition will most likely drive down costs.
Meanwhile, enthusiasts should give electric vehicles a test drive by renting one through a leasing company like Hertz or Enterprise Rent-A-Car, which are now buying a few in select geographic markets to expand their offerings and see how much interest they generate.
Finally, one additional major challenge with electric vehicles is their present inability to quickly charge at home or recharge on the road. Though recharging stations are expected to pop up in parking lots, at local businesses and at retail establishments in the future, for now, finding juice when you need it is a luxury.
In addition, batteries are expensive to replace, and experts say that adding a recharging portal to one’s home could cost as much as $2,000. This further complicates things, as most electrics only go about 80 to 150 miles on a single charge. (The Tesla, pictured here, is an exception, getting 245 miles per charge.)
In time, electric vehicles may rule the road. But for now, it’s time to work the kinks out and watch improvements to come.