If you’re planning on buying an all-electric vehicle (EV), you may be wondering whether the extra cost to charge it is worth it. Is it really cheaper than the cost of gasoline? What about other costs that come with electric cars? Keep reading to find out.
Understanding electric vehicle (EV) charging cost
The good news is that EV charging costs are significantly less than gasoline. When you’re on the road, charging your electric car usually costs between $10 and $30. The price depends on the type of charger and how much charge you need. At home, your electricity bill obviously will go up, but it will still be cheaper than what you spend to fill your gas tank. Let's discuss some examples of home charging costs below:
Example of cost to charge at home
Let’s use Ontario as an example paired with a Nissan LEAF and a home charging station:
In Ontario, electricity is billed in two ways: time of use or tiered rates. With time of use, you pay different rates depending on the time of day. Tiered rates charge you more after you use a certain amount of electricity in a billing period. For an EV owner on Ontario’s time-of-use plan, charging a vehicle between 7 pm and 7 am (off-peak hours when electricity is cheaper) costs 8.2 cents per kilowatt-hour (kWh).
A Nissan LEAF with a 40 kWh battery has a 235 km range. This means fully charging the battery would cost you $3.28. So, if this vehicle uses an average of 16.6 kWh to travel 100 km, and, according to ThinkInsure, the average Ontario driver drives 16,000 km per year, that would equal an average of 2,656 kWh per year.
At $0.082 per kWh, the estimated cost of charging a Nissan LEAF in Ontario is $217.80 per year.
How do you charge an electric vehicle?
One of the main differences between a hybrid vs. gas-powered car vs. electric vehicle (EV) is how they work. Electric cars use a battery. When this battery is charged, it provides energy to the car’s electric motor, which then powers the wheels.
Unlike gas vehicles or hybrid cars, electric vehicles don’t use gas or diesel and don’t have an engine that burns fuel. They run only on their battery, which you charge with electricity. Many electric car owners install chargers at home, but there are also many public EV charging stations that can charge the car more quickly. In the following section, we'll explore the two methods for charging electric cars:
Home charging
When you own an electric vehicle (EV), you’ll mostly charge it at home. If you have a plug-in hybrid, which uses both a gas engine and an electric motor, you can use a regular household plug to charge it. But for a fully electric car, this method is too slow and can take several days to charge the battery fully.
To charge a fully electric car at home, you’ll need a Level 2 charger. This type of charger uses a 240-volt outlet and costs between $1,500 and $3,000 or more, depending on your location and any necessary upgrades to your home’s electrical system. Some places offer incentives to help cover this cost. Once you have the Level 2 charger, you’ll be able to charge your EV at home.
Public charging stations
Another way to charge your electric vehicle (EV) is at a public charging station. In Canada, public EV charging stations don’t charge you based on the amount of electricity you use. Instead, you pay for the time you spend charging, which can vary. Here are the types of public electric car charging:
Level 2 chargers
You can find Level 2 chargers, like the ones you use at home, in places like the mall, at a gas station, or at parks. These chargers work at the same speed and are good if you plan to stay for a few hours. Sometimes, Level 2 chargers offer free charging, but other times, you might pay around $1.00 per hour. However, since they charge slowly, they might not always be convenient.
Level 3 chargers
For faster EV charging, look for DC fast chargers, also known as Level 3 chargers. DC fast charging allows you to charge a nearly empty battery quickly. Most EV drivers spend 30 minutes to an hour at a Level 3 charger. These chargers usually charge by the minute, with costs ranging from 15 to 57 cents per minute, depending on the location, network, and speed of the station.
To prevent early battery wear, Level 3 charging stations slow down their charging speed when the battery reaches 80%. This means the cost per kWh increases the longer you keep your car on the charger.
Tesla Supercharger
A Tesla Supercharger is made for “rapid charging.” This means it can charge an electric car battery very quickly, usually in under an hour. However, Superchargers are only for Tesla cars and work with specific models.
What is the true electric vehicle cost?
It’s time. If you own a home, most EV owners can easily set their car to charge overnight, and it doesn’t inconvenience you. But if you live in an apartment or condo and need to use public charging stations, it can be a huge inconvenience.
If you live somewhere where only Level 2 (240V) charging stations are available, it can take anywhere from four to ten hours to fully charge an all-electric battery vehicle. If you’re within walking distance, you can at least set your vehicle to charge and walk back home, returning when it’s finished.
However, if you’re fortunate enough to live within driving distance of a Level 3 (50 kW or higher) charger, you should be able to charge your EV in one hour or less. While this is much faster, it still means you have to find something to do while your vehicle is charging for the hour.
Plus, many public stations charge an idling fee if you don’t move your car within a few minutes of it reaching full charge. This means you must make sure to monitor your charging session to avoid extra costs.
