An EV Is Cheaper To Own Than A Gas Car, Unless You Live In These States

CM Kia EV6

We look at how an electric vehicle may bring down your cost of car ownership, plus China's Leapmotor rises and Stellantis needs new models.

Around 10 years ago now, I was driving a second-generation (R56) Mini Cooper S. It was an absolute blast when it was running properly, which it almost never was. To this day, when one passes by and I hear the very distinct rattle from that 1.6-liter turbocharged engine, I can basically feel my bank account draining. At least I can sleep well at night knowing that all of those repair costs probably helped send my mechanic's kids to a nicer, better college than I went to.

For most electric vehicle owners, that sort of thing is generally a non-issue. On today's Monday edition of our Critical Materials morning news roundup, we look at the lower cost of ownership with EVs, plus we check in on China's Leapmotor on the rise and Stellantis' own product woes. Let's dig in.

30%: EVs Cost Less To Own Than Gas Cars In Most States: Study

I bring up my Mini Cooper anecdote so we can discuss one of the less widely discussed benefits of going electric: vastly cheaper running costs over time.

Sure, EVs still generally have bigger upfront costs to buy than their gas-powered counterparts (though that gap is closing fast and great used options are more abundant than ever.) And as with any new technology—including when you factor in new production methods like gigacasting—repair costs can be higher if you find yourself in an accident.

But when you cut out the cost of gasoline, fluids, replacement engine and transmission parts and much more, you do find yourself with a far lower cost of ownership in the long run. A recent J.D. Power analysis shared by Automotive News has some fascinating revelations, especially because this one breaks down costs on a state-by-state basis.

Each state is different when it comes to ownership costs because of variable factors like EV incentives and the cost of electricity, which can vary from place to place. In New York, where I live, this study indicates an EV owner will save $7,574 over five years versus a comparable gasoline vehicle. In Texas, where I'm originally from, that drops down to a still-not-bad $2,282 over five years; cheaper electricity, but no incentives and different registration fees. Fascinating, right?

In fact, ownership is cheaper overall in all 50 states except these two:

Despite high sticker prices, EVs had a cost advantage over gasoline counterparts in every state but Maine and West Virginia, automotive research firm J.D. Power found in a detailed analysis conducted in the first quarter for Automotive News.

Untangling the cost of owning a car is a complicated but essential exercise for buyers considering an EV over a gasoline-powered vehicle. J.D. Power analyzed many factors, including transaction prices, taxes, regional gasoline prices and electricity rates, and zero-emission vehicle incentives. The data suggests that long-term cost outweighs EV sticker shock for comparable vehicles.

Sorry, Maine and West Virginia. But hey, you're still talking about a delta of $1,619 and $1,800, respectively, and that's not bad. If you live in New Jersey, you save more than $10,000 over five years.

So why aren't automakers and EV advocates talking about this more? Part of it is because of how Americans buy cars: we're aggressively focused on monthly payments and the bottom-line price, not the other things that go into car ownership.

[...] "A lot of everyday shoppers view their financials through that traditional car deal lens where they're really just looking at that up-front transaction price," said Stewart Stropp, executive director of J.D. Power's EV practice. Car buyers tend not to focus on a total cost calculation because they have typically gone from one combustion engine vehicle to another, all with similar expenses.

Consumers expect to pay more to fill up an SUV than a sedan, but the fuel type remains the same from one gasoline-powered vehicle to another. Electricity changes the conversation. Fueling costs are a critical part of the EV versus gasoline vehicle purchase decision because electricity rates vary widely by state.

Electricity is expensive in the Northeast, where EV owners save only a small amount on fueling over five years. In California, EV drivers pay more on average for insurance compared with other states because they tend to drive premium models that are more expensive to insure. In Colorado, EV buyers receive up to $5,000 from the state for buying an EV, on top of the $7,500 federal tax credit.

But as one dealer interviewed for that story notes, most buyers still aren't waffling between buying an EV vs. a gas car; they typically know they want one over the other. Perhaps knowing more about the lower costs over time will help them come over to the battery-powered side of things.

60%: China's Leapmotor Is On The Rise

This year, we've spent a lot of Internet-Ink covering a few major Chinese EV brands we think are worth keeping an eye on. Those include BYD, Zeekr (really, the whole Geely Group), Xiaomi, Nio and more. Add Leapmotor to your list now; I certainly am.

