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

A new study provides a state-by-state breakdown of the cost of operating your electric car.

There are plenty of climate and air quality reasons to buy an electric vehicle (EV), but are they cheaper to drive? It’s the deceptively complicated question that has befuddled car shoppers for years. The average sticker price on an electric car is $19,000 higher than an average gasoline-powered vehicle, so consumers want to know how much of that cost will be recouped in fuel savings over the life of the vehicle. The difference is due in part to the fact that many EVs are luxury vehicles but, still, the numbers have historically been very fuzzy.

Scientists at the U.S. Department of Energy's National Renewable Energy Laboratory (NREL) and Idaho National Laboratory give us the most comprehensive picture yet in a recently released study published in the journal Joule. Going state by state, they broke down the lifetime fuel costs of battery-powered electric vehicles versus internal combustion engine cars. Here are the highlights.

Electric car aficionados in Washington State can make the best case for the big purchase. Over the anticipated 15-year life span of a vehicle, the electricity required to run a battery-powered electric car can be as much as $14,480 cheaper than fueling up an internal combustion vehicle. On the other end of the spectrum is Hawaii. In a worst-case scenario, charging up your electric car could ultimately cost $2,494 more than topping up a gas tank over 15 years. (Note: Plug-in hybrids, which can run on electric battery or gasoline, further complicate the financial picture. For the sake of simplicity, we’re focused here on electricity-only vehicles.)

How can such a wide variation be possible? A surprising number of variables affect the cost of operating a car. The most obvious is the regional variation in gasoline prices. Last year, for example, the average cost of a gallon of gasoline on the West Coast was 46 percent higher than in communities around the Gulf of Mexico.

Then there are electricity costs, which make the notoriously unstable costs of gasoline look simple by comparison. While the average cost of a kilowatt-hour doesn’t change dramatically year to year, the specific cost of electricity can vary by the hour. Where, when, and how you choose to charge your electric car generates wide swings in charging costs. For example, if you relied exclusively on state-of-the-art fast-charging stations, your costs for charging would increase by more than 70 percent compared to just parking the car in your home garage and hooking it up to the slow-charging equipment that came with the vehicle. Charging the car overnight, when electricity demand drops and prices are low, can also save you 30 percent compared to charging at whatever time of day your car runs a little low.

From the study: state-level variability in lifetime fuel cost savings for battery electric vehicles in the baseline scenario

National Renewable Energy Laboratory

The state-by-state numbers above represent an average consumer’s behavior. The NREL scientists attempted to create real-world scenarios based on the way people typically use their cars. That means you can save substantially more than the fuel costs the NREL predicts if you time your charging right and stretch the lifetime of your car beyond 15 years.

Consumers should, of course, consider a variety of financial factors when purchasing a car. Fuel savings aren’t the only benefit that electric vehicles have over internal combustion cars. Most experts agree that the maintenance costs on an electric car are much lower. They have fewer moving parts, fewer fluids to keep topped up, and they are easier on brake systems. Although the precise savings are hard to pin down, New York City has reported dramatic numbers for its city fleet. In 2019, the city spent between $204 and $386 maintaining each of its electric cars, compared to more than $1,600 for the average gasoline-powered car. Add up yearly cost differences like that over the course of a vehicle’s lifetime and you could reap incredible savings with an electric car.

It’s also worth noting that the fuel savings reported in the NREL paper are a snapshot of current prices. As electric vehicles become more common, it’s likely that the cost of charging equipment will drop significantly. The cars themselves could also become more cost-competitive with gas-powered vehicles, and the demand for more affordable EVs is already here. According to a survey conducted last year by Consumer Reports and the Union of Concerned Scientists, 31 percent of participants whose incomes are less than $50,000 a year were interested in making their next car an electric one. And across income levels, 42 percent of people of color said they are considering an EV as their next purchase, compared to 36 percent of the respondents overall.

Federal tax rebates, state incentives, and other initiatives can also increase the accessibility of low-emissions vehicles. California’s Clean Cars 4 All program, for instance, helps low-income people living in communities with poor air quality turn in their old gas guzzlers for a stipend of up to $9,500 toward the purchase of an electric or hybrid car, or up to $7,500 in public transit options.

In addition to helping boost air quality, electric vehicles can also reduce the electric bills for everyone. “Electric vehicle charging is good for utility customers, even if they don’t drive an EV, because added utility revenue puts downward pressure on rates,” says Luke Tonachel, director of NRDC’s Clean Vehicles and Fuels Group. “That’s especially good during these tough economic times.”

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