Lower Operating Cost of Electric Vehicles a Secular Headwind for Some Companies
Published date July 22, 2021
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While much has been written about electric vehicles (EVs), one topic which has not received as much attention is the fact that, on average, EV repair and maintenance costs are about half those of gas-powered vehicles over the life of a vehicle.
While consumers are attracted to EVs given their lower operating costs (fuel and maintenance) relative to traditional autos, the all-in cost of electric vehicle ownership falls near the midpoint of average ownership costs for all vehicle types currently. In fact, plug-in hybrids offer significantly better value.
With U.S. EV market share expected to grow from only 3.4% of total light new vehicle sales this year to 29.5% in 2030, we think the rise of EVs could have profound long-term financial implications on large segments of the auto industry, such as aftermarket retailers, parts and equipment manufacturers, gas stations, as well as repair and service shops.