The automaker just struck "a potentially transformational deal with Stellantis," as Bloomberg puts it, that will take its cars global. Since Stellantis is kind of a machine that absorbs various car brands, the play here seems to be "If you can't beat 'em, have 'em join you." It's not a full-fledged Stellantis acquisition (not yet, anyway) but the conglomerate gets a 21.2% stake in the Chinese upstart, two board seats, technology tie-ups and plans to make and sell some Leapmotor cars outside of China. And those cars are as high-tech as they are affordable.

So it's a big deal, in other words. From Bloomberg:

For instance, Leapmotor’s flagship C10 electric sport utility vehicle costs 138,800 yuan ($19,100) and comes with a range of 530 kilometers (330 miles), winning comparisons with Tesla’s Model Y, which starts at 249,900 yuan in China.

“Myself and my team, we’re good at electrical systems technology,” said Zhu, explaining his expertise was gained working for Motorola Solutions Inc. and then founding surveillance-camera company Zhejiang Dahua Technology Co.

That’s an advantage when making EVs, where about 70% of the technological components are electrical and 30% mechanical. The ratio is the reverse for gasoline-powered cars, Zhu said.

The core electrical parts that account for the majority of costs for Leapmotor EVs are produced in-house, allowing the company to cut out suppliers and save on expenses. This makes it one of the few Chinese EV manufacturers that is highly vertically integrated, along with BYD, and allows Leapmotor to sell at an affordable price point and survive what has been a bruising price war in the hotly competitive market.

Leapmotor is planning to launch another factory line in 2025 that it thinks will produce 300,000 cars annually, officials said. Get used to hearing about this brand; I think we all will more and more.

90%: Stellantis Needs More Cars, Of All Types

Speaking of Stellantis, it's got a problem in that it's finally realized it can't just coast on an aging family of Ram trucks to pay the bills forever. You think Tesla has an old lineup problem? Many of the Stellantis brands are absolutely starving for products of all kinds. The Dodge Hornet (PHEV review coming soon, by the way) is the first new addition to that lineup in years; Chrysler is as on life support as any car brand on earth; and most of the Jeep family stretches back into the 2010s, while a push to make them more "upmarket" fell flat on its face.

So Stellantis' answer is a product onslaught pretty much across the board, and that includes gas cars, hybrids, plug-in hybrids and EVs, just as Jeep officials told InsideEVs recently too. One thing we're especially excited about is the electric, $25,000 Jeep Renegade, but I've seen the new Wagoneer S in person too and it's pretty sharp.

The point is, Automotive News reports, dealers at all of these brands are mad and they want fresh metal like yesterday:

Retailers sent a letter to Stellantis CEO Carlos Tavares in late May that was "crystal clear" about their concerns and needs, said Kevin Farrish, chairman of the Stellantis National Dealer Council.

Farrish and several other dealers met with Tavares and North America COO Carlos Zarlenga in Detroit a few days later, where they brought up issues such as insufficient allocation of desirable trim levels of certain models. Dealers then pressed their case to executives at a June council meeting in Detroit where they discussed pricing strategy, incentives and fallout from CDK Global’s system outage.

[...] The Chrysler and Dodge brands also have gotten light on product as Stellantis prepares to launch their first electric models. But the smaller lineups haven't translated to lower inventory, as shipments of remaining nameplates pile up.

"Our dealer inventories have continued to grow, and it's just now that this is the tipping point," Farrish said. "Unfortunately, from a dealer perspective, we're carrying that extra inventory weight during periods of very high interest rates, so the dealer body is really getting harmed by that."

The June dealer gathering included a dinner in the design dome at Stellantis' North American headquarters with upcoming products on display. Despite his sales and inventory struggles, Farrish said he left the meeting optimistic about the automaker's product plans.

"We'll still have plenty of ICE vehicles, we're going to have hybrid vehicles and we're going to have EV vehicles," he said. "We're going to have something for everybody — and I like that."

I do think Stellantis has too many brands across the world; it's a lot of mouths to feed, but the company argues that this gives them unmatched scale for R&D and production. We'll soon find out how that plays in the electric era.

100%: What Is EV Ownership Like Where You Live?

I generally don't recommend you drive in New York City. I only do it when I'm testing a car for this fine publication or trying to leave it. But I gotta hand it to the Big Apple: it's getting better at EV charging and very quickly, too. New public Level 2 and even DC fast chargers are popping up all the time, thanks to some aggressive new startups and the city's willingness to fast-track some things.

A recent visit down to Texas, specifically San Antonio and Austin, had public charging that was much more hit-or-miss for me in terms of availability and functionality. But it's clearly on a growth trajectory and the same cities will probably be a lot better in six months to a year.

So what is EV ownership like where you live, in terms of charging, cost of electricity or even insurance?

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