A new study highlighted the disparity between the ownership costs of premium electric vehicles and their gas counterparts, versus the ownership costs of mass-market EVs and equivalent gas cars. The data is part of JD Power’s E-Vision Intelligence Report, and it highlights one of the major challenges facing the EV industry: Price parity with gas cars.
The average five-year cost of ownership of a premium EV is $287 more than comparable ICE vehicles. Mass market EVs, on the other hand, cost $9,529 or 18 percent more than their ICE counterparts over five years of ownership. The average premium EV buyer is paying just 0.4 percent more than what they would for owning a gas car.
Relative affordability is at the heart of this non-linear trend. Automakers transitioning to EVs tend to launch expensive, halo products first, which are succeeded by more affordable models. In fact, 76 percent of EV sales are occurring in the luxury market, the report added.
Tesla’s early models were the Roadster and the Model S, General Motors launched the Hummer EV pickup and SUV before it even announced the Ultium-based Bolt successor, while Rivian’s R1 platform will precede the R2 platform by at least half a decade, and that’s if the start-up sticks to its 2026 timeline.
The Mercedes-Benz EQB has an average five-year ownership cost of $72,107. A comparable ICE vehicle would cost just 71,420, which is only $687 less. In fact, the Ford Mustang Mach-E, which JD Power considers a mass-market model, costs $67,719 over five years to own and will dent customers’ pockets with more than $16,000 in ownership costs over the same period than a comparable gas-powered crossover.
However, the study predicts that the 2024 Chevrolet Equinox EV would “start a movement towards parity in the mass market.” GM has said the Equinox EV, which entered production at its Ramoz Arizpe plant in Mexico this year, would start at $30,000 (before taxes and fees) for the 1LT variant.
“We are at a turning point where EVs will be the mainstream choice for the next generation of customers and Equinox EV will lead this charge for us,” said GM CEO Mary Barra when the Equinox prices were announced. “With the flexibility of GM’s Ultium platform, we are bringing to market vehicles at nearly every price point and for every purpose,” she added.
GM made similar promises with the Silverado EV and the Blazer EV but failed to deliver on them. It had promised a $40,000 electric truck in the past, but had to cancel those plans – the Silverado EV now starts at over $70,000. In July 2023, Chevrolet killed the entry-level 1LT trim of the Blazer EV which was supposed to cost around $45,000.
The JD Power report adds that the electric compact SUV segment is a priority for manufacturers, and planned affordable models could bring price parity to more segments in the future.