Auto Insurance
Teslas Are Americans' Dream Electric Vehicles, But 67% Don't Know Electric Vehicles Generally Cost More to Insure
As public consciousness about the dangers of climate change grows and public policy begins to encourage the manufacturing and ownership of electric vehicles, ValuePenguin found that most consumers either drive an electric vehicle, want to have one in the next five years or want to buy another one. Just 37% say they don't want an electric vehicle.
While enthusiasm for electric vehicles remains high, consumers have concerns. The dependence of electric vehicles on charged batteries — as well as the potential difficulty of finding a place to charge and the amount of time it takes — is perceived as a disadvantage by consumers. But the relatively high cost of electric vehicles compared to gasoline-powered models is the chief concern. This is even as 67% don't know that electric vehicles are generally more expensive to insure — on top of the higher sticker price.
Indeed, ValuePenguin found that, on average, the cost of an electric car is more expensive than owning a gas-powered vehicle. Electric vehicles cost $4,338 more after the first year of ownership than non-electric vehicles. However, the longer a driver owns an electric model, the more affordable it becomes.
Key findings
- Americans’ dream electric vehicle is — you guessed it — a Tesla, taking 19% of the vote. The next dream electric vehicle brands are BMW (9%), Ford (9%) and Chevrolet (8%). As for the dream body style, SUVs take the top spot, followed closely by four-door sedans.
- 42% of Americans would consider buying an electric vehicle within the next five years — but nearly a third don’t want to purchase one. Baby boomers will be harder to convince than younger Americans. 40% of boomers don’t want to buy an electric vehicle, compared with 33% of Gen Xers, 28% of millennials and 19% of Gen Zers.
- Of the top five concerns consumers have about electric vehicles, cost, battery life, range and charging take the top spots. While cost is the No. 1 concern, respondents’ negative perceptions include the risk of running out of battery, difficulty finding a charging station, the length of time it takes to charge and concerns about range.
- Massachusetts and New York have among the largest cost differences between owning electric and gas-powered vehicles. Oregon, on the other hand, is the place where the difference in cost between owning these vehicles is most favorable.
- 67% of Americans aren’t aware car insurance is typically more expensive for electric vehicles. On average, car insurance for an electric vehicle is about 39% more expensive than that for an equivalent gas-powered model.
More than half of Americans either own or want to own an electric vehicle — or another one — within the next 5 years
The market for electric vehicles stands to heat up soon, though just 10% of consumers own electric vehicles now. While some of those who don't own an electric vehicle have before, that group of people is relatively small compared to the percentage who’ve never owned an electric model (79%). But 42% would weigh buying one, or another, in the next five years.
Seventy-nine percent of consumers have never owned or leased an electric vehicle, and just 37% of these consumers maintain they don't want one.
Younger people are more likely than older drivers to want an electric vehicle. With 18% of Gen Zers (ages 18 to 24) reporting ownership, electric vehicles are most common among the youngest generation. Additionally, 44% of Gen Zers and 47% of millennials (ages 25 to 40) would consider buying an electric vehicle within the next five years. Conversely, a minuscule 1% of baby boomers (ages 56 to 75) currently drive an electric vehicle, and 32% would consider buying one within the next five years — both lows.
The range of benefits that electric vehicles are believed to offer may be contributing to rising demand. Sixty-one percent of consumers say they believe electric vehicles are better for the environment than their fuel-burning counterparts. Fifty-four percent like that electric vehicles are responsible for lower fuel expenses. And more than 30% of people like that electric vehicles produce less noxious emissions (34%), run more quietly (31%) and can yield tax credits for their drivers (31%).
Answer | Percentage |
|---|---|
| Better for the environment | 61% |
| Reduced fuel expenses | 54% |
| Avoid breathing in emissions | 34% |
| They’re quieter | 31% |
| Tax credits | 31% |
| Fewer maintenance expenses | 22% |
| Easier to drive | 17% |
| They look cool | 15% |
| I don't think there are any benefits | 11% |
| Special parking spots or highway lanes | 10% |
| Other | 1% |
By a wide margin, Tesla has the most sought-after electric vehicles
Teslas are identified most frequently as the dream electric vehicle maker by consumers. Nineteen percent of people would purchase a Tesla if they could afford it — more than double the percentage of any other car manufacturer.
