Are electric cars profitable?
The electric car market
Today, more and more people are turning to electric vehicles. This type of vehicle offers many advantages: pleasant driving, low noise pollution and they are more environmentally friendly than their combustion counterparts.
According to a study byAvere-France survey in June 2023, 230,743 electric and plug-in hybrid vehicles (cars and LCVs combined) were registered between January and June 2023. This is a record figure for electric mobility, since in the same period in 2022, 162,794 vehicles were put on the road. Comparing the two periods, this represents a 41.7% increase in the automotive market.
Motorists are being encouraged to switch to electric cars, but you're still hesitant about the economics. In this article, we'll give you the low-down on the purchase price, maintenance costs, lifespan and fuel consumption of an electric car.
How much does an electric car cost?
One of the most important criteria that most of us take into account is the purchase price. It's true that, if you look at the cost alone, it's often more expensive than a combustion-powered car. This is the first reason why many people are reluctant to take the plunge.
But thanks to government grants and subsidies which we'll explain later in the article, prices are becoming affordable and will be even more so in a few years' time.
To buy an electric caryou have the choice of :
- A brand-new electric car
- A used electric car
- Leasing an electric car (leasing).
The purchase price is bound to vary according to your situation and budget.
Let's see what happens in these 3 cases:
Buying a new electric car
If you choose to buy a new electric car, you'll need to budget between €20,000 and €30,000, or even more if it's a premium vehicle. It all depends on the car model,range and power.
According to a study carried out by UFC (L'Union Fédérale des consommateurs) Que-Choisir in June 2021, a new electric vehicle could save up to €1,750 over a 4-year period, compared with a gasoline-powered car. That's pretty good news, considering the numerous grants and subsidies we'll be discussing in detail.
Buying a used electric car
If buying a new car is too expensive for you, how about a used electric car? It's another way of getting a cheaper vehicle.
In fact, the price of a used electric car would be 20% to 50% lower, depending on the car's lifespan, mileage and overall condition. The price set by the leasing company depends on the car's overall condition and mileage.
Beev tip: before you buy a vehicle, be sure to calculate the discount on the electric vehicle and check its condition, especially that of the batteryto avoid unpleasant surprises.
Also read: Top 10 best used electric cars
Leasing a car (LLD, LOA or LMD)
You can also lease a vehicle. At Beevyou have three choices:
- Or lease the vehicle for a period, then buy it at the end of the contract to become the owner (LOA),
- Long-termleasing of an electric car: in this case, the vehicle is leased for a period of around 1 to 5 years,
- lease your electric vehicle on an LMD (medium-term lease) basis. This type of financing can be an interesting way to get started with electric vehicles, or to have a vehicle for a short period while you wait for your electric car to be delivered.
Read more: Should you buy your electric car under a leasing contract?
Discover several models of electric vehicles available for quick delivery!
What are the maintenance and running costs of an electric car?
To keep your car running smoothly, it's important to budget for electric vehicle maintenance. Did you know thatmaintaining an electric vehicle is more cost-effective than maintaining a diesel or petrol car? Let's find out how.
Electric cars: cost-effective maintenance
To extend the life of your electric car as long as possible, it's essential to maintain it.
Regardless of the type of vehicle, the older it gets, the more worn out the parts will be.
Apart from the parts that need changing, the cost of maintaining an electric car is around 35% less than that of a conventional car. This is due to the mechanical system of an EV. Unlike an internal combustion engine, an electric car has no wearing parts such as :
- The timing belt
- Drain
- Air filter
- Changing candles
With no wear parts to repair or replace regularly, visits to the garage are less frequent, reducing maintenance costs.
The only maintenance costs are :
- Brake pads
- The battery
- The tires
- Shock absorbers
- Brake fluid
- Coolant
- Windshield washer
As far as the cost is concerned, it's worth pointing out that after 5 years of use, the cost of maintaining an electric car is much higher. The average annual cost is no more than €800.
To find out more :
Cost of owning an electric car
A study carried out byUFC Que-choisirreveals the profitability of an electric vehicle. And it doesn't just stop at the purchase price. Instead, UFC Que-Choisir based itself on the cost of ownership, which covers all the costs associated with an electric vehicle: purchase price, resale price, energy consumed, maintenance, insurance).
For this study, UFC Que-Choisir took the view that, in general, a car has an average of 3 life cycles:
- Over a 4-year period, the car owner (electric, hybrid or combustion) can drive around 16,600 km per year. If we look at the cost of ownership for an electric car, the amount will be approximately €7,275, i.e. €1,750 less than for internal combustion cars,
- Over 5 years: with 13,500 km per year on the odometer, the cost of owning a combustion vehicle is €4,600, or €960 more than for an electric car,
- Over 7 years: for a car driving 11,500 km a year, the cost of owning an electric car is €2,470, compared with €3,660 for a petrol car.
Just by looking at the first life cycle, we can already see a big difference in the cost of ownership between an electric and a combustion-powered car.
That's why the mistake to avoid is focusing on the purchase price of an electric vehicle. The right thing to do is to take into account all the expenses involved in buying an electric car.
How much can you save with an electric car?
It's true that an electric car requires a significant investment to buy, but the advantages and savings that this vehicle offers are often overlooked. To encourage drivers to buy an electric car, several solutions exist.
