Two Cents

(soft playful music) (gasoline sloshing) - Julia, what are you doing?

- Pouring gasoline down the drain.

We won't need it anymore since the age of the electric vehicle has finally arrived!

- I really don't think you should do that.

It's not only dangerous but very illegal.

- (scoffs) Philip, you're forgetting that we live in a cartoon house.

What's the worst that could happen?

We turn some sewer reptiles into crime fighting mutants?

(chuckles) - I admit that sounds cool, but are you sure that gas-powered cars are really going the way of the dodo?

I've heard a lot of conflicting things recently.

Some people are saying the EV hype is overblown.

- Well, we can't keep pouring CO2 into the atmosphere.

That would be a crime!

(record scratches) (door knob clicks) - Whoa.

Did someone say crime?

(graphic whooshes) (gentle cheerful music) (pen scratches) (coins clinking) (coins whooshing) (scroll rustles) (coins rumble) (scroll whooshes) - Transportation accounts for about 35% of America's CO2 emissions, which is why the Biden administration has made the transition to electric vehicles or EVs a policy priority.

Past proposals to curb emissions through penalties like a carbon tax have proved to be pretty unpopular.

So this time, the strategy is centered on subsidies, free money the government gives to citizens for buying electric cars.

In theory, this will benefit consumers, the industry, and the environment.

- And by and large, it seems to be working.

Between 2022 and 2023, demand for electric vehicles shot up from 4.3 to 7% of new car sales.

This is despite the fact that a semiconductor shortage and overall inflation pushed the average price of an EV on par with the median American salary.

- Manufacturers have responded to this burst of interest by accelerating the production of new lines.

In 2020, there were only six models of fully electric cars on the market.

By the end of 2024, analysts estimate there may be over 70, but some experts worry that they've overestimated the public's enthusiasm.

Over the last few months of 2023, demand for EVs tapered off, with new estimates putting the overall market share at about 10% by the end of 2024.

The CEO of Toyota recently predicted that EVs will never achieve more than 30% of new vehicle sales.

- [Julia] If you've been in the market for a new car in the last couple of years, you've probably at least considered an electric vehicle.

- [Philip] But tracking all the pros and cons can seem daunting, and it seems like there are new technological and policy announcements every week.

- Which EV is right for you or whether you should buy one at all is highly dependent on where you live, what you do, and what you value.

But you can't make the right choice unless you look at the pros and cons with a cool rational head.

- First, the price.

While it is true that EVs are historically expensive, that is changing.

The surplus of EVs coupled with the cooling of demand means that manufacturers are slashing their prices.

The average price of a new electric vehicle fell 18% over 2023 and is now almost the same as the average gas-powered vehicle.

- And let's not forget about the subsidies.

Thanks to the Inflation Reduction Act, the federal government will give you a $7,500 rebate on the price of a qualifying EV.

In the past, such rebates were reimbursed at tax time, but now dealers can take it right off the sticker price when you purchase the car.

Your state government may also offer an EV rebate, and guess what?

They're stackable.

For instance, if you live in Colorado, you could get upwards of $8,000 in extra discounts depending on the vehicle and another 6,000 if you trade in your old gas-guzzler.

So if you've always assumed that electric cars are out of your price range, you should know that it's very possible you could take one home for less than 20 grand.

- But there are some caveats.

The Inflation Reduction Act tried to strike a balance between doing what's good for the environment and what's good for American manufacturing.

So in order for a vehicle to qualify, it must be assembled and have a certain percentage of its material sourced in the United States.

That puts several popular models like the Tesla Model 3 off the list, for now at least.

Manufacturers are scrambling to update their production lines, so consult up-to-date sources when shopping.

- Furthermore, these rebates aren't available to people who don't financially need them.

If you make more than 150 grand a year or 300 grand as a couple, you'll have to pay full price for that new Tesla.

High price luxury models are also excluded, presumably under the theory that these rebates are supposed to be for ordinary people.

The cap is an MSRP of $55,000 for cars and $80,000 for trucks and SUVs.

- There's one more cost to consider, charging the battery.

Most EVs will do the majority of their charging at home in a garage or on the driveway, while some earlier models allow you to use an ordinary extension cord.

