Considering buying an electric or hybrid vehicle? With the savings in fuel, maintenance costs, higher selling price and government incentives that have to be taken into account, calculating the actual cost can be difficult. Here’s an overview of the financial aspects to consider.
Choosing a vehicle
All-electric or plug-in hybrid?
An all-electric vehicle operates without gas. After a full charge, it has a range of 100 to 400 km, depending on factors such as model, age, driving distance and temperature. It can generally be plugged into a household outlet (120 volts [V]), a 240-V charging station and a fast charging station.
The charging time depends on the vehicle’s battery specifications. To charge your battery from empty to a certain percentage of its range, it’s wise to consider the following:
- About one day on a 120-V outlet, and more for long-range models
- 7 to 9 hours on a 240-V charging station
- 20 to 60 minutes on a fast charging station, for up to 80% battery life1. The charging time may be longer for certain models in cold weather2.
A plug-in hybrid vehicle combines an electric engine with a combustion engine. A full charge allows you to travel 50 kilometres on average before having to use fuel. A plug-in hybrid will still use less fuel than a similar traditional vehicle since it will use electric energy before gas. Most models can be plugged into a household outlet (120 V) or a charging station (240 V), but not a fast charging station.
New or used vehicle?
A new model will have the latest technological innovations, more generous government financial incentives (see the full list of incentives below) and the possibility of customizing options and colours. However, delivery times have been disrupted by the shortage of semi-conductors and essential electronic components, and it sometimes takes more than a year for the vehicle to be delivered3.
The used market is a low-cost alternative with no wait times. A new vehicle loses a lot of value in the first few years, so you could buy a used model at a lower price (the electric range will be less than with a new model). Some used all-electric vehicles are eligible for government grants.
How many kilometres do you travel every day?
A greater range often comes with a higher price. It’s cheaper to choose a model that meets your daily needs and frequent trips, even if you have to make a brief stop at a fast charging station when on a long trip. Otherwise you may end up paying for a range you won’t be using. However, add a margin of about 30% for seasonal variations, since cold weather reduces the electric range4.
Calculating total cost of ownership
The total cost of ownership includes not only the vehicle’s purchase price, but also the associated expenses.
Price of all-electric or plug-in hybrid
There is a surcharge when purchasing a fully electric or plug-in hybrid vehicle compared to a similar-sized gas model. However, government incentives could cover part or all of the difference in price.
When you buy or lease an eligible vehicle from a dealership, you benefit from incentives that are immediately applied to the sale price. You may receive:
- Up to $5,000 from the Government of Canada, through the Zero-Emission Vehicles (iZEV) Program;
- Up to $7,000 from the Government of Québec for a new vehicle or up to $3,500 for a used all-electric vehicle, through the Roulez vert program
- Potentially lower rebates for plug-in hybrid vehicles.
Thanks to these tax-free government grants5, the monthly payments for an all-electric or plug-in hybrid vehicle are often similar to those of a gas-powered model from the same class.
A plug-in vehicle is usually delivered with a 120-volt removable charging station that can be plugged in to a standard household outlet and is adequate for short daily trips. Above 100 km per day6, installing a 240-volt charging station at home is preferable to reduce charging time. Expect to pay $700 to $1,300 depending on the type of equipment, and $500 on average to have the installation done by a master electrician7. Some dealerships, manufacturers and municipalities offer financial assistance in this respect. If none is available, you could obtain a $600 refund from the government of Québec.
A public network of charging stations meets needs while on the road, or when a home installation is not possible. Electric Circuit provides 240-volt charging for a fixed rate at each charge ($2.50 in Quebec, $4 in Ontario) or an hourly rate while the vehicle is plugged in ($1/hour in Quebec, $2/hour in Ontario8)), depending on the equipment. The rate for fast charging stations varies according to the power provided, ranging from $7.31/hour for 24 kW to $35.79/hour9 for models of 90 kW and more, as long as the vehicle remains plugged in (usually not more than for 20 to 60 minutes).
Elsewhere in Canada, the FLO network is one of the largest in North America. Tesla also manages its own network of Superchargers (exclusive to the manufacturer’s vehicles) on both sides of the border. Lastly, some stores provide their own private charging station to customers. In late December 2020, Desjardins installed 268 charging stations, including 225 for public use across Quebec and eastern Ontario.
To find your way around all these options, PlugShare lists all kinds of available charging stations around the world on its website and indicates the specific features for each one.
According to the guide Choose a plug-in vehicle that meets your needs, the energy costs of an all-electric vehicle are generally at least 75% lower than those of a gas-powered vehicle, and even more when the price at the pump is high. For instance:
|Electric vehicle||Gas-powered vehicle|
|Consumption||20 kWh/100 km||9,5 L/100 km|
|Cost to drive 1,000 km||$20||$166.25|
For a plug-in hybrid vehicle, the result depends on the proportion of kilometres driven in electric mode and the reduced fuel consumption, which is why it’s important to choose a vehicle suited to your type of driving and needs.
A study by Consumer Reports published in September 2020 revealed that owners of all-electric and plug-in hybrid vehicles pay 50% less on average in basic maintenance10. All-electric vehicles use a simpler mechanical system and do not have many of the traditional parts that require regular maintenance. No oil changes are required, and plug-in hybrid vehicles generally require fewer oil changes.
What you should know about auto insurance
The purchase price of a new electric vehicle is higher than that of an equivalent gas-powered model, in particular because it uses more advanced components, technology and materials. Specially trained mechanics are often required when replacing most parts, which are sometimes hard to find. These additional expenses could result in a higher insurance premium. With the growing popularity of electric vehicles, these costs may decrease over time. In the meantime, some insurers offer a percentage discount to drivers of plug-in hybrid or all-electric vehicles as an incentive to reduce the carbon footprint.
Electric, plug-in hybrid, gas-powered… Which one is the cheapest?
During the car lease or loan, the total monthly cost of a plug-in hybrid vehicle would be 10% less on average than that of a gas-powered model (20% for an all-electric vehicle)11. Once the car has been paid off, the energy and maintenance costs are about 75% less for an all-electric vehicle (37% for a plug-in hybrid) than for a comparable gas-powered vehicle12. So the longer you drive electric and keep your vehicle, the greater the return on your initial investment.