There’s no doubt that the future of driving is electric. In fact, Morgan Stanley predicts that 72% of all car sales will be electric by the year 2040. Almost every major automaker has already invested billions of dollars into expanding their electric vehicle lineups. Within 20 years, it will probably be next to impossible to actually buy a brand new car that still runs on plain ol’ gasoline. Until that day comes, though, the debate between electric car vs gas costs rages on: which one will save you the most money overall?
As we dug into answering the question, we quickly discovered that it wasn’t easy. Most EVs still have higher-than-average starting prices, discouraging plenty of cost-conscious buyers. Then again, regular gas-powered cars don’t come with any tax credits. And then there are factors like auto insurance, general maintenance, and resale value to consider. Oh, and of course we had to weigh the costs of filling up the tank at the gas pump versus charging your EV — either at home or at public charging stations. Here’s how everything breaks down.
Early adopters always pay the price. Although electric vehicles have already existed for more than a decade, they remain a niche product. Like any other emerging technology, they certainly aren’t cheap. The average price for a brand new EV is roughly $55,000. That’s considerably higher than the average four-door sedan, which runs about $35,000, according to Kelly Blue Book.
While you can start recouping that extra money with things like tax credits and gas savings, it’s going to take a few years to make up a potential $20,000 difference. Although EVs continue to get cheaper every year, on average, they still demand a larger financial commitment than gas-powered cars. If you have to buy a car out of state, for whatever reason, your costs could go up even higher.
That being said, that $55,000 average price is driven up by some of the higher-end EVs, like the Tesla Model S or Porsche Taycan. In fact, Tesla currently owns 79% of the EV market share! No wonder the average price is so high. However, it’s already possible to buy a Nissan Leaf, Kia Soul, or Chevy Bolt for less than $35,000.
We can start with the easy part. There are no tax credits or other financial incentives available for buying a gas-powered car. You might be able to talk the dealership into throwing in a $100 gas gift card or some free oil changes, but that’s about it.
On the other hand, almost every jurisdiction offers some sort of tax credit for buying a “green” vehicle. Depending on which state you live in, you could be eligible for a federal tax credit between $2,500 and $7,500. You should know, though, that the tax credits are only good for EVs that are purchased (and not leased). They also only apply if you buy an EV brand new. So snagging a used Tesla isn’t going to cut it.
You can investigate your own potential tax credit right here.
You might want to take the money you saved with tax credits and allocate them into your car insurance budget. On average, the cost to insure an electric vehicle is 23% more expensive than an equivalent combustion model. This is partly because the cars themselves are more expensive.
Since EVs are generally packed with the newest technology, they are a lot more expensive to repair or replace in the event of an accident or theft. As the infographic shows, you should expect to pay roughly $400-to-$500 more annually to insure your EV. No matter what kind of car you decide to buy next, make sure you aren’t caught driving without insurance. It will cost you.
Fuel and Charging Costs
For most people, these are the biggest questions they have concerning gas vehicles versus electric cars. Are electric cars really cheaper? How much will it cost to charge one? Are there enough charging stations? Will you need to install your own at-home charging equipment? We have the answers.
Let’s start with traditional gas cars. Depending on what you drive, your fuel costs will vary a lot. For example, a smaller sedan won’t guzzle gas like a larger SUV. However, taking all different models into consideration, the average American driver pays $1,117 per year in fuel costs. And that’s assuming there are no dramatic spikes in gas prices in the coming years. If you decide to stick with a non-EV, here are some handy tips on how to save money on gas.
On the other hand, it only costs an average of $485 annually to keep your electric car charged. Broken down even further, it only costs $6.86 to fully recharge your average EV battery. Compare that to $40 to fill the average gas tank. Additionally, the price of electricity historically drops over time. This happens as renewable energy costs keep falling. The growth of wind and solar power, for example, should see electricity costs continue to drop.
There are a few other things to consider, though. For starters, plenty of EV purchases require you to have your own charging equipment. Installing a charging station in your driveway or garage comes with a hefty one-time cost — up to $2,300, in some cases. Many EVs can be plugged into a normal household outlet, but your charging rate will be woefully slow. We’re talking about waiting days for a full battery, as opposed to mere hours.
If you don’t own your own home, that may pose a problem. Your landlord may not be willing to spend that money. And why would you spend your own money upgrading property you don’t own? On the other hand, if your lease includes utilities, that’s basically free charging (if it’s allowed). Consider trying to negotiate it into your next lease.
You can directly compare the costs of owning a gas-powered car with an electric on the Department of Energy’s eGallon tool.
