The Expert Podcast

So, for many, many months—really almost two years now—we've talked about when is the time to buy an electric vehicle and how the current electric vehicle market is not really yet ready for prime time for consumers. There are a lot of reasons for this, which we'll talk about momentarily. But here's another example: another breakdown from banking rates about reasons you should not buy an electric car in 2023. Some of these hit on what we've talked about before, but we'll get into more details on top of that.

The important thing to know is you're going to buy an EV eventually, right? This is what the experts say: most big automakers are sunsetting combustion vehicles by 2035–2040. What does that mean by sunsetting? They're not making any more. In about 10 years, there will not be any more electric or gasoline vehicles to buy; everything will be electric. So, what do you do for the next 10 years? Well, you could buy an EV now, but EVs haven't quite become perfected yet. You still have range problems, charging problems, and battery problems that aren't ideal. They're getting better, but they're not perfect. So, if you want an EV for a second vehicle or maybe as kind of a tryout of the EV lifestyle, that's a different story. Most people don't have them for primary vehicles because gasoline is still better, even for cost. The cost of charging versus gasoline is kind of break-even based on the EVs being more expensive.

While you might have no choice but to buy an EV in 20 years, it's clear that electric cars are phasing out internal combustion engines, but they're still a higher price. The good thing is you won't have to worry about range much past another year. Home fast chargers are becoming more ubiquitous in your house, and we've talked about installing a charger in your house—it's pretty straightforward. But outside your house, not all places have charging ports. So, if you're outside of a city, it can be a headache to charge a vehicle. But within the next couple of years, there will be a lot more retail restaurants and even existing gas stations switching over to charging stations.

The biggest thing, though, is cost. Electric vehicles still cost more up front as a purchase than a gasoline vehicle, even with the new rebates that have been announced. Even if you take the rebate out, it’s still more money, and it might take you five or six years of saving money on electricity to make up the difference of what you pay up front for the car. We're still not at price parity with internal combustion engines. The gap is narrowing, but EVs are still $5,000 to $10,000 more at the time of purchase.

Let’s say it’s $7,000—let’s put the difference. If you save $1,000 a year, it takes you seven years to make up the difference. And you have to come out of pocket first for that money. So, it might be good if you're in the car evolution to get another efficient, good gas car right now. Plan on having that for three or four years, maybe at the end of the decade—2028–2029—maybe get an EV. See what’s available then. Still keep a gas car as your backup and then look at that evolution.

But because vehicles are changing, it's important to look at what your plans for the future are. One thing we can say is it’s probably a good idea to put a charger in your garage if you're going to be there for more than two or three years. The installation cost right now is subsidized and cheaper with inflation for copper wires and electricians. Two or three years from now, when everybody's doing it, it’s probably going to cost more to put in a charging port. And if you do it now, you’re not under any kind of pressure. Or, if you just bought a car and need a charger right away, some of the work you can do yourself.

If you buy the charging plug and install it in your garage, buy the wire, and hook it up to the plug and just run it—you don’t have to put it into your breaker box. You can hire an electrician to do that, but if you're doing the work yourself and just have the electrician connect the conductors, you can save some money. It's kind of like if you were going to hire an electrician to come put a ceiling fan in your house. You don’t want them assembling the ceiling fan from Home Depot. You don't want to be paying electrical rates for that. You can do a lot of the placement and structural work yourself and just have the electrician connect the conductors from the breaker into the plug.

Electric vehicles are coming. You’re not going to be driving a gas car 10 years from now, but it may not be time to jump in this year for your primary vehicle. It might be time to look at your next evolution in two or three years for a backup vehicle for an EV. Plus, put the charger in the garage.