According to a new true-cost study from data analytics firm We Predict, new electric vehicles (EVs) initially cost more to service than their conventional variants, but that gap shrinks over time. The study examines service histories for about 19 million vehicles spanning model years 2016-2021.
“The cost of keeping the vehicle in service for the EV, even as it gets older, becomes smaller and smaller and actually less than keeping an ICE (internal combustion engine) vehicle on the road, and that’s not just maintenance costs, but all service costs, individual component failure and what have you,” We Predict founder and CEO James Davies told Forbes.com.
The data shows EVs are 2.3 times more expensive to service than ICE vehicles after three months of ownership but only 1.6 times more costly to service after one year. The primary reason for the cost gap narrowing during those nine months is that EV maintenance costs became 77 percent lower than gas-powered vehicles.
The maintenance costs include both customer and manufacturer-paid service, but with the age of the vehicles in this report, the majority are covered under warranty. “Our view is to look at what is spent to keep the vehicle on the road-safe and operational, which includes amounts spent by both,” said Renee Stephens, vice president, automotive, We Predict.
Automakers have increased service coverage with the high cost of repairs to instill more confidence in EV buyers. For example, Volvo offers its Care by Volvo all-inclusive subscription package that includes regular maintenance for customers who buy the C40 Recharge or XC40 Recharge electric vehicles. Many automakers like Nissan offer 60-month/60,000-mile electric vehicle system coverage and 96-month/100,000-mile lithium-ion battery coverage on the straight warranty front.
For the second year of EV ownership, the We Predict study found the number of service incidents per 1,000 vehicles dropped 33 percent, and repair costs declined by 27 percent. However, third-year data brings even more good news for EV owners. While incidents per 1,000 vehicles fell by 14 percent, the cost to repair those vehicles decreased by an astounding 65 percent.
“It looks like the EV costs are actually very front-loaded,” Davies continued. “Once you get through the launch of a vehicle and get through the first three to six months, it’s just about trying to figure out how to fix the problems you have. Those costs begin to come down precipitously.”
The high initial costs to maintain an EV are due to service professionals taking longer times to diagnose an EV issue compared to a problem with a gas-powered vehicle. The primary reason is that EVs are still, for the most part, new and unfamiliar technology. As a result, service outlets are spending 1.5 times longer to fix EVs and charging an average labor rate that is 1.3 times higher. As training improves and techs become more familiar with EVs, repair times and costs will likely decrease.
Even among EVs, some models are doing far better than others in the way of service costs. According to We Predict, the Ford Mustang Mach-E is the runaway leader versus others in the electrified space. After three months of ownership, Mach-E service costs were only $93 per vehicle. By comparison, it is significantly lower than the Audi E-Tron at $366 per vehicle, the Porsche Taycan at $667 per vehicle, and the Jaguar I-Pace at a lofty $834 per vehicle.