Buying an electric car means things will look different when it comes to routine maintenance. A new EV doesn’t need oil changes, air filters, transmission fluid, or smog/emissions tests. Some parts do need regular replacing though, like brake pads. When the numbers are crunched, an electric car still costs much less to maintain over the years.
According to Consumer Reports, EV owners will save at least $300 a year on general maintenance costs. Other analysts are more generous, estimating that the savings could be as high as $800 annually.
One big factor of owning an electric car, however, is servicing the battery. Most EVs run on lithium-ion batteries, which are similar (but much larger) to the battery in your smartphone or laptop. You’re probably aware that these types of batteries degrade over time. If you plan to own your EV for more than 15 years, you may need to budget for an eventual battery replacement. It will be a multi-thousand dollar bill, depending on your make and model. For example, a new battery for a Tesla Model 3 can cost up to $16,000 to replace. The good news is that federal regulations require that an EV’s battery pack be covered under warranty for at least eight years or 100,000 miles. That will protect you against this expense for a while.
When we say longevity, we actually mean a few different things. For starters, we’re talking about how long the average car buyer keeps a new vehicle. In the U.S., it’s about six years. Looking back up at our infographic, you can see that we added up the estimated annual costs and multiplied them by six. The results? Your average EV will cost you $3,295 per year, compared to the $3,944 of a gas-powered car. When you factor in the higher average EV purchase price though, gas-powered cars actually have a lower six-year total cost. Then again, you can counteract that by NOT buying a $60,000 (or more) luxury EV.
Longevity can mean other things, too. For example, what kind of expenses will your car have if you plan to keep it longer? Over a long enough period of time, both kinds of vehicles will have expensive replacement or repair costs. It could be the transmission or other important engine components on a gas-powered car. An EV may eventually need a new battery or other expensive electronics replaced. In fact, the battery makes up 21% of the cost of a new EV. You don’t need to be a math expert to understand it would be an expensive replacement.
How Long is a ‘Lifetime’ of the Vehicle?
If you typically drive your cars for eight years or longer, you need to consider these “down-the-road” expenses. According to AARP, a typical gas car should last you about 200,000 miles. On the other hand, Tesla touts that their EVs should last at least 400,000 miles (and potentially as much as 600,000 miles).
A study from Consumer Reports found that opting for an EV will ultimately save you money over the lifetime of the vehicle. However, they defined a “lifetime” as 200,000 miles. That means you won’t actually reap those savings if you replace your vehicle every few years. On the other hand, if you tend to keep your new cars for six years or longer, buying an EV should see you spend less money in the long run.
Of course, this only works if you have comparable purchase prices. Comparing the longevity costs of a $30,000 gas powered sedan against a $50,000 EV is foolish. You’ll never make up the initial expense difference over the lifetime of your more expensive electric vehicle.
We mentioned at the start of this article that an all-electric driving future feels inevitable at this point. Indeed, the U.K. government has already pledged to eliminate the sales of new gas vehicles by 2030. Other governments are making similar laws. The state of California has also been particularly aggressive in the switch to electric. The Biden Administration in the U.S. recently promised to convert the federal government’s entire fleet into electric vehicles. All of these new laws are designed to help combat the growing threat of climate change.
Whether you’re personally concerned about climate change or not, it’s a reality that the entire planet is facing. Gasoline-powered cars continue to be a major source of pollution around the world. So does the extracting, refining, and use of fossil fuels that power those vehicles. Whether you’re trying to do your part to help or just getting ahead of the eventual legislative orders where you live, most of us will be driving an EV in the not-so-distant future. The only real question is when you will make the switch? And what will it cost you?
Like every other emerging technology, electric vehicles continue to get cheaper all the time. You no longer have to spend $100,000 on a fancy Tesla model to go green. There are plenty of cheaper alternatives out there. Even Tesla itself has promised to sell a fully-electric sedan with a $25,000 price tag by the end of 2023.
The growth of EVs can’t be denied. In 2015, only 580,000 EVs were sold worldwide. That number leaped up to 3.1 million by 2020. As the technology gets better and cheaper, more and more car buyers are leaning towards ditching their internal combustion engines for good.
However, there are two big factors that still keep prospective car buyers from making the switch. They are tied together. However, both overall driving range and available charging infrastructure remain a concern for potential EV owners. You can find a gas station on almost every other corner, but do you know where your closest public charging station is? Plenty of current EVs can travel well over 250 miles before they go dead. However, many drivers still fear they might end up with a dead EV battery somewhere on the side of the road. Range anxiety remains a very real thing.
