
Shikhar Gupta
July 25, 2024
Up until recently, buying an electric car made sense to many people around the world, not just for environmental reasons, but also economic ones.
Now, the removal of EV subsidies and tax breaks in some nations, a lack of reasonably priced models, rising insurance premiums, high repair costs and fears about falling resale values have skewed the financial equation.
That hit to the wallet, combined with ongoing concerns about charging infrastructure, has resulted in a slowdown in the adoption rate of battery-powered cars.

In the US, the lack of affordable models and higher interest rates on borrowed money are the main culprits slowing the adoption of EVs.Photographer: David Paul Morris/Bloomberg
The global growth rate of new battery-electric vehicle sales last year was an estimated 29%, less than half the previous year, according to BloombergNEF. This year, sales growth is forecast to slow further to 21%.
Early adopters were more accommodative of downsides to owning an EV, said Jochen Siebert, managing director at consulting firm JSC Automotive. The market has moved on from those pioneer customers, and most consumers just need a car that “makes sense for their lifestyle.”
So, is swapping your gas-powered car for an EV a sensible financial decision? We explore the pros and cons.
The Price Tag
In the US, the lack of affordable models and higher interest rates on borrowed money are the main culprits slowing the adoption of EVs, according to Steve Man, an analyst at Bloomberg Intelligence.
Only 12 of last year’s 60 battery EV models had a manufacturers’ suggested retail price below $45,000, meaning EV makers are missing out on half of the new-vehicle market in the US.
Tesla Inc.’s Model 3 starts at $38,990 before taxes and fees, while Hyundai Motor Co.’s Ioniq 5 EV has a recommended starting price of $41,800 and Volkswagen AG’s ID.4 starts at $39,735.
Several carmakers plan to launch more affordable EVs — priced between $25,000 and $40,000 — with about 13 expected by 2026, Man said.
Tesla said this week that its plans for a lower-cost vehicle are moving ahead. The Elon Musk-led carmaker said production is expected to start in the first half of next year, though the company has been vague on details and often over-promises with respect to timelines.
In Europe, mass-market manufacturers VW, Stellantis NV and Renault SA are preparing cheaper models costing around €25,000 ($27,000), but those won’t start arriving until next year.
“Whoever misses out this large, addressable market could become irrelevant in the game, having serious implications in their future competitiveness,” Man said.
At the same time, rapid technological advances and Tesla’s price cuts are causing resale values to fall — a source of anxiety for owners.
Clean-Car Subsidies
The scrapping or scaling back of EV subsidies and tax breaks in some countries is a blow for consumers looking to buy.
In the US, people have been able to take advantage of President Joe Biden’s $7,500 consumer tax credit toward EV purchases. However, this incentive may be on borrowed time — former President Donald Trump has vowed to target Biden’s pro-EV policies “on day one” if he returns to the White House.
As for Europe, sales in Germany slid 31% in May from a year earlier, in the latest indication of just how dependent the region’s biggest auto market was on subsidies for battery-electric cars that were pulled late last year.
Even Norway, the EV trailblazer, has seen sales dented by the pulling back of some incentives.
In addition, the European Union plans to impose provisional tariffs on EVs imported from China, which may keep prices elevated. Chinese companies led by BYD Co. and MG maker SAIC Motor Corp. had been gearing up to bring cheaper imports to Europe, but with the new levies, prices are set to remain out of reach for many consumers.
Insurance Premiums
Insurance and repair costs for EVs are expensive, and JSC’s Siebert forecasts they will go even higher given how minor damage can require full battery pack replacements.
In the UK, drivers have to fork out twice as much to insure electric vehicles as they do for gas-powered models. The average insurance premium for EVs jumped to £1,344 ($1,700) at the end of last year, roughly double the cost of cover for traditional cars, according to UK insurance broker Howden Group Holdings.
A lack of trained mechanics for high-expertise EV repairs in the UK has driven up repair costs, and some EVs are being written off entirely despite minimal damage that could otherwise be repaired in vehicles powered by combustion engines.
In Thailand, EV insurance costs are about 20% to 50% higher than for conventional cars, according to Siravit Chayavanich, the head of insurance price comparison platform Priceza Money.
A key reason for high EV repair costs is their high-voltage batteries, which can account for as much as 60% of car values, Chayavanich said.
Haley Lee, a 31-year-old in South Korea who drives an EV for work as part of her government job, said the cost of fixing it following an accident was “very high.”
“We had to replace the entire battery pack and it was much more than fixing a gasoline vehicle,” Lee said. “It made me think that I’d never buy an EV for my personal car. It costs so much to fix and I can’t afford it.”
Frustrations
Although it’s not a direct financial cost, the state of charging networks in many nations — and the time lost waiting in queues to power up — is still a major drawback, according to a recent Harvard University study.
In the US, some chargers don’t report their status, or do so erroneously, the study’s primary researcher Omar Asensio said. Maintenance of public EV chargers, especially those installed by state or municipal governments, is a significant contributing factor, he said.
Many chargers, especially those outside Tesla’s Supercharger network, also require their own mobile apps. Each app requires its own account, which is more tedious than the straightforward experience at gas stations.
This contributed to 37% of respondents in a UK YouGov survey last year stating that they regretted buying an EV, said Thomas Lockhart, the head of marketing at EV charging platform Monta.
A separate YouGov survey in October, also commissioned by Monta, found that 54% of French EV owners regretted their purchases due to rising electricity prices.
Still, recharging EVs remain significantly cheaper than filling up gas-powered cars in France and elsewhere.
© 2025 Bloomberg L.P.