Teslas are the most popular electric vehicle among both men and women — and it's not close.
Car make | Percentage |
|---|---|
| Tesla | 19% |
| BMW | 9% |
| Ford | 9% |
| Chevrolet | 8% |
| Other | 7% |
| Honda | 5% |
| Audi | 5% |
| Mercedes-Benz | 5% |
| Cadillac | 4% |
| Lamborghini | 4% |
| Porsche | 3% |
| Lexus | 3% |
ValuePenguin gained additional insight into the types of electric vehicles in which consumers are most interested. Thirty-seven percent of consumers want an electric SUV. Thirty-six percent of people want a four-door or sedan model of an electric car, making it the model with the second-highest level of interest. Just 14% want a two-door or sports car model, while — despite the announcements of the electric Ford F-150 and Rivian electric trucks — only 9% most want an electric truck.
Meanwhile, a larger rate of consumers is drawn to hybrid electric vehicles than plug-in hybrids or cars only powered by batteries. Forty-six percent of people would want to own a hybrid vehicle with automatically charging batteries. Thirty-one percent would opt for plug-in hybrids, while fewer (23%) seek cars powered solely by rechargeable batteries.
Nearly 4 in 10 consumers wouldn't spend any extra money for an electric vehicle — and many cite cost-related concerns as disadvantages of electric vehicles
Thirty-nine percent of people wouldn't spend any more money on an electric vehicle over a gas-powered model. Sixty-one percent of consumers cite the expensive price of electric vehicles as a disadvantage. On the other hand, although cost is perceived as high for electric vehicles, data indicates that some consumers are willing to pay a little more to move away from gas-powered cars.
Twenty-four percent of consumers would be willing to spend up to 10% more for an electric vehicle compared to the cost of a conventional model. Another 21% would spend 20% more. Finally, 16% would spend at least 30% or higher. While price is at the forefront of most consumers' minds, they highlight other disadvantages.
Consumers commonly express concern about running out of battery (59%). Meanwhile, 56% worry about finding charging stations, and 55% think the amount of time electric vehicles take to charge is disadvantageous. Lastly, 32% view increased utility costs resulting from at-home charging as a downside.
Consumer concern | Percentage |
|---|---|
| More expensive to purchase | 61% |
| Risk running out of battery | 59% |
| Can be difficult to find a charging station | 56% |
| Charging can take time | 55% |
| Can travel less distance than regular vehicles | 34% |
| Less choice of make/model | 33% |
| Increased utility costs due to at-home charging | 32% |
| They don't fit my needs | 14% |
| I don't think there are any disadvantages | 4% |
| Other | 2% |
Electric vehicles cost $4,338 more than gas-powered vehicles after the first year, but conventional automobiles are more expensive over the long term
Indeed, it’s more expensive to purchase and own an electric vehicle than a conventional gas-powered model — in the short term. Considering the sticker price of the Tesla Model 3, Chevy Bolt and Nissan Leaf, along with the average retail price of electricity and premiums for full-coverage car insurance, the average cost of electric vehicles is $38,540 in the first year — $4,338 more than for a gas-powered car.
What to know about the Chevy Bolt recall: General Motors expanded its recall in August 2021 to include all Chevy Bolt electric cars over fire concerns with its high-voltage battery packs. The National Highway Traffic Safety Administration (NHTSA) has more information.
After the initial cost of buying the more expensive electric car passes, the cost of gas over time makes the gas-powered model more expensive. In ValuePenguin's model, expenses for electric vehicles after two years are $3,701 more expensive than their counterparts, $3,064 after three, $2,427 after four and $1,790 after five. After eight years, electric vehicles are the more affordable option, costing $121 less than a gas-powered car. After 10 years of owning an electric car, gas-powered alternatives are $1,395 more expensive.