Taking advantage of the faster charging batteries requires installing a 240-volt outlet, which can cost between 1000 and $2,000 for parts and labor.

Plus, expect the charging of your EV to add an extra 30 to $60 to your electric bill.

Considering the average American spends between 150 and $200 a month on gas, that's not a bad bargain.

This is of course, assuming you're a homeowner.

If you're a renter, you may need to find a complex that offers charging stations, which many do, or petition your landlord to install one.

- Speaking of charging, the practicality of EVs is perhaps most people's biggest concern after price.

We've all heard horror stories of drivers being stranded with a dead battery, hundreds of miles from the nearest outlet.

And to be fair, it is a bit more complicated than filling up a tank of gas.

There are several different types of batteries, ports, and charging stations and they don't all work together.

Some batteries take hours to charge while others are done in less than 30 minutes.

- Generally speaking, if you live and work in a city, you should have no problem charging your EV at your home or job.

But if you live in a more rural area or are planning a road trip, you may need to plan your stops more carefully.

Thankfully, there's a lot being done to make charging more convenient.

The manufacturers are moving towards universal ports with adapters that will allow older models to charge at more locations.

And the Biden administration recently approved over $600 million to expand the network of charging stations through suburban and rural areas.

- While there is definitely a learning curve to owning an electric car, it's important not to get too carried away by scary stories on the internet.

While it's true that EV batteries are less efficient in frigid temperatures, gas-powered vehicles are also known to break down in the cold.

Because they have fewer moving parts, EVs are often more reliable and cheaper to maintain.

So the next time you hear a story about an EV driver stranded with a dead battery, remember, people run out of gas all the time and no one writes articles about it.

- If you're a car aficionado, you may be concerned about performance.

There's a long-running bias about electric cars being slow or weak, but it's very outdated.

Just like gas-powered engines, you can get powerful high-performance electric motors for a premium price.

While top speeds in some EVs are capped to conserve battery life, most are more than capable of going over a hundred miles an hour.

Where EVs really shine though is in acceleration.

Unlike gas engines, electric motors deploy full torque as soon as you touch the gas pedal, or is that electric pedal?

Which means most EVs can go from 0 to 60 faster than their gas-powered equivalents.

- There is one more legitimate concern that may be giving potential buyers a pause.

The pace of technological advancement.

No one wants to spend a lot of money for something that will be obsolete in a year or two, and EV technology is continuously improving.

In January of 2024, scientists at Harvard University developed a new solid state battery that could potentially be recharged in the time it takes to fill a gas tank and last for decades.

Innovations like these may keep some people waiting for the perfect EV to come along, but as with phones, TVs, and computers, if you don't pull the trigger at some point, you could theoretically be waiting forever.

- If that's what's holding you back, you might want to consider leasing an EV.

I know, I know.

We just made a video about how leasing a car is almost always a bad idea, but in the case of EVs, it makes slightly more sense.

Not only can you upgrade to new tech, (wipers buzzing) but since leasing is considered a commercial transaction, a lot of government subsidy restrictions don't apply, which means you can get the full rebate on a wider selection of models.

- So far, we've just been addressing self-interested reasons for buying an EV, but obviously the whole point of this transition is to minimize the environmental impact of transportation.

So how green are electric cars really?

On average, their well-to-wheel emission rate is almost half that of gas-powered cars.

However, it depends on where you live.

In states that are heavily dependent on coal, generating the electricity that charges your battery can create almost as much emission as burning a tank of gas.

- Regardless of how dirty the energy is, electric cars tend to make the most of it.

It's estimated that around 70% of the energy released by burning a tank of gas is lost to inefficiencies.

But electric vehicles use upwards of 65% of their energy to turn the wheels.

That means that even in coal-heavy West Virginia, an EV will do far less damage to the environment.

- [Julia] For decades, electric cars have struggled to gain purchase with American consumers, held back by high prices and technological shortcomings.

- But most experts now agree that recent advancements have allowed them to catch up and even surpass their gas-powered ancestors.

Coupled with a strong investment by the federal government, the time for ordinary people to enter the EV market may finally be here.

- And not a moment too soon.

With climate change disruptions occurring ever more frequently, EVs offer a way for individuals to limit their impact on the environment while enjoying a more reliable, cost-effective way to get around.