Electric vs. Gas Cars: Is It Cheaper to Drive an EV?

According to data from Cox Automotive (parent company of Kelley Blue Book), the average price paid for a new EV continues to fall—in September 2023, it came down by $14,300 over the prior year. This amounted to a cost of just $2,800 more than the average paid for a new gas-powered vehicle. And with the EV market growing rapidly, the price margin is expected to shrink even more in the coming years as manufacturers produce more affordable models and improve battery technology, the most expensive part of an EV.  

You can mitigate some of that cost by making use of state incentives, which can shave thousands off an EV’s price tag. And federal tax credits—recently scrapped by Congress, despite their popularity—remain available through September 2025. (Those credits include up to $7,500 for a new EV and $4,00 for a used one, with some limitations.) Additionally, many states continue to offer their own tax incentives, so take the time to search for what’s available for the model you’re interested in buying.  

Once you have an idea of what incentives you qualify for, you should be able to better compare car prices.  

Here’s where EV owners win out. Going electric means you get to skip pricey trips to the pump, which is one of the biggest draws for making the switch. A 2018 study by the University of Michigan’s Transportation Research Institute found that the average cost to fuel an electric car was $485 a year, compared to $1,117 for a gas-powered vehicle. A 2020 Consumer Reports study similarly showed that EV drivers tend to spend about 60 percent less each year on fuel costs compared to drivers of gas-powered cars. 

And in 2023, the nonpartisan policy firm Energy Innovation released a report showing that these savings benefit drivers across the United States: Every EV model in every state is cheaper to fill than a gas-powered vehicle. These savings are largely based on the fact that current EVs are 2.6 to 4.8 times more efficient at traveling a mile compared to a gasoline internal combustion engine, according to real-world data collected by the U.S. Department of Energy (DOE). 

And importantly, electricity prices are more stable and predictable than gasoline prices. For the latter, we see routine price swings, which are heavily influenced by global oil markets, geopolitical conflict, extreme weather events, and supply chain disruptions. In contrast, electricity is typically regulated at the state or local level, with pricing subject to long-term planning and utility rate oversight. Many utilities also offer time-of-use rates, allowing EV drivers to charge during low-cost, off-peak hours—giving you even more control over refueling costs.  

Your actual savings will depend on a few key factors, including how efficient your EV is, how you charge it, and where you live. Here’s why. 

To estimate your own charging costs, multiply an EV’s kilowatt-hour (kWh/100) mileage rate by your electricity rate (measured in cents per kWh and typically found on your monthly utility bill). This gives your cost per 100 miles driven. Multiply that by how much you drive per month to estimate the increase in your electricity bill. After figuring in the number of miles you typically drive in a month, you’ll be able to see how much your electric bill may go up.  

Keep in mind that public charging stations—especially at high-speed DC fast chargers—tend to be more expensive than charging at home. If you rely exclusively on public infrastructure, your fuel savings may shrink to some extent.  

Once you’ve accounted for your preferred EV model, where you charge, and how much you drive, compare your estimated charging costs to your current gas spending. For many drivers, the case for going electric will win out. 

Without spark plugs to replace or oil to change, electric vehicles have a clear leg up on maintenance costs. EVs also have the unique feature of “regenerative” braking—recovering the energy normally lost to braking—which saves on brake pad replacements. Electric cars do still require some basic maintenance, of course, like service checks and tire rotations. But in general, on a per-mile basis, EV maintenance and repair costs run about 40 percent lower than comparable gas vehicles.

Now, to calculate that all-important number: whether an electric car will be cheaper over the life of the vehicle.  

You can figure out your savings estimate by adding together the up-front costs of your specific model (minus tax rebates) and then ongoing costs. You’ll need to account for your model’s efficiency, how much you plan to drive, regional electricity costs, charging habits, and maintenance costs per year. Then compare those to the gas-powered alternative.  

Note that the average amount of time that a driver keeps a new vehicle is seven years; this is the metric that the authors of a 2025 study from Atlas Public Policy, conducted on behalf of NRDC, used when investigating how expenses would stack up for owners of gas cars versus EVs. Weighing the total cost of ownership for five of the most popular internal combustion models across different vehicle classes—a compact sedan up to a pickup truck—and comparing each to a similarly sized electric version of the same type, the study found that owning an EV is cheaper in four of five categories. (The pickup was the single exception.)  

The loss of federal tax credits, however, will impact these savings, as the study’s authors note—though their calculations find that two of the five electric models (Chevrolet Equinox EV and Tesla Model Y) continue to offer higher savings than their gasoline counterparts. 

Another popular model to consider when shopping for a green and budget-friendly car is a plug-in hybrid. These vehicles operate partly on gasoline and partly on electricity from the grid. A plug-in hybrid with an all-electric range of 50 miles could enable you to drive mainly on electricity.  

Bottom line: You can bank on saving across the life of your EV. That’s not too shabby, considering you’ll also be sparing the climate thousands of pounds of carbon pollution over the car’s lifetime, along with other pollutants that create smog, lower local air quality, and cause harm to public health. And of course, carbon pollution carries a price tag of its own. When we take measures to rein in emissions, there are concrete savings that go well beyond our own pocketbooks too. 

This story was originally published on March 21, 2024, and has been updated with new information and links.