Time period (years) | Electric vehicle | Gas-powered vehicle | Difference |
|---|---|---|---|
| 1 | $38,540 | $34,202 | $4,338 |
| 2 | $42,026 | $38,325 | $3,701 |
| 3 | $45,513 | $42,449 | $3,064 |
| 4 | $48,999 | $46,572 | $2,427 |
| 5 | $52,486 | $50,696 | $1,790 |
| 6 | $55,972 | $54,819 | $1,153 |
| 7 | $59,459 | $58,942 | $516 |
| 8 | $62,945 | $63,066 | -$121 |
| 9 | $66,432 | $67,189 | -$758 |
| 10 | $69,918 | $71,313 | -$1,395 |
Electric vehicles are most affordable relative to gas-powered cars in Oregon. After one year, expenses for electric vehicles are $3,940 greater than those for gas-powered cars. After five years, consumers spend $202 less on an electric vehicle in Oregon than they would for a gas model. On the contrary, electric vehicles are most expensive in Massachusetts, where consumers spend $4,574 more after one year than they would for electric vehicles.
The following table displays expenses for electric and gas-powered vehicles after one year:
Rank | State | Electric vehicle | Gas-powered vehicle | Difference | |
|---|---|---|---|---|---|
| 1 | Oregon | $38,458 | $34,519 | $3,940 | |
| 2 | Washington | $38,432 | $34,487 | $3,946 | |
| 3 | Alaska | $38,842 | $34,880 | $3,962 | |
| 4 | Nevada | $38,457 | $34,462 | $3,995 | |
| 5 | California | $38,730 | $34,672 | $4,058 | |
| 6 | Arizona | $38,516 | $34,378 | $4,137 | |
| 7 | Idaho | $38,427 | $34,286 | $4,141 | |
| 8 | Utah | $38,439 | $34,274 | $4,165 | |
| 9 | Montana | $38,465 | $34,279 | $4,187 | |
| 10 | West Virginia | $38,447 | $34,224 | $4,224 | |
| 11 | Pennsylvania | $38,492 | $34,263 | $4,229 | |
| 12 | Hawaii | $39,127 | $34,880 | $4,248 |
States ordered by difference in expenses after one year.
Part of the reason why electric vehicles are more expensive than regular cars is due to insurance costs. On average, the cost of insuring an electric vehicle is 39% more expensive than a gas-powered model. As with any car, the cost of coverage depends on factors unique to each car. For instance, it costs $3,921 a year to insure a Tesla, but $2,857 and $2,549 to insure the Chevy Bolt and Nissan Leaf, respectively.
Where is insurance for a Tesla available? Tesla's insurance product is available in California and is slated to be introduced in Texas in the future. This coverage promises to offer proprietary discounts for drivers who use Tesla's smart driving technology. Though Tesla's insurance is only available in one state, drivers can insure Tesla models with conventional providers.
But most people don't know that electric vehicles typically cost more to insure. Sixty-seven percent of people aren't aware that car insurance for an electric vehicle will likely be more expensive than it is for a gas-powered car. Nearly one-quarter (24%) think they can more easily find cheap insurance coverage for gas-powered cars, while 44% think coverage for both types costs about the same.
Methodology
ValuePenguin commissioned Qualtrics to conduct an online survey of 2,050 U.S. consumers from Aug. 2 to 6, 2021. The survey was administered using a nonprobability-based sample, and quotas were used to ensure the sample base represented the overall population. All responses were reviewed by researchers for quality control.
- We defined generations as the following ages in 2021:
- Generation Z: 18 to 24
- Millennial: 25 to 40
- Generation X: 41 to 55
- Baby boomer: 56 to 75
While the survey also included consumers from the silent generation (defined as those 76 and older), the sample size was too small to include findings related to that group in the generational breakdowns.
To assess the cost of purchasing, insuring and powering an electric car, ValuePenguin combined electricity costs per kilowatt-hour and gas per gallon from the U.S. Department of Energy with average miles traveled per year (13,500). Using these measurements, researchers constructed a model for determining the cost of electric and gas-powered vehicles.
ValuePenguin's analysis used insurance rate data from Quadrant Information Services. These rates were publicly sourced from insurer filings and should be used for comparative purposes only, as your quotes may be different.