Other costs that come with electric cars
We’ve covered the cost of charging at home and using a charging station. We even mentioned the cost of installing a home charging station. Now, let’s cover some of the other extra costs that come as part of the package of owning an electric vehicle (EV), Including:
Additional home charging costs
Charging your EV at home is cheaper than charging on the road, but it’s not free. First, you’ll need to install an EV charger at home, which can cost up to $3,000. Remember, most EV chargers last about ten years, so plan to replace it after a decade.
If your home’s electrical system can’t support an EV charger, you’ll need to upgrade it, which costs extra. Most homes have a standard 120-volt outlet, which is good for a Level 1 charger, but this charger is too slow if you drive daily. A Level 1 charger can take up to 36 hours or more in winter to fully charge an EV. So, if you drive every day, you’ll need a Level 2 charger, which requires a better electrical system.
Replacing the battery
You might think an EV battery costs the same as a regular car battery, but that’s not true. EV batteries are much more expensive, ranging from $10,000 to $20,000 to replace. Electric car batteries usually last about 100,000 miles, so you’ll need to replace them eventually, especially if you drive a lot. To make your EV battery last longer, you might want to avoid using DC fast chargers or charging your battery past 80%, as these can wear out the battery faster.
Higher repair costs
Since electric cars are still new in Canada, not all auto shops and dealerships know how to fix them. Those that do often charge more for repairs. Also, parts for EVs, like batteries, are more expensive than parts for traditional cars, making repairs costlier. Some studies show that owners of electric SUVs might pay 50% more for repairs than owners of gas SUVs. Even so, regular repairs and electric car maintenance are important to keep your vehicle safe and running well.
Increased car insurance premiums
If you drive an EV in Canada, expect to pay a bit more for auto insurance. For example, Tesla car insurance may be more expensive than gas car insurance because EVs are more valuable. Also, since EVs are still new, repairs can be harder and costlier, and not all auto shops have trained staff for EV repairs.
Therefore, EV drivers can expect higher insurance premiums compared to those with a gas-powered car. However, some insurance companies in Canada offer discounts to drivers of electric or hybrid cars to encourage environmental friendliness.
Car insurance for electric vehicles
Electric car insurance is required in Canada, no matter where you live or what type of electric car you drive. All EV drivers must have liability car insurance that includes third-party liability coverage and accident benefits coverage. Some provinces also require uninsured motorist coverage and direct compensation-property damage coverage. Here’s what these coverages provide:
Third-party liability coverage
Third-party liability coverage is the first mandatory part of electric car insurance in Canada. It offers legal protection if you injure someone or damage their property, like their car. This coverage can help pay for medical bills, car repairs, court fees, and settlements up to a certain limit. The minimum amount of this coverage required depends on the province, with the most common requirement being a minimum of $200,000.
Accident benefits coverage
Accident benefits coverage helps if you, a passenger or a pedestrian, need medical care after a collision. You can get compensation from this coverage no matter who caused the accident. It can help pay for medical expenses like prescriptions, physical therapy, rehabilitation, loss of income, and other related costs.
Uninsured motorist coverage
Uninsured motorist coverage protects you and your passengers if you’re in an accident with a driver who doesn’t have enough insurance or any insurance at all. This coverage also helps if you’re the victim of a hit-and-run.
Direct compensation-property damage (DCPD) coverage
Finally, if you live in a province with a “no-fault” insurance system, DCPD coverage helps cover the cost of damage to your vehicle and its contents by going through your own insurance company instead of waiting on the other person’s insurance. This means if you file a claim, your insurance company will pay directly for the repairs or replacements.
Optional car insurance for electric vehicles
Standard car insurance in Canada includes only the mandatory coverage types mentioned above. However, there are several optional coverages available for drivers. While these are not required by provincial law, they can be useful for drivers of hybrid and electric vehicles. Here are some popular options:
Collision coverage
Collision coverage helps if you have an accident with another vehicle or object on the road. No matter who is at fault, this coverage can help you pay for repairs or the replacement of your vehicle.
Comprehensive coverage
Many EV drivers opt for comprehensive coverage for added peace of mind. Including it in your electric or hybrid car insurance policy will protect you and your vehicle from non-collision-related incidents, such as theft, vandalism, water damage, fire, and other risks.
Accident forgiveness coverage
Another popular optional coverage for Canadian EV drivers is accident forgiveness. You can add this to your electric car insurance policy to protect your driving record and prevent your insurance premium from going up if you have an at-fault accident.
Loss of use coverage
Finally, loss of use coverage helps if your car needs to be repaired or replaced due to damage or loss. This coverage temporarily pays for transportation costs while you are without your vehicle, such as public transit, taxis, or rental cars.
Contact BrokerLink today to learn more about car insurance
If you have any questions about the costs of buying or charging an electric vehicle or about electric car insurance, get in touch with BrokerLink today. We are a full-service insurance brokerage that can assist with all your auto-related inquiries. Whether you’re looking for a free car insurance quote or advice on lowering insurance costs, we’re here to help. Contact BrokerLink online, by phone, or visit one of our branches across Canada to get started.
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