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Last updated: October 9, 2024

Gas vs. Electric Vehicles: Which Costs Less to Own?

Electric vehicles cost over a third more to purchase than gas-powered vehicles. But what about other driving costs?

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The cost of car ownership is more than just the sticker price of the car itself. To find the true cost, you have to take into account factors like fuel, maintenance, insurance, depreciation and tax credits. When you take all of these expenses into account, electric vehicles (EVs) — priced on average at 35 percent more than gas-powered vehicles — can be cheaper to drive, especially if you qualify for the federal rebate. Let’s look closer.

Editor’s note (last updated August 8, 2024): We have updated this page with the most recent data from AAA’s 2023 Your Driving Costs report.

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Gas vs. Electric Vehicle Costs

While electric vehicles may cost more upfront, they are cheaper to own on a yearly basis due to their reduced fuel, maintenance, repair, tire, licenses, taxes, and registration costs, according to 2023 data from AAA1.

Overall, the AAA study found that the cheapest car to drive is a small, gas-powered sedan, followed by a hybrid vehicle or subcompact SUV. Meanwhile, the most expensive car to drive is a half-ton pickup and a medium SUV or midsize pickup, vehicles known as gas guzzlers. An electric vehicle fell in the middle — less expensive than a medium, gas-powered sedan, but more expensive than a compact SUV (unless you drive 20,000 miles or more).

Annual cost by annual mileage 10,000 15,000 20,000
Small sedan $7,707 $8,939 $10,188
Subcompact SUV $8,351 $9,718 $11,104
Hybrid vehicle $8,445 $9,650 $10,877
Compact SUV (FWD) $8,623 $10,066 $11,533
Electric vehicle $9,099 $10,112 $11,154
Medium sedan $9,538 $11,048 $12,477
Medium SUV (4WD) $10,239 $11,971 $13,733
Midsize pickup $10,393 $12,358 $14,156
1/2-ton crew cab pickup $13,818 $15,858 $17,940
2023 weighted average $10,549 $12,182 $13,844

Purchase Price

There’s no doubt that electric vehicles currently cost more to purchase than gas-powered cars, with an average price of $56,371 compared to $48,0644, according to June 2024 data from Kelley Blue Book (KBB)2. While previously, KBB reported that the price gap between EVs and gas-powered vehicles will be closing, the gap actually increased since Tesla released the Cybertruck, its best-selling vehicle with an average price of $112,696.

But don’t let sticker shock scare you away: overall, EVs may be cheaper to drive when you take into account tax rebates, fuel savings and more.

Fuel

Electric and hybrid vehicles have the lowest fuel costs. Compared to rising gas prices, electricity costs are generally lower.

Annual cost by annual mileage Cost of fuel per mile in cents
Electric vehicle 4.74
Hybrid vehicle 9.58
Small sedan 11.18
Medium sedan 12.52
Compact SUV (FWD) 12.76
Subcompact SUV 13.17
Medium SUV (4WD) 16.66
Midsize pickup 19.05
1/2-ton crew cab pickup 22.31
2023 weighted average 15.93

Maintenance

Electric vehicles are also the least expensive to maintain, with significantly fewer engine and mechanical breakdowns to worry about.

Annual cost by annual mileage Cost of maintenance per mile in cents
Electric vehicle 8.12
Hybrid vehicle 9.09
Small sedan 9.11
1/2-ton crew cab pickup 9.42
Subcompact SUV 9.51
Midsize pickup 10.35
Compact SUV (FWD) 10.39
Medium SUV (4WD) 10.57
Medium sedan 10.85
2023 weighted average 9.83

Insurance

However, one area where electric vehicles rack up higher fees is car insurance. Because EVs have higher purchase prices than gas-powered vehicles, they are generally more expensive to repair and, thus, more expensive to insure, the second-highest vehicle to insure after medium sedans. However, the difference between the most and least expensive vehicle types to insure is less than $250 per year, which is a drop in the bucket as far as annual vehicle ownership costs go.

