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Firm Claims EVs Have Higher Early Costs
Service department at a Tesla dealership in Toronto. © JL IMAGES

Firm Claims EVs Have Higher Early Costs

By Boris Kamchev - Aug 05, 2021

Drivers of new electric vehicles face far higher service costs and insurance premiums than drivers of equivalent internal combustion engine cars, according to We Predict, a Michigan-based automotive analytics company.

In its inaugural Deepview True Cost report, We Predict found that 2021 model year EVs incur 2.3 times the servicing costs in the first three months after vehicle purchase. The report also found that repairs represent 77% of service visits in this initial period, while only 8% is maintenance.

For an EV, this service cost is an average of U.S. $123, while for a gas-fueled car it comes to $53. For a hybrid the cost is $46, or about one-third that of a battery EV.

The report also found that parts and labor costs for EVs are considerably higher than for gas or hybrid vehicles. Parts for EVs were on average $65, compared with $28 for gasoline cars and $24 for hybrid vehicles. Labor costs averaged $58, while gasoline vehicles averaged $25 and hybrids $22. One of the causes of the disparity was considered to be a lack of experienced repair engineers.

Deepview True Cost measures the amount of money spent by U.S. motorists and manufacturers of 2021 model-year vehicles after three months on the road. It reveals which brands and models across 21 segments, including EVs, have the lowest service costs.

The We Predict Deepview True Cost report includes more than 801,000 vehicles sold in the U.S. across 306 models, with results based on 1.6 million service or repair orders that totaled more than $128 million in parts and $254 million in labor costs. Included in the calculations are maintenance, unplanned repairs, warranty and recalls, service campaigns, diagnostics and software updates. Such items as gas, local and state inspections and insurance are not included.

One industry expert wrote that it isn’t easy to make side-by-side comparisons and cost analyses of service and maintenance for EVs and gas-fueled or hybrid cars. That is because of specific differences in ownership, including state and local incentives, and because not all EVs are subject to such incentives.

“Factor in that the current consumer demand for all vehicles, both new and used, is at an all-time high due to supply chain shortages of semiconductor chips,” Richard Counihan, CEO of DigniFi, wrote for the Wards Auto website. “In other words, service and maintenance are more critical now than ever before.”

Counihan also said EV owners should be aware that collision repairs may be costlier than repairs for gas-fueled vehicles.

“This is because EV battery packs are expensive and finding mechanics with specific expertise in that repair can result in higher prices for the consumer,” he wrote. “Even if a battery pack is not damaged in an accident, it will likely still need to be removed for safety which, in turn, adds to labor and insurance costs.”

According to Electrade, an EV owners’ web guide, overall repair costs associated with EVs are on average 5%-18% higher compared with an ICE vehicle in the same price range, while insurance premiums are 19% higher.