After Tesla successfully produced and sold their Model S electric vehicle in 2012, many other carmakers decided to produce their own electric vehicles in order to stay ahead of their competitors. However, breaking into a new market can be a big risk. If you’re a dealer who’s interested in investing in electric vehicles, you should be aware of the factors and costs that come into play.
What Factors Should Dealers Consider Before Investing in Electric Vehicles?
Before stocking your lot with electric vehicles, there are 3 factors you need to consider.
- Inspections
- Battery life
- Vehicle Value
Inspections
Unlike traditional vehicles, electric vehicles (EVs) have fewer moving parts than gas powered vehicles, which means they require less maintenance. However, EVs require inspections for more specific areas. Key components that need regular inspection include:
- Battery Pack
- Electric Motor
- Power Electronics
- Charging System
- Cooling Systems
- Software and Firmware
- Brakes and Tires
- Cabin Air Filter
Inspection Costs
Here is a breakdown of costs when inspecting an electric vehicle:
- Tire rotation and replacement: Tire rotations cost between $30 and $40, while a replacement can cost $150 to $300 per tire. (This is because there are fewer tire options to choose from than traditional cars.)
- Brake system maintenance: Replacing brake pads and rotors can cost from $100 to $150 or more, depending on the make and model of the car.
- Battery system maintenance: Maintenance typically costs from $50 to $200. If the battery pack needs to be replaced, it can cost from $5,000 to $20,000, depending on the model. However, it’s rarely necessary to replace the entire battery pack.
- Cabin air filter replacement: EVs have cabin air filters that need to be replaced every 12,000 to 15,000 miles (12 to 18 months.) Cabin air filter replacements cost between $40 and $60.
- Electric Motor: EV motors rarely require repairs or replacement. However, if the motor is defective or damaged and needs to be replaced, it can cost between $2,000 - $10,000.
According to EV Connect, you can expect to pay $4,600 less in repair and maintenance costs over the lifetime of the EV than gas powered cars. ($949 less a year)
Battery Life
One of the biggest concerns for EV buyers and sellers is battery longevity. Factors that influence battery life include:
- Usage Patterns
- Maintenance and Software Updates
- Driving Habits
Modern EV batteries are designed to last beyond 100,000 miles. The lifespan of an EV can also last from 15 to 20 years if maintained properly.
Battery Replacement Costs
The cost to replace an EV’s battery can cost between $6,500 to $20,000, depending on the battery pack, size, and manufacturer. However, with a lifespan of 15 to 20 years, you more than likely won’t need to replace it if you follow proper maintenance rules.
Vehicle Value
Although the popularity of electric vehicles has risen in the auto industry, they're not guaranteed money makers. Determining an electric vehicle’s value is based on several factors, such as:
- Battery Health
- Mileage and Usage History
- Technological Features
- Market Demand
A recent study from May 2024 found that while older electric vehicle models depreciate faster than traditional gas powered cars, newer electric vehicle models with longer driving ranges are holding their resale value better and have a higher retention rate.
Market Value Tools
Pricing tools such as Kelley Blue Book and Edmunds, as well as electric vehicle-specific tools like Recurrent and PGE, can provide accurate market comparisons of electric vehicles.
Do I Know What Factors to Consider Before Buying Electric Vehicles?
As the automotive industry continues to evolve, the demand for electric vehicles continues to grow. Knowing what factors to consider before stocking up on EVs will help you decide if they’re worth the investment.
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