The Automotive Troublemaker: What's Cheaper to Own?

Which Is Cheaper To Own, EV or ICE?, Inflation Down, Unlocking EV Range

It’s a new week and we’re in a new(ish) location, coming to you live from the 3rd Annual Beaver Toyota of Cumming Charity Golf Tournament. We’re covering a surprising JD Power study that shows that EVs are cheaper to own than ICE vehicles, how the auto industry is influencing inflation, and Tesla’s new “energy boost” software.

While the high upfront cost of EVs deters many buyers, a J.D. Power analysis reveals that EVs are cheaper to own than gasoline-powered cars over five years in nearly every U.S. state.

-EVs cost less to own long-term than internal combustion engine (ICE) vehicles in every state except Maine and West Virginia.

-J.D. Power considered transaction prices, taxes, regional gasoline and electricity rates, and zero-emission vehicle incentives.

-EVs averaged $57,584 in Q1 2023, about $13,000 more than gasoline vehicles.

-In some states, EV owners can save over $9,000 in five years.

-Some dealers, like William Knowles, COO of Maroone USA with 7 dealerships in Colorado, see that the entry price of EVs is still prohibitive. "Even with the EV tax credit and incentives, it's just really hard to come close [to a low priced ICE vehicle]."

-He also noted that most EV buyers aren’t choosing between an EV and an ICE. They know they want an EV from the start.

There’s some good news on the inflation front. The Consumer Price Index (CPI) fell by 0.1% from May, slowing the annual inflation rate to 3% from 3.3%. This marks the first monthly decline since May 2020, driven by falling gas and car prices.

-The core CPI, which excludes energy and food, also slowed more than expected, rising only 0.1% from May.

-Shelter costs, a significant component of the CPI, have started to ease, with the shelter index rising only 0.2% in June, the slowest increase in three years.

-Wells Fargo noted that consumers are feeling increasingly strained, making it harder for businesses to pass price increases on to the consumer.

-Auto insurance rates have surged by 19.5% over the past year, with the national average for full coverage nearly $2,300 annually or $190 monthly, driven by higher vehicle repair costs, riskier driving behaviors, and increased attorney involvement in accident claims.

-These rising insurance rates, coupled with higher gas prices and vehicle maintenance costs, are straining household budgets and dampening the typically busy spring and summer car-buying season. Rates are expected to stabilize in 2025.

Tesla is now offering an “energy boost” software upgrade for recent Model Y RWD owners to unlock additional battery capacity at a cost.

-The Model Y RWD has seen significant changes, including fluctuating prices and the introduction and cancellation of the "Standard Range" model.

-When the SR model was canceled, Tesla announced the batteries were larger than advertised and planned to offer software unlocks to increase range by 40-60 miles for $1,500-$2,000.

-The upgrades are now available, with some owners seeing offers for $1,600 to add “up to 50 miles” and others for $1,000 to add “up to 30 miles.”

-These figures are slightly lower than the initially promised 40-60 miles.

😎 Check out more episodes of The Automotive Troublemaker here! 👀