Electric cars are currently luxury goods :-(

Unusual circumstances led me to buy three cars in the past 12 months. I've been interested in buying an electric vehicle (EV), so in each case, I figured it was my chance to take the plunge. Alas, I ended up with three ICE (internal combustion engine) vehicles. The types of cars I wanted either didn't exist as EVs or they cost so much more than their ICE equivalents, I couldn't justify the extra expense.
 

This was a great disappointment to me. I understood that EVs would involve some sacrifices in cost, range, and amenities, but EVs are an established and growing market with models from over a half dozen serious manufacturers. I expected the EV-ICE gap to be reasonably small. I found that it's not.

Let's run through the details.

Car 1: The Compact SUV

Last year, my wife and I decided to replace our 2010 Subaru Forester with a new compact SUV. Compact SUVs are part of the largest segment of the US automobile market, compact crossovers. In 2019, more than forty models competed for market share. If you wanted an EV, however, you had only one option: the Jaguar I-Pace.

There may have been hybrids to choose from. I don't know. I rule those out on principle. I think it's silly to build a car with two means of generating power. So much more to maintain. So much more to break down. A hybrid's not an EV. It's an ICE car with an electric subsystem desperately chanting, "I think I can!" I'm not on board.

So...the Jaguar I-Pace. MSRP starts at about $70,000. In my state, government incentives knock $10,000 off that, but even if you could knuckle a dealer down another 15%, you'd still be looking at an entry point of some $51,000. Perhaps that's not unreasonable for a luxury SUV, but we weren't looking for a luxury car. We were looking for a car.

We ultimately bought a Nissan Rogue. It satisfied our two primary requirements (all-wheel drive (AWD) and a moonroof), and during our search, it looked likely that we could get it within our informal budget of $30,000. In the end, we paid less than $28,000.

The Rogue runs on gas. Upgrading from gas to electrons would have cost at least $23,000.

EV fans point out that EVs have lower maintenance and fuel costs, but those factors don't come close to covering a $23,000 up-front difference. Some claim that EVs tend to hold their value better than ICEs, but (1) nobody knows what resale values for today's EVs will be in the future and (2) my wife and I tend to keep our cars at least a decade. Actual purchase price means much more to us than theoretical resale value.

Earlier this year, another EV entered the compact SUV arena: Tesla's Model Y. From a financial perspective, the Model Y is the I-Pace all over again. The AWD Model Y starts at about $52,000 after taxes, fees, and government incentives. That's $24,000 beyond what we paid for the Rogue. Had the Model Y been available when we were shopping, we'd still have ended up with the Rogue.

Whether I-Pace or Model Y, moving from a gas-based powertrain to a battery-based one would have cost tens of thousands of dollars--a price premium of over 80%.

I thought a lot about how much of a premium I was willing to pay to shift from gas to electricity. I finally decided it was about 25%. I want to buy an EV, but I don't want to go broke doing it. Given that the Rogue ran around $28,000, that means my budget for a comparable EV would have been about $35,000. Both the I-Pace and the Model Y (had it been available) would have been at least $17,000 over budget. That's a lot of money. And neither car offered a moonroof.

Car 2: The Little Convertible

After nearly 30 years of listening to me whine about having a convertible, my wife told me to shut up and buy one. Talk had always been of a Miata, but when opportunity knocked, I looked forward to investigating my electric options. There weren't any. Smart's Fortwo convertible had been discontinued in North America a few months before I went shopping, and its laughable 57 mile range ruled it out, anyway.

In desperation, I looked into used Tesla roadsters. That car is more targa than convertible, but I figured I might be able to live with that. In 2019, Tesla roadsters were at least seven years old and started around 50 grand. New Miatas were easily had for well under 30. 'Nuff said.

Car 3: The Used Subcompact Hatchback

My wife recently decided we needed a little hatchback runabout. The car would get only occasional use, and never for long trips. Its range when fully fueled needed to be only 130 miles. "A perfect case for a used subcompact EV like a Leaf!" I thought. With a ceiling of 50,000 miles on the car and a budget of $10,000, I figured we'd have lots of choices.

We had zero choices. There are plenty of Leafs available, but when you throw in the constraint that the rated range has to be at least 130 miles, everything goes away. Leafs up through 2017 are rated at only 107 miles, and newer used Leafs start north of $17,000. Looking beyond Leafs doesn't help. Fiat 500es can be found for under $10,000, but the range is only 84 miles. Used Chevy Bolts have more than enough range, but they start at $19,000. We found nothing that came close to the range and price we were looking for.

We ultimately ended up with a Chevy Spark. Four years old, 25,000 miles, under $9000. Runs on gas, but range is 315 miles. If there's an EV that approaches those stats, I'd love to know about it.

EVs are currently luxury goods

For people with a luxury brand budget, my 25% premium for an EV may put them in a place where there are choices. For people like me who generally shop mid-trim non-luxury brands and want a comparable EV for no more than about 25% more than an ICE vehicle, those choices are absent.

Even the off-menu $35,000 Tesla Model 3 fails the test. Stripped to its essence, the Model 3 is a compact sedan that happens to be electric. The Toyota Corolla is also a compact sedan, but it runs on gas. MSRP for the bottom-end Corolla is $19,600. At $35,000, the most affordable Model 3 demands a 79% premium over the Corolla. (It also requires that you live with half the range: 220 miles for the Tesla, 435 for the Toyota.) There's a reason why Consumer Reports categorizes the Model 3 as a luxury compact car, while the Corolla  is simply a compact car.

To my dismay, nothing I've read suggests that in the next couple of years, EVs will make the transition from luxury items to mainstream consumer goods.  It's a disheartening conclusion. I'd be delighted to be proven wrong.