Government grants and subsidies
You've undoubtedly heard of the many government grants available. If you're interested in buying an electric vehicle, you should know that the government can provide you with financial support. Let's take a look at the assistance to which you are entitled:
- Bonus écologique The Ecological Bonus is a subsidy that enables private individuals and businesses to buy a new, used or leased electric vehicle at a lower cost. The amount of the bonus depends on your profile (private or professional) and the price of the vehicle. Since January 1, 2022 and until now, the amount of the bonus is €6,000, but from January 1, 2023, the amount will be €5,000 for individuals and €3,000 for professionals.
- Conversion bonus The "conversion bonus" allows you to trade in an old vehicle, in return for a bonus granted to professionals and private individuals. It can also be used to purchase a new or used electric vehicle. The amount of the conversion allowance depends on the status of the household (taxable or non-taxable), and can be as much as €5,000.
For your vehicle to be taken back, several points must be taken into account:
- The vehicle must not weigh more than 3.5 tonnes.
- It must be registered in France, and the vehicle must belong to the person claiming the conversion premium.
- Your car's insurance policy must not have been valid for at least one year from the date it was handed in for destruction.
The aids mentioned above are national aids. In addition, you can also benefit from local grants depending on the region.
Discover the electric cars available from Beev
CO2 savings
Unlike a combustion-powered car, the use of an electric car saves CO2 and is one of the solutions for reducing one's carbon footprint.
In terms of production, the CO2 cost of an electric car is higher, especially with its lithium-ion battery. lithium-ion battery. Manufacturing alone emits a total of almost 7 tonnes of CO2, unlike the electric car, which only accounts for around 3 tonnes of CO2.
However, in the long term, the use of an electric vehicle would emit less carbon dioxide. According to the NGO Transport & Environmenta carbon balance was carried out to compare the CO2 emissions generated by electric and combustion-powered vehicles.
The same study also shows that, wherever they are produced and used, electric cars are still the vehicles with the lowest greenhouse gas emissions:
- If the battery is manufactured in China and driven in Poland, the study reveals that electric cars emit 22% less CO2 than diesel and 28% less than a petrol car.
- On the other hand, if the battery is manufactured and driven in Sweden, its production can emit up to 81% less CO2 than a diesel or petrol car.
These figures clearly show that switching to an electric car can considerably reduce air pollution and help protect the environment.
Fuel savings
Did you know that recharging an electric car is cheaper than using fuel?
Since the end of 2021, fuel prices have been on the rise. Today, to fill up with fuel, you need to spend at least €1.70 a liter for a diesel car and €1.80 a liter for a car using SP95.
Whereas for an electric car traveling the same distance, the average charge is €2 for electricity, and during off-peak hours, the price may be below average.
So.., charging an electric car costs 3 to 4 times less than the price of fuel. To recharge, you can go to a parking lot with self-access charging stations, or to supermarkets or service stations. You can also recharge from home. For the latter, you can take advantage of subsidies such as :
- The Advenir bonus: aid to finance the installation and supply of charging points
- Crédit d'Impôt pour la Transition Écologique (Ecological Transition Tax Credit): this tax credit helps reduce bills for insulating equipment or housing.
Electric car profitability: the car registration document
The government has also introduced another financial advantage for future electric car drivers: the vehicle registration at a reduced price.
To apply for a vehicle registration document, the procedures are the same for an electric car as for a combustion engine.
The vehicle registration document is subject to the cheval fiscal which varies from region to region. 4 taxes and a royalty are applied to the price of the fiscal horse:
- Regional tax
- Tax on polluting vehicles according to CO2 levels(ecological malus)
- Vocational training tax: it concerns commercial vehicles
- Fixed fee to cover management costs
- Delivery charge of €2.6 for sending the registration certificate by post
In the case of electric cars, the price per tax-registered horse is not taken into account when determining the total cost of the vehicle registration document. As a result, electric cars will not be subject to the ecological penalty, since they are zero-emission vehicles. Zero emission. This criterion is advantageous, and the cost is lower than that of a combustion-powered car, which emits an average of 40g of CO2 per km.
To find out the exact cost of your car, contact your local prefecture or do a direct for your vehicle registration certificate.
Is it profitable to convert a combustion engine car to electric power?
If you wish, you can also convert your combustion engine car into an electric car. All you have to do is remove the original mechanism and replace it with a battery and an electric motor: this is known as "retrofitting".retrofit".
Of course, this transformation must be carried out by a professional. To carry out this retrofit, you need to check the eligibility of your vehicle. In addition to cars, you can also retrofit other vehicles:
- Category L: motorcycles, mopeds and small three- or four-wheeled vehicles
- Category N : commercial vehiclessuch as trucks and vans.
- Vehicles over 5 years old: according to some manufacturers, more recent models can also be retrofitted. However, vintage and agricultural vehicles are not eligible for retrofitting.
In conclusion
To sum up, in the short term, the purchase of an electric car represents a significant investment, with insurance costs adding to the budget. However, in the long term, with the development of electric mobility, the constant optimization of vehicle performance and the financial support provided by the State, the purchase of an electric car is profitable.
Finally, given that by 2035, diesel and petrol cars will be banned from production and sale, electric cars will be more than necessary and indispensable for free circulation.