The Bottom Line
The choice between buying a gas-powered car or an electric one is something that most of us will face over the next decade or two. Spending tens of thousands of dollars on any vehicle is a big decision for most people, so it’s worth digging deeper into the true overall cost of each vehicle. We hope our article has shed some light on these costs. No matter which kind of car you end up with, we have plenty of great tips on how to save money when buying a new car.
The extremely short answer is this: right now, an EV will probably cost you more money initially. That’s simply due to the higher purchase prices and the one-time cost of installing charging stations in your home. However, choosing electric will save you more money over time. The longer you own your vehicle, the more cost savings an EV will provide.
Which is cheaper to run gas or electric car? ›
The cost of charging an EV is almost always hundreds of dollars less a year than operating an equivalent gas-powered vehicle, according to a new report from Consumer Reports, the nonprofit advocacy organization. But that can vary considerably depending on where you live.Do you really save money with electric cars? ›
According to a study from the U.S. Department of Energy's National Renewable Energy Laboratory and the Idaho National Laboratory, EV owners can save as much as $14,500 on fuel costs by owning an electric car for 15 years. That's almost $1,000 in savings for every year of driving.Which is more efficient gas or electric cars? ›
Electric cars are energy efficient
AEVs like offerings from Tesla are far more efficient than conventional gas-powered vehicles: AEV batteries convert 59 to 62 percent of energy into vehicle movement while gas powered vehicles only convert between 17 and 21 percent.
There is a 4-cent difference per mile between owning a gas-powered car and an EV. EVs have lower maintenance costs, making them cheaper than gas-powered cars in their lifetime.What are the disadvantages of electric cars? ›
- Finding a Charging station - EV charging stations are fewer and further between than gas stations.
- Charging takes longer.
- The driving range on a full charge.
- Higher Initial Purchase Cost.
- Replacing the Batteries is Expensive.
Do electric cars lose range over time? Yes, but not as much as you may think or as fast as you may fear. Under current estimates, most EV batteries will last between 15-20 years or 100,000 to 200,000 miles before they need to be replaced, it is more likely that the battery will outlast the car.Is it worth buying an electric car now? ›
They are worth it if you lead a certain lifestyle. If you only drive around your city and have a place at home where you can charge your EV, an electric car could be a great deal for you. Besides the environmental benefits, EVs also require less maintenance, have lower running costs, and experience better performance.Are electric cars cheaper in the long run? ›
The 2021 study compared vehicles of multiple sizes and found that while the total cost of ownership over 15 years is similar between electric vehicles and their gas-powered counterparts, electric vehicles are slightly cheaper to operate per mile.How much will an electric car save me in fuel? ›
The average cost to charge an electric car is around 9p - 11p per mile (assuming the cost to pay for the electricity at home is 34 pence/kWh, which is the average unit cost of electricity). This is around 50% cheaper than the average cost of petrol per mile of driving (just over 20p per mile).What is the biggest problem with electric cars? ›
- Their batteries need rare metals. ...
- Making electric cars creates more emissions. ...
- They are only as green as their power sources. ...
- Electric cars can be expensive to buy. ...
- You can't drive as far in an electric car. ...
- There aren't enough charging points.
Why are people against electric cars? ›
The most common reasons drivers avoid EVs include fear the battery will run out of charge before reaching their destination, also known as “range anxiety,” fear of too few charging stations, long charge times, and initial higher upfront vehicle costs.What are the arguments against electric cars? ›
- EVs Are Too Expensive.
- Charging Takes Too Long.
- EVs Don't Have Enough Range.
- There's Nowhere To Charge.
- My Electric Bill Will Skyrocket.
- Batteries Wear Out, and They're Expensive To Replace.
Replacing an electric car battery will cost between $4,000-$20,000, but there are some cheaper options. Whitney Vandiver writes for NerdWallet about ways car owners can save money on ownership and maintenance.Do tires wear out faster on electric cars? ›
The tires of electric vehicles wear 20% faster than those of internal combustion engines, which is due to the acceleration of electric vehicles that generate strong instantaneous power.Are repairs on electric cars more expensive? ›
One of the more positive aspects electric vehicle ownership is that they are cheaper to run than their gas-fueled counterparts, and will cost less to maintain in that there are fewer components like an alternator, radiator, filters, belts, and hoses that will eventually need replacing.Do electric cars cost more to insure? ›
Generally, electric cars are more costly to insure than conventional vehicles. Because electric vehicles are pricier to both buy and repair, insurance providers charge their drivers more for coverage. That said, the savings you earn on gas and tax incentives might more than make up for your policy's extra cost.Why electric cars are not the future? ›
Here lies the primary reason why electric cars are not the future: Battery limitations are holding the industry back. Without a national, dependable network of charging stations, electric cars risk remaining a luxury product bought by wealthy suburbanites who can outfit their garages with personal charging stations.How do electric vehicles do in cold weather? ›
According to AAA's “Cold Weather Can Cut Electric Car Range by Over 40%”, EVs often lose 12% of their range in cold weather, but the loss leaps to 41% with the heater on full blast.How far can an electric car go at 70 mph? ›
It's also EPA range rated at 348 miles per charge when it's fitted with the 21" Arachnid wheels. In our Model S Plaid 70-mph range test, we were able to drive the Model S Plaid with the 21" wheel option a total of 300 miles in nearly perfect driving conditions.Do electric cars lose charge when parked? ›
EVs lose their charge when parked, much like any other electrical device would. Most manufacturers recommend charging the battery up to 80% before parking it for a long time. The reason is that if the battery is fully charged and left for too long, it could end up damaging the battery.