Annual cost by annual mileage Annual cost of full-coverage insurance
Midsize pickup $1,679
Compact SUV (FWD) $1,681
Medium SUV (4WD) $1,685
Hybrid vehicle $1,710
Subcompact SUV $1,713
Small sedan $1,794
1/2-ton crew cab pickup $1,807
Electric vehicle $1,820
Medium sedan $1,922
2023 weighted average $1,765

We’ve reviewed the best car insurance companies for electric vehicles.

DID YOU KNOW?

Because of their high repair costs following accidents, many new Tesla Model Ys are showing up in junk yards as they’re cheaper to replace rather than repair.

Depreciation

Depreciation

Another disadvantage of EVs is that they depreciate more than most gas-powered vehicles save for ½ -ton crew cab pickups, which makes sense when you consider their higher prices to begin with. For the least amount of depreciation, buy a small sedan, which loses only $217 of its value with an annual mileage of 10,000.

Vehicle type Depreciation with 15,000 annual mileage (averaged over 5 years)
Small sedan $2,846
Subcompact SUV $3,102
Medium sedan $3,922
Hybrid vehicle $3,401
Compact SUV (FWD) $3,332
Electric vehicle $5,296
Medium SUV (4WD) $4,136
Midsize pickup $4,089
1/2-ton crew cab pickup $6,464
2023 weighted average $4,538

Tax Credits

Electric vehicles are the only type of vehicle that will save you money on your tax return in the form of federal rebates. EV owners save, on average, $192 per year on their taxes, licenses and registrations.

Vehicle type Annual cost of license, registration and taxes
Electric vehicle -$192
Small sedan $505
Subcompact SUV $599
Compact SUV (FWD) $629
Medium sedan $668
Hybrid vehicle $692
Medium SUV (4WD) $816
Midsize pickup $825
1/2-ton crew cab pickup $1,099
2023 weighted average $762

However, not every EV owner qualifies for this rebate. To be eligible, you must purchase have purchased the following types of vehicles, in or after 2023:

  • New plug-in and fuel cell EVs
  • Pre-owned plug-in and fuel cell EVs

For a vehicle purchased before 2023, it must be a new plug-in and fuel cell EV.

Here is a list of electric vehicles that qualify for a rebate of up to $7,500, according to the United States Department of Energy: https://www.fueleconomy.gov/feg/taxevb.shtml.

Along with the vehicle qualifications, there are restrictions on the owner and usage of the vehicle that affect rebate eligibility3:

  • You must use the vehicle, not resell it.
  • You must use the vehicle in the U.S. primarily.
  • Your income cannot exceed:
    • Married couples filing jointly: $300,000
    • Heads of households: $225,000
    • All other filers: $150,0004

Note that this is not an exhaustive list of qualifications. Check the IRS website to see if you qualify.

Hybrid vs. Electric Vehicle Costs

Hybrid vehicles, also known as HEVs (including plug-in hybrid electric vehicles, or PHEVs), cost about 2 percent less to own over the course of a year compared to completely electric vehicles. That being said, EVs benefit greatly from tax rebates, which lowers depreciation. EVs, being able to depend entirely on electricity, have fuel costs that are less than half of hybrid vehicles’.

Vehicle type Hybrid Electric
Annual cost of license, registration and taxes $692 -$192
Depreciation with 10,000 annual mileage -$272 -$370
Depreciation with 15,000 annual mileage $3,401 $5,296
Depreciation with 20,000 annual mileage $294 $399
Average depreciation $1,141 $1,775
Annual cost of full-coverage insurance $1,710 $1,820
Cost of maintenance per mile in cents 9.09 8.12
Cost of fuel per mile in cents 9.58 4.74
Finance charges $1,260 $1,046
Total cost per year with annual mileage of 10,000 $8,445 $9,099
Total cost per year with annual mileage of 15,000 $9,650 $10,112
Total cost per year with annual mileage of 20,000 $10,877 $11,154

However, hybrids have the distinct advantage of being able to depend on gas if you’re driving through an area that lacks public charging points, which is a barrier for many people considering EV purchases.

