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Electric vehicles cost over a third more to purchase than gas-powered vehicles. But what about other driving costs?
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.
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 |
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.
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 |
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 |
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.
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.
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 |
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:
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:
Note that this is not an exhaustive list of qualifications. Check the IRS website to see if you qualify.
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.
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:
So, which vehicle type is right for you? Let’s break it down.
Buy an electric car if:
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:
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.
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.
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.
On average, it costs about $15 to charge a Tesla, although it could range from $11 to $18, according to EnergySage.
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.
Your Driving Costs. AAA. (2023).
https://newsroom.aaa.com/wp-content/uploads/2022/08/2022-YDC-Costs-Break-Out-by-Category.pdf
Electric Car FAQ: Your Questions Answered. Kelley Blue Book. (2022, Oct 31).
https://www.kbb.com/car-advice/electric-car-faqs/
Tax Incentives. U.S. Department of Energy. (2023).
https://www.fueleconomy.gov/feg/taxcenter.shtml
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
Electric Vehicle Charging Ports by State. AFDC. (2024).
https://afdc.energy.gov/data/10366