What happens if you run out of charge in an electric car? ›
Running out of gas or electricity produces the same result: your car will stop. In the case of a gas car, a roadside service truck can usually bring you a can of gas, or tow you to the nearest gas station. Similarly, an electric car can simply be towed to the nearest charging station.Which is better electric or hybrid? ›
hybrid cars, the difference is clear. Electric models rely completely on their batteries to power them, while a hybrid model uses the battery to enhance its fuel economy. Electric models also receive the highest tax incentives and need to be charged, while hybrid models passively regenerate their battery.Can you leave an electric car outside in the winter? ›
Some EVs have battery heaters that turn on in the coldest temperatures (e.g. below 0° F) to prevent permanent battery damage, so it is often prudent to leave your EV plugged in overnight when "polar vortex" air visits your neighborhood – especially if your vehicle is parked outside.Will electric car be cheaper in future? ›
Nitin Gadkari: Electric Vehicles will become as affordable as petrol vehicles by next year. We're in November, and in a couple of months, we'll be in 2023. And 2023 is the year that electric vehicles will be as affordable as petrol vehicles, according to Union Transport Minister Nitin Gadkari.Will electric cars get cheaper in 5 years? ›
According to Treehugger.com, experts anticipate that EVs and gas-powered cars will cost about the same by 2025. As even more EVs are manufactured, they will become less expensive to produce, with some experts claiming they will be even cheaper than their gas-powered counterparts in just a few years.Will an electric car last 200000 miles? ›
The average lifetime mileage of an ICE vehicle is about 133,000 miles. While experts estimate the average EV battery will last around 200,000 miles, some manufacturers already promise much more than that.Do fully electric cars last longer? ›
The electrical system (battery, motor, and associated electronics) typically requires minimal scheduled maintenance, and brake systems generally last longer than those on conventional vehicles because of regenerative braking.How much does it cost to drive 100 miles in an electric car? ›
EV drivers who charge up at home spend about $11.60 per 100 miles. The price difference is more dramatic for those who mainly recharge at stations. Frequent charging station users pay $14.40 per 100 miles.How much money will I save switching to an electric car? ›
$2,437 per year. $586 per year. Switch to EV and save big on fuel.How much does it cost to run an electric car per month? ›
Charging an electric car will typically add $30 to $60 a month to your utility bill. Electric cars are generally cheaper to fuel and maintain than conventional cars, although they may cost more to buy. Some utility companies offer discounts for electric car owners.
Do electric cars last longer than gas cars? ›
While battery life used to be a concern for prospective EV owners, modern technology has allowed EVs to last as long if not longer than traditional gasoline-powered vehicles.What year will all cars be electric? ›
Every new passenger car sold in the world will be electric by 2040, says Exxon Mobil CEO Darren Woods.Why electric vehicles are getting fired? ›
Hot summers and bad thermal management affect performance & life but don't cause fires. It's like using your phone on a hot day, after keeping it on the vehicle dashboard — it's slow, hot, & shortens life. But they don't affect safety! 99% of battery fires are due to short circuits leading to uncontrolled current.Why are electric cars bad for society? ›
Like many other batteries, the lithium-ion cells that power most electric vehicles rely on raw materials — like cobalt, lithium and rare earth elements — that have been linked to grave environmental and human rights concerns. Cobalt has been especially problematic.Do electric cars give trouble? ›
There is no denying, however, the finding that a higher percentage of electric car owners reported problems with their vehicle in the first four years of ownership. Nearly one in three (31pc) EV drivers reported a problem in that timespan.How long do new electric car batteries last? ›
Electric car battery technology
This decreases the range and time needed between each journey to charge. Most manufacturers have a five to eight-year warranty on their battery. However, the current prediction is that an electric car battery will last from 10 – 20 years before they need to be replaced.
