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What to Know About Owning an Electric Vehicle in California

    4 minute read

    It’s no secret that electric cars have become increasingly popular in the Golden State over the past few years. In 2021, California had the greatest number of electric vehicles (EVs) in the country, comprising 39% of all EVs nationwide. There are plenty of reasons for the growing popularity of EVs, including lower emissions, fuel costs, and state incentives. Still, the actual cost of an electric vehicle goes well beyond its sticker price. So, let’s take a closer look at the various costs you should know before purchasing an EV.

    How Much Does an Electric Vehicle Cost? 

    a person ready to purchase an electric vehicle

    Although electric vehicles have become more affordable since their mainstream introduction, most brand-new EVs are still more expensive than their gas counterparts. However, as the industry advances, we can expect to see the gap close between the two. Recently, Tesla, Chevrolet, Hyundai, and Nissan have all lowered prices on their entry-level EV models. So, what’s the cheapest EV on the market in 2023?

    Starting at $26,500, the Chevrolet Bolt EV is currently the most affordable EV on the market, followed by the Nissan Leaf, which starts at $28,040. For comparison, one of the most expensive EVs on the market is the Audi RS e-tron GT, which starts at a whopping $143,900. Why the significant difference? Aside from brand recognition, higher-end EVs are likely fully equipped with the latest technology and high-performance stats, such as going from 0 to 60 mph in under 3 seconds.

    What Are the Incentives of Owning an Electric Vehicle?

    Owning an EV comes with additional benefits besides skipping the gas line. In fact, you can earn up to $7,500 in federal tax credits just for purchasing your new electric ride. Plus, depending on your model, you may be eligible to receive tax incentives even if your EV is used. However, remember that these aren’t rebates, so you won’t receive a check in the mail. Instead, any credit you receive will apply to your annual tax burden.

    In addition to federal tax credits, many states also offer cash incentives for purchasing an EV. California, for example, has the Clean Vehicle Rebate Project (CVRP), which promotes EV purchases by offering rebates of $1,000 to $7,500 for those eligible. Eligibility depends on gross annual income, with income caps of $135,000 for single filers and $200,000 for joint filers. Furthermore, there may be additional local rebate options to apply for depending on where you live.

    To see a complete list of the California incentives available, visit California’s Drive Clean website.

    How Much Does It Cost to Charge an Electric Vehicle?

    a mother and her child charging their electric vehicle in California

    Ditching the gas station is one of the biggest draws of owning an EV. On average, recharging an electric car will cost significantly less than filling up a gas tank. However, the cost to charge your vehicle will greatly depend on its battery size and the price of electricity where you live.

    According to the Energy Information Administration, the average cost of electricity in California is around 19.65¢ per kilowatt hour (kWh). At this price point, fully charging a Chevrolet Bolt (65 kWh battery with a 259-mile range) costs $12.77, or 4.93¢ per mile. For comparison, it’d cost you $49.12 to go a similar distance in a 25-mpg gas-powered car at a gas price of $4.74 per gallon (the average gas price in California at the time of writing).

    There are three different charging options you may encounter when charging your EV: level 1, level 2, and DC fast charging:

    • Level 1: Slowest charging rate that provides around 5 miles per hour of charge. Level 1 charging stations can plug directly into a standard household outlet without requiring special installations or rewiring.
    • Level 2: Medium charging rate that provides around 25 miles per hour of charge. Level 2 charging stations require a 240-volt outlet that you may need to install professionally on a dedicated circuit. Average costs range from $500-700, excluding installation costs. Some publicly available charging stations are also Level 2.
    • DC fast charging: The fastest charging option available, providing up to 250 miles per charging hour. DC fast charging requires a 480-volt connection and utilizes DC power, so you can’t install these at home. These chargers are typically found in public locations like rest stops or parking lots.

    Is It More Expensive to Insure an Electric Vehicle?

    an electric vehicle that is plugged in at sunset

    Purchasing insurance for an electric vehicle is generally the same as buying insurance for a gas-powered car. However, you can expect to see a difference in cost.

    On average, it will cost you more to insure an electric vehicle than its gas counterpart. Although EVs may have significantly fewer moving parts, the parts they do have can be pricey to repair or replace. Plus, working on EVs requires additional training that not all repair shops may be familiar with, resulting in higher labor costs. These factors can lead to a high payout for insurance companies in the event of a claim, meaning higher rates for EV policyholders. Still, it’s important to remember you’ll be eligible for typical insurance discounts, such as being a good driver, bundling policies, and being claim free.

    Speak With an Insurance Specialist

    Are you thinking about purchasing an electric vehicle in California? If so, we recommend speaking with an insurance agent before switching to understand how your insurance rate may change. Although your premium may increase, the gas savings and other benefits may well be worth it.

    If you’d like to review your options and compare quotes from a network of insurance providers, AIS can help. Our insurance specialists know the right questions to ask to find you the best rate available. So give us a call at (888) 772-4247, or start a free quote online today.


    The information in this article is obtained from various sources and offered for educational purposes only. Furthermore, it should not replace the advice of a qualified professional. The definitions, terms, and coverage in a given policy may be different than those suggested here. No warranty or appropriateness for a specific purpose is expressed or implied.