Considering an Electric Vehicle

By Barry H. Kaplan, EA, CFP®

Wealth Manager, Principal

October 5, 2020

Various futurists predict that electric car sales will exceed that of internal combustion cars. It’s coming, but when? China and Norway will go all electric by 2025. Almost 60% of new cars sold in Norway are Electric Vehicles (EVs). Entire countries, including the Netherlands, France, Germany, the UK and India, are seriously considering banning the sale of all internal combustion engines. All Volvo models are either hybrids or powered solely by electric. Volkswagen lied about its diesels being clean and has announced a switch to electric; they are spending $84 BILLION dollars on developing electric cars and batteries.

My wife has driven electric cars for almost 10 years, and I have driven a plug-in hybrid for 3. As the spouse of a pioneer (my wife had one of the first 50 Nissan Leafs in Georgia), you should know that there is much more to think about than fuel savings. Let me share some key points for those exploring the purchase of an EV.

My colleague Peter McKenna, CFP®, MBA and I put together the below list.  This list is by no means comprehensive, but just a few things worth thinking about as you begin your research:

Federal and State Tax credits can help defray costs, $7,5001 (plus $5,0002 from Connecticut) off a $30k Hyundai or Mini Cooper is significant but $0 credit for the soon to be released $140k Tesla S Plaid does not help.

The tax credits start to phase out once a manufacturer sells over 200,000 EVs. Tesla and GM have sold so many units that their buyers no longer qualify for the federal tax credit3.

Some states offer tax incentives (Connecticut offers $5,000, while MA4 and NY rebate $2,0005). NJ waives sales tax on purchase of a new EV6.

In certain states, certain less expensive EVs could be cost effective, but the math does not always work out.

You may want to install a home charger (note there is a small federal credit for installing a charger).

Some manufacturers EVs technology is not yet proven, and cars may depreciate quickly. We leased our first-generation Nissan Leaf for this reason and didn’t regret it as its battery deteriorated with use and its value cratered. We own both my Plug-in Hybrid BMW X540e and my wife’s Tesla S 100d.

Range limitations of most EVs mean that a second, conventional vehicle often makes sense to own. My wife always prefers to drive my Plug-in Hybrid to the beach over her Tesla, but I think part of it is that she prefers getting sand and salt on my car rather than hers.

Actual range achieved suffers in stop-and-go traffic or near freezing temperatures.

Auto insurance could be more expensive, but maintenance costs are minimal, less than half of a gas-powered car. In 10 years, all we have paid for is tires, alignments, and windshield wipers.

Some utilities offer lower electric rates for EV charging late at night.

Some states allow EVs to use HOV and other “exclusive” lanes which may reduce tolls, time stuck in traffic, etc. Jacob Burleson in the Georgia office has a long commute which he cut significantly with his use of HOV lanes.

My wife started out with a cheap EV (first generation Nissan Leaf) to save the environment and it was dirt cheap to maintain. But now she is in a Tesla S because it is a performance car. I’d put it up against any production car on a test track, but this is a daily driver.

EVs are the future but battery costs need to continue to decrease before we see an EV in every garage. Purchasing an EV can be exciting but with it comes many questions and warrants an in-depth conversation and research before taking the leap.

Modera Wealth Management, LLC (“Modera”) is an SEC registered investment adviser. SEC registration does not imply any level of skill or training. Modera may only transact business in those states in which it is notice filed or qualifies for an exemption or exclusion from notice filing requirements. For information pertaining to Modera’s registration status, its fees and services please contact Modera or refer to the Investment Adviser Public Disclosure Web site ( for a copy of our Disclosure Brochure which appears as Part 2A of Form ADV. Please read the Disclosure Brochure carefully before you invest or send money.

This article is limited to the dissemination of general information about Modera’s investment advisory and financial planning services that is not suitable for everyone. Nothing herein should be interpreted or construed as investment advice nor as legal, tax or accounting advice nor as personalized financial planning, tax planning or wealth management advice. For legal, tax and accounting-related matters, we recommend you seek the advice of a qualified attorney or accountant. This article is not a substitute for personalized investment or financial planning from Modera. There is no guarantee that the views and opinions expressed herein will come to pass, and the information herein should not be considered a solicitation to engage in a particular investment or financial planning strategy. The statements and opinions expressed in this article are subject to change without notice based on changes in the law and other conditions.

Investing in the markets involves gains and losses and may not be suitable for all investors. Information herein is subject to change without notice and should not be considered a solicitation to buy or sell any security or to engage in a particular investment or financial planning strategy. Individual client asset allocations and investment strategies differ based on varying degrees of diversification and other factors. Diversification does not guarantee a profit or guarantee against a loss.

Certified Financial Planner Board of Standards, Inc. (CFP Board) owns the certification marks CFP®, CERTIFIED FINANCIAL PLANNER™, and CFP® (with plaque design) in the United States, which it authorizes use of by individuals who successfully complete CFP Board’s initial and ongoing certification requirements.