How much does a Tesla battery cost at a Tesla service center? Replacing a 75 kWh battery for Model 3 costs around $16,550. However, battery costs could change depending on your car's model. Remanufactured packs cost between $9,000-$10,000, but brand-new batteries might cost up to $22,500.How long does it take to fully charge an electric car? ›
Level 1 chargers can take 40-50 hours to charge a battery electric vehicle (BEV) from empty and 5-6 hours to charge a plug-in hybrid electric vehicle (PHEV) from empty.Do electric cars need servicing? ›
An electric car needs to be serviced as often as any car. The service will include: Tyre wear and tear & tyre pressure check. Windscreen wiper replacement.Is it free to charge an electric car at Walmart? ›
You can't charge an EV at Walmart for free. But, Walmart does offer fast chargers that let you charge the electric vehicle in about 15-30 minutes while you're out shopping. However, not all Walmart stores support charging stations.
How often does an electric car need to be serviced? ›
EVs do require a twice-a-year service check for the vehicle system and tire rotations. These help maintain optimal battery performance and the EV's longevity. EVs in operation for longer than 8 to 10 years and after the manufacturer warranty expires will probably also need a battery replacement at some point.Do electric cars really save money? ›
According to a study from the U.S. Department of Energy's National Renewable Energy Laboratory and the Idaho National Laboratory, EV owners can save as much as $14,500 on fuel costs by owning an electric car for 15 years. That's almost $1,000 in savings for every year of driving.What are the hidden costs of electric cars? ›
- Higher insurance rates. ...
- Repair costs. ...
- High initial costs. ...
- Higher registration fees. ...
- Range anxiety.
Most drivers don't realize that EVs pay for themselves in eight to ten years. Buying an electric car isn't just good for the environment in the long term, but it's great for your bank account in the short term. For some reason, drivers and automakers don't spend enough time explaining the numbers.Do you save money on gas with a Tesla? ›
On the other hand, the Tesla Model S has an electric charge cost of $0.037 per mile (which is roughly the cost you'd pay to charge your Tesla at home), which puts you at $555 to drive the same distance of 15,000 miles. So, yes, the fuel savings with a Tesla is significant.What happens if you run out of electric car? ›
Most breakdown providers will send a flatbed truck to pick up your EV instead. Not all models come with this concern. The Nissan Leaf, for example, can be towed as long as its front two wheels are raised because that's where the traction motors are.Will electric cars eventually take over? ›
If half of all cars sold by 2030 were electric, EVs could make up between 60%-70% of cars on the road by 2050. Momentum is certainly building for the transition to electric. Automakers are ramping up EV production and many new models are expected over the next few years.How long can you leave an electric car without driving it? ›
How long can an electric vehicle sit idle? An electric car can generally idle for up to two hours without problems. However, if the temperature is very cold or hot, the battery may not last as long. In addition, if the car is idling in a stop-and-go traffic jam, the battery will drain more quickly.Why is no one buying electric cars? ›
In addition to the myths, there are also some obvious reasons many car shoppers simply aren't yet buying into EVs, such as the high sticker price, range anxiety and the fear of battery degradation and potential fires.How can poor people afford electric cars? ›
California has spent more than $400m on various incentive programs to help lower-income drivers purchase zero-emission vehicles. There is the CC4A program, which offers up to $9,500 toward a down payment for an electric vehicle if the applicant turns in a vehicle older than a 2005 model.
Do electric cars lose value quickly? ›
Do electric cars lose value faster? There isn't enough evidence to prove that EVs depreciate faster than other types of cars. But some numbers suggest that EVs lose 50% of their value after three years as compared to traditional vehicle types that lose 60% in the same period.Are Tesla charging stations free? ›
For drivers of older Tesla models, use of both networks is free. Any Tesla ordered after 15th January 2017 will need to pay to use the rapid Supercharger points, though each vehicle has 400 kWh in Supercharging credits a year, enough for around 1,000 miles annually.Is it cheaper to run a Tesla or a gas car? ›
In general, the cost of charging a Tesla is more than 3 times cheaper per mile than the cost of fueling a gas-powered car (4.56 cents per mile compared to approximately 13.73 cents per mile for gas vehicles).Is the insurance on a Tesla cheaper than gas car? ›
Insurance for a Tesla tends to be significantly more expensive than that of other popular vehicles, despite high safety ratings. Still, rates can vary drastically, even among different Tesla models. Below are the average annual insurance rates by Tesla model, ranked from cheapest to most expensive: Model Y ($2,040).