How to Calculate the Cost of Owning a Vehicle

Our gas vs. electric car calculator helps you determine how much an EV could save you, depending on where you live and how much you drive.

If you’re considering switching to a more fuel-efficient car, like a hybrid or smaller sedan, our fuel efficient savings calculator can help you decide whether a trade-in is worth it.

You can use this calculator from AAA to determine the cost of vehicle ownership based on your car model and usage: https://www.aaa.com/autorepair/drivingcosts.

You can also use the following calculators to determine other costs associated with car ownership:

Should You Buy an Electric Vehicle or a Gas Vehicle?

So, which vehicle type is right for you? Let’s break it down.

Buy an electric car if:

  • You can qualify for federal tax credits.
  • You live in an area with a lot of EV charging stations or charging at home is a possibility
  • You drive in your home area primarily or have another gas-powered vehicle for long-distance drives.
  • You are okay with higher car insurance costs of about 9 percent.

NOTE:

As of August of 2024, the state of California had the highest number of public EV charging ports at 46,4185.

Buy by a gas car if:

  • Your area lacks public charging stations and you can’t build one at home.
  • You don’t qualify for the federal tax credits.
  • You want lower auto insurance costs.
  • You want to take long-distance road trips.
  • You want to pay less for your car initially.

Conclusion

There’s no doubt that electric vehicles are here to stay, especially as the number of publicly available charging stations increases. However, for most people, they are simply too expensive to purchase right now, even with their reduced driving costs, particularly if you don’t qualify for the federal rebate.

Frequently Asked Questions

Is a Tesla cheaper than gas?

In terms of fuel costs, a Tesla is cheaper than gas as electricity is cheaper than gas fuel. However, in terms of purchase price, Teslas are more expensive than gas-powered cars on average.

Are Tesla charging stations free?

Tesla charging stations are not free in most cases. However, you might have free Supercharging miles available if you participated in a referral program. If you have credits, you can find them in the Tesla app under Charging. The credits expire two years after your car’s delivery date.

How much does it cost to fill up a Tesla?

On average, it costs about $15 to charge a Tesla, although it could range from $11 to $18, according to EnergySage.

Do electric cars have air conditioning?

Yes, electric cars have air conditioning just like gas-powered vehicles. But keep in mind that the AC is battery-powered, so it might affect the EV’s range.

Aliza Vigderman
Written by:Aliza Vigderman
Senior Writer & Editor
A seasoned journalist and content strategist with over 10 years of editorial experience in digital media, Aliza Vigderman has written and edited hundreds of articles on the site, covering everything from plan coverages to discounts to state laws. Previously, she was a senior editor and industry analyst at the home and digital security website Security.org, previously called Security Baron. She has also contributed to The Huffington Post, SquareFoot, and Degreed. Aliza studied journalism at Brandeis University.

Citations

  1. Your Driving Costs. AAA. (2023).
    https://newsroom.aaa.com/wp-content/uploads/2022/08/2022-YDC-Costs-Break-Out-by-Category.pdf

  2. Electric Car FAQ: Your Questions Answered. Kelley Blue Book. (2022, Oct 31).
    https://www.kbb.com/car-advice/electric-car-faqs/

  3. Tax Incentives. U.S. Department of Energy. (2023).
    https://www.fueleconomy.gov/feg/taxcenter.shtml

  4. Credits for New Clean Vehicles Purchased in 2023 or After. IRS. (2023).
    https://www.irs.gov/credits-deductions/credits-for-new-clean-vehicles-purchased-in-2023-or-after

  5. Electric Vehicle Charging Ports by State. AFDC. (2024).
    https://afdc.energy.gov/data/10366