6 benefits of buying an electric vehicle

25 August 2021 by National Bank

We’re seeing more and more electric vehicles on the road, and they’re becoming increasingly popular. Maybe you’ve thought about getting one too? But have you asked yourself whether it’s good for your portfolio? Here are the benefits of an electric car and things to consider before getting an all-electric or plug-in hybrid vehicle.

What are the benefits of getting an electric vehicle?

Savings on the cost of charging an electric vehicle

One of the great things about an electric vehicle is that it saves you money. That’s because electricity is usually less expensive than gasoline. According to Natural Resources Canada estimates, it could even be 4 times cheaper per kilometre driven.

What are your potential savings per year? Driving 20,000 km in a compact all-electric car could save you between $1,500 and $1,700, according to BC Hydro and Hydro-Québec.

The amount saved depends on a number of factors, such as the price of gas and electricity, the number of kilometres driven, the car model and the technology used. A plug-in hybrid electric vehicle (PHEV), for example, has two engines and consumes electricity for a portion of the distance travelled and gasoline thereafter. An all-electric vehicle (AEV) consumes only electricity.

To get an idea of the cost per kilometre of different makes and models of cars, Natural Resources Canada offers a fuel consumption ratings search tool.

Savings on the cost of electric vehicle maintenance

Electric vehicles also cost less to maintain than gasoline-powered vehicles. Depending on the type of vehicle (all-electric or plug-in hybrid), there are benefits such as:

  • Fewer or no oil changes;
  • Brakes last longer (because of an energy recovery braking system that reduces the use of disks and brake pads);
  • Electric motors are simpler than gasoline engines and require fewer parts and components (such as coolant, oil filters or timing belts) that wear out and need to be changed.

Government incentives to purchase or lease an electric vehicle

Even though electric vehicles cost less in terms of energy and maintenance, their sale and lease prices are often higher than for gasoline-powered vehicles. The good news is that the federal government offers incentives to individuals and businesses to encourage the switch to electric vehicles.

There are also several provinces that offer their own incentives. They apply to the purchase or lease of eligible vehicles, the replacement of an old vehicle, or even the purchase and installation of a charging station. Since the amounts, programs and eligible vehicles can vary depending on the location and from year to year, it’s worth finding out about them before buying or leasing.

Good to know: The federal government is also offering deductions to businesses that want to switch to electric vehicles.

 Attractive offers on electric vehicle loans and insurance

Several companies also offer incentives to switch to electric vehicles. Some insurers offer discounts on auto insurance for some models. Financial institutions have also introduced attractive loans for the purchase of electric and hybrid vehicles. It’s worth taking a look at them when you assess your car financing options.

Special benefits for electric vehicle drivers

Some provinces, such as Quebec and Ontario, offer green licence plates to eligible drivers of electric or plug-in hybrid vehicles. Depending on the location, they provide access to certain benefits, such as:

  • Being able to drive on reserved lanes;
  • Free or reserved parking spots in a number of locations;
  • Free access to toll roads and ferries.

Benefits of electric cars for the environment

Another benefit on our list is that electric vehicles do not emit greenhouse gases. According to Hydro-Québec, if you take into account the entire life cycle of a car (including the materials used to build it), an electric vehicle’s greenhouse gas emissions will be 65% less than those of a gas-powered vehicle for every 150,000 km driven. The longer the distance travelled, the greater the environmental benefit of electricity: after 300,000 km, greenhouse gas emissions are 80% less.

It also depends on how electricity is produced in your province or territory. Electricity generated by a nuclear or hydroelectric power plant does not have the same environmental effects as a coal-fired power plant.

Another benefit of electricity is that it reduces noise pollution caused by combustion engines.

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What else should I consider before purchasing an electric vehicle?

Because electric vehicles are not yet the norm, there are things that are not well-known about them and questions that we’re not used to asking ourselves. Before purchasing this type of car, here are some things to consider:

  • Price: The purchase price of electric vehicles is often higher than that of conventional combustion engine vehicles, but they cost less for maintenance and fuel. There are also grants and incentives. So you have to weigh the pros and cons when drawing up your budget.
  • Charging stations: Depending on the electric vehicle model, an accessible terminal or electrical outlet is required to recharge it. Are any available along the routes you usually take? Will you need to install one at home?

The federal government has an interactive map of vehicle charging stations across the country. As for buying and installing a charging station at home, several provinces have specific grants.

  • Vehicle range: The range of electric vehicles is increasing, but you still have to recharge them eventually. Will the model you’re looking for allow you to make the trips you have to make without having to stop to recharge it?
  • Battery life and pollution: Batteries are getting better, but they don’t last forever. They can also become less efficient over time. So, it’s worth asking when you will have to replace it and how much it’s going to cost. In many cases, there’s still no optimal solution for battery recycling.
  • Availability of used electric vehicles: Because many electric vehicles sell quickly, it can take longer to get one than it takes for a conventional vehicle. So, you often have to be patient before an electric vehicle becomes available. Their popularity also means that there’s not much for sale in the second-hand market, such as vehicles sold by individuals.
  • Banning of gasoline vehicles: The federal government has announced that as early as 2035, light-weight gasoline-powered passenger vehicles will be banned. Sooner or later, you will have to switch to an electric vehicle.

Opting for an electric vehicle can be beneficial for your finances and the environment. It’s also worthwhile to assess your needs and find out what’s involved before taking action. To assess what this means for your budget, feel free to make an appointment with a financial expert. We're here to answer your questions.

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