Electric vehicle (EV) owners are generally thought to be a frugal bunch..But a new JD Powers study suggests owners of the cheapest compact SUV EV models actually pay about US$9,529 — or 18% — more than their internal combustion counterparts over five years for otherwise similarly equipped and priced cars even after factoring in lower electricity prices..In fact, the Ford Mustang Mach-E, which JD considers to be a mass-market model, costs more than $16,000 in extra owner costs over the same time period than a comparable gas-powered crossover..Which means, on a relative basis, the Mach-E is nearly $3,000 more expensive than the ultra-premium Mercedes EQB, which itself is only $287 more than a comparable combustion vehicle in the same segment — although it costs more in terms of absolute dollars..The EQB happens to be the cheapest of the ‘premium’ EV models, while the Mustang is the most expensive in the mass market category..“Automobile affordability is not linear,” reads the opening summary. “While a Bentley Bentayga may feel like a bargain at $200,000+ when cross-shopped with a $350,000 Rolls Royce Cullinan, the average Toyota Camry shopper might not be so quick to call either one of them affordable.”.That same logic holds true for EVs. .Although many EV forecasts and analyses of relative affordability tended to lump all EVs into the same bucket when there were not that many models to compare, the rapidly growing markets for luxury and mass market EVs are shaping up to be incredibly different places with distinct consumer profiles, JD notes. .As those markets continue to grow, some stark differences are starting to emerge when it comes to relative affordability. .Surprisingly — or not — the report says that dynamic is playing out in favour of the premium brand buyer where the affordability gap between EVs and comparable internal combustion vehicles is negligible. .“In the mass market segment, however, EVs come with a hefty premium over their ICE counterparts,” it said..It all amounts to a hidden ‘EV tax’ on the mainstream buyer..According to JD, mass market EVs are priced on average around $16,000 more than comparable ICE vehicles before incentives. .Leasing costs distort the traditional luxury/mass market relationship even further. Looking at the average total cost of ownership on a three-year lease for the ‘Benz EQB vs. the Mach-E in July, the EQB ends up being $2,899 cheaper overall than the Mustang Mach-E. .“Digging deeper into specific model-level comparisons, the gap between mass market and premium EV affordability becomes even more detached from conventional wisdom,” it said..Which begs the question: Are mass market buyers being priced out of EVs?.It comes as EV sales still make up less than 8% of the overall car market. And more the three quarters, or 75% are defined as ‘ultra premium’. .JD concludes carmakers will have to address the “affordability gap” if EVs are ever to gain mass market penetration needed to fully displace gas vehicles by 2035.
