Gas vs Electric Cars: Compare Fuel, Maintenance & Ownership Costs

As gas prices continue their volatile trajectory and climate concerns push more drivers towards eco-friendly transportation, the question of whether to go electric or stick with gasoline is on many drivers' minds.

While electric vehicles (EVs) offer the promise of lower fuel and maintenance costs, the upfront sticker prices are often higher, and so are insurance costs. So, which option truly provides the better overall value? Well, we did the math. Let's take a closer look at how gas and EV ownership expenses stack up.

Fuel prices: Gas vs EV costs

Is charging an electric car that much cheaper than gas?

When we talk about saving money by going electric, this is the first thing that pops into most people’s minds. It’s one of the electric car industry’s biggest selling points—and for good reason. Everyone has seen over the last few years how expensive and volatile gas prices can get when compared to electricity costs. But let’s look at the numbers to find out how much you can save on fuel costs by going electric.

Gas Prices for ICE Vehicles

The staggering average price of filling up a gas tank is all too familiar and painful for most drivers. High gas prices have persisted in recent years, with the national average currently hovering around $3.50 per gallon. Prices tend to be even higher on the coasts and in other densely populated areas (California still sits at a whopping five bucks per gallon!).

Constantly fluctuating gas costs make it difficult to budget and predict operating expenses for drivers of gas-powered vehicles. Prices can spike with little warning due to factors like crude oil supply disruptions, seasonal demand increases, geo-political conflicts impacting oil production, and more.

Charging Costs for Electric Vehicles

In stark contrast, electricity prices are far more stable and affordable. As of March 2024, the national average cost of electricity is about 15 cents per kilowatt-hour (kWh), according to the U.S. Department of Energy.

To compare efficiency between EVs and gas vehicles in an apples-to-apples way, the Department of Energy developed the miles per gallon equivalent (MPGe) rating system. This translates an EV's electricity consumption into mpg-like numbers.

For example, the 2024 Tesla Model 3 has an MPGe rating of 132. This means the electric Tesla Model 3 has the equivalent efficiency of a gas-powered car getting 132 mpg. Pretty incredible when you consider the average gas vehicle gets around 25 mpg!

The average electric vehicle gets around 3-4 miles of range per kWh, which equates to a "fuel" cost of just around 3-5 cents per mile at the 15 cent/kWh national average. For a gas vehicle getting 25 mpg, the cost per mile is around 15 cents at the current $3.50/gallon price. That's about 3-4 times higher than the cost of driving an electric car! These kinds of fuel savings really start to add up, especially for EV drivers with longer commutes.

Of course, electricity rates can vary by region and utility provider. Prices also tend to be higher if you live in an area that sources more power from fossil fuels compared to renewable sources like solar, wind, hydro or nuclear. The map below offers a sense of how many miles per gallon a gas-powered car would need to get in order to be cheaper than an EV.

To find out how much you personally would save, check the EV Life Savings Calculator.

The Cost of Going Green: EV vs. Gas-Powered Car Prices

One of the biggest hurdles and criticisms surrounding most EVs is the higher initial purchase price compared to similar gas-powered models. Battery packs are extremely expensive, which drives up sticker prices. However, the upfront cost gap should continue shrinking as EV battery technology improves and production scales up to meet higher demand.

In the meantime, there are a number of incentive programs in place that can help offset the upfront cost of an electric vehicle.

Save Money with EV Tax Credits

To help offset the price difference of most EVs, the federal government offers a Federal EV Tax Credit of up to $7,500 for new EVs and $4,000 for used EVs through the Inflation Reduction Act. Some utilities also offer rebates, and there are a number of state and local incentives. These savings can make a serious dent in the price premium over gas vehicles.

It's worth noting that qualification rules do shift frequently for these incentives, and there are caps on vehicle pricing and income limits. But for many drivers, thousands of dollars in tax credits are currently available.

Maintenance Costs: Electric vs. Gas Cars

Another key area where EV ownership offers cost savings is maintenance and repair expenses. With fewer moving parts, fluids, and complex systems compared to gas vehicles, electric cars require far less routine service and replacement parts over their lifetimes of daily driving.

You'll never need to worry about oil changes, air filter replacements, spark plug swaps, timing belt replacements, or any other maintenance related to an internal combustion engine. Electric vehicle "mechanics" are generally much simpler, from basic tire rotations to brake and windshield wiper replacements. This can lead to serious maintenance savings over 5-10 years of ownership.

One caveat is that electric vehicle battery packs will eventually need to be replaced after 8-10 years or around 100,000-200,000 miles for most models (though Tesla claims their batteries will last between 300,000-500,000 miles). Battery replacements can cost anywhere from $5,000 to $20,000, depending on the vehicle. While this is a significant expense, it's still likely you'll come out ahead on total maintenance costs compared to a gas vehicle's lifetime service needs.

Electric vs Gas Cars: Cost of Ownership

So, which type of vehicle truly provides the better overall value when you account for all the costs of purchasing, operating, maintaining, insuring, and financing? To dig deeper, let's look at a detailed cost of ownership analysis from Consumer Reports in 2020 comparing the operating costs of electric vehicles vs. gas counterparts. The study found:

• Fuel savings. Typical EV owners who mostly use home charging for their electric vehicles to lower costs can expect to save an average of $800 to $1,000 a year on fuel costs over an equivalent gasoline-powered car.
• Maintenance and repair. Maintenance and repair costs for electric vehicles are about 50% lower than for gasoline-powered vehicles.

Tools to help you calculate the cost of owning an electric vehicle

If you're considering making the jump to an electric vehicle for your next car purchase, be sure to run the numbers first using one of these helpful cost calculators:

• EV Life Savings Calculator. Allows you to calculate which incentives you qualify for, fuel savings, and how much you could save on monthly payments by financing with EV Life.
• Clear Result EV Savings Calculator. Customized calculator based on your location, driving habits, what you typically spend on gas, and more
• ChargEVC Calculator. Compares yearly gas costs versus EV charging costs based on your driving habits.

Save Even More With EV Life

With gasoline prices bound to remain volatile and environmental pressures mounting, the future of sustainable transportation—and savings—is electric. Are you ready to make the switch? EV Life can help get you behind the wheel of a new or used electric vehicle with attractive finance rates and affordable loan payments that meet your budget.

EV Life offers competitive financing terms and makes sure you get every EV tax credit, rebate, and incentive you qualify for to maximize your savings.

How the EV Climate Loan Works

• Pre-qualify for more than financing. When you pre-qualify for an EV Climate Loan, EV Life helps you maximize your federal tax credit and other state and local incentives for which you’re eligible. We then help you apply for all the paperwork with our easy-to-use “Turbo Tax-style” incentive filing tools.
• Bundle charging. EV Life can also help you get an instant quote for EV charging equipment installation and bundle it into your auto financing—all with one lower monthly payment.
• One low payment. Once we’ve determined every available dollar you’re eligible for, EV Life will gather all your savings and apply them directly to your loan, significantly reducing the monthly payment from the moment you drive off the lot.

Get pre-qualified today to discover how much you could save.