A new report has exposed electric vehicles as wasteful money pits, living up to the adage: If it seems too good to be true, it is.
EV proponents often claim they’re cheaper to own than conventional gas- or diesel-powered vehicles, but that’s simply not true after accounting for the billions of dollars in costs government subsidies and mandates quietly conceal.
The stark reality is the average EV costs at least $53,000 more over 10 years than conventional vehicles, effectively doubling the price of the average new car.
But $22 billion in government handouts to EV owners and manufacturers absorb the extra expense at every stage of the vehicle’s life, from raw-material sourcing to battery charging.
Examining the numbers behind recharging makes this very clear.
While EV advocates claim charging costs are equivalent to $1.21-per-gallon gasoline, the real amount is an order of magnitude more.
Including the charging equipment, subsidies from governments and utilities and other frequently excluded expenses, the true cost of charging an EV is equivalent to $17.33-per-gallon gasoline — but the EV owner pays less than 7% of that.
Over 10 years, almost $12,000 of costs per EV are transferred to utility ratepayers and taxpayers, effectively socializing the price of recharging an EV while keeping the benefits private.
Due to high entry price points — the average EV costs $58,000, the average gas vehicle $33,000 — most EV consumers are affluent.
This is socialism for the rich: a transfer of costs from higher net-worth individuals to middle- and lower-income taxpayers.
It’s the equivalent of levying taxes and fees on public-transportation users and those who walk or bicycle to work and using the money to reduce the price of gasoline.
Everyone without a car would be furious if they found out their money was effectively being given away like this.
But that’s precisely what’s happening with EVs.
One reason EV recharging costs so much is the tremendous energy density of gasoline and diesel.
A single horsepower is 746 watts, so the engine in a typical American sedan is strong enough to provide more than the maximum amount of electricity four typical American homes are wired to handle.
Conversely, recharging a typical EV at home can consume 10,000 watts at any given time, roughly eight times the power an American home consumes on average.
Not only does recharging an EV require a large amount of electricity; it requires infrastructure capable of handling that much power.
Both are very expensive, and America’s electrical grid needs billions of dollars in additional upgrades to support more EVs.
Most major utilities have already conceded they won’t be able to meet the significant capacity additions needed to support proposed EV mandates.
Instead, utilities are reduced to begging customers to recharge during off-peak hours, often offering incentives like lower rates or bill credits.
Both the vast subsidization of EV recharging and the impracticality of making it a widespread practice are emblematic of the production and sale of EVs as well.
Average direct subsidies from federal and state governments amount to almost $9,000 per vehicle over 10 years while direct subsidies from utilities push the amount over $10,000.
But manufacturers receive subsidies too, and regulations force them to produce more and more EVs, even if the vehicles aren’t profitable.
The regulatory environment is so onerous and blatantly favors EVs, auto manufacturers can’t meet a range of federal requirements without shifting an increasing percentage of production toward EVs, even if consumers don’t want them.
Between corporate average fuel economy standards and Environmental Protection Agency rules, “EVs receive nearly seven times more credit,” the Texas Public Policy Foundation report notes, “than they provide in actual fuel economy benefits.”
Thus EVs have become the only way for auto manufacturers to comply with increasingly stringent regulations that will soon make conventional vehicles illegal — no matter how much consumers would rather have a gas- or diesel-powered vehicle.
Subsidies and regulatory credits amount to almost $50,000 per EV over a decade.
Amazingly, even with all these subsidies, mandates and other incentives, the report points out manufacturers are still losing tens of thousands of dollars per EV; consumers clearly don’t want them in the volume they’re being produced. That’s why they’re piling up on dealer lots.
The lack of demand has led GM and Ford to recently announce they must reduce battery production.
What’s even more amazing is the report actually underestimates the total cost of converting America entirely to EVs because it doesn’t attempt to measure many other additional costs.
These include billions of taxpayer dollars spent on electric buses, charging stations at airports, city taxpayer-funded subsidies and California-specific subsidies.
There are also many indirect costs like the disproportionate road damage caused by EVs, which are heavier than conventional vehicles.
Politicians can hide behind words like they hide the true cost of EVs behind subsidies and handouts, but the numbers don’t lie: EVs can cost twice as much as conventional vehicles, and that’s a losing deal for the taxpayers funding these money pits.
E.J. Antoni is a public-finance economist at the Heritage Foundation and a senior fellow at the Committee to Unleash Prosperity. Anthony F. Esposito is a chartered market technician and director of US equity execution at Scotia Capital (USA) Inc.
