Is it cheaper to drive an electric vehicle?

Courtney Lindwall

THERE are plenty of climate and air quality reasons to buy an electric vehicle (EV), but is it cheaper to drive?

While this is a complicated question that has befuddled car shoppers for years, in most cases, an EV will indeed be cheaper in the long run. And with carmakers slashing prices for EVs in the past year, on top of state and utility incentives for eligible buyers, you may even be able to score a bargain up front. Let us sort out the details.

Sticker prices

According to data from Cox Automotive (parent company of Kelley Blue Book), the average price paid for a new EV continues to fall — in September 2023, it came down by US$14 300 over the prior year. This amounted to a cost of just US$2 800 more than the average paid for a new petrol-powered vehicle. And with the EV market growing rapidly, the price margin is expected to shrink even more in the coming years as manufacturers produce more affordable models and improve battery technology, the most expensive part of an EV.

You can mitigate some of that cost by making use of state incentives, which can shave thousands off an EV’s price tag.

And federal tax credits — recently scrapped by (the US) Congress, despite their popularity — remain available through September 2025. (Those credits include up to US$7 500 for a new EV and US$4 for a used one, with some limitations.)

Additionally, many (US) states continue to offer their own tax incentives, so take the time to search for what is available for the model you are interested in buying.

Once you have an idea of what incentives you qualify for, you should be able to better compare car prices.

Cost of electricity vs petrol 

Here is where EV owners win out. Going electric means you get to skip pricey trips to the pump, which is one of the biggest draws for making the switch.

A 2018 study by the University of Michigan’s Transportation Research Institute found that the average cost to fuel an electric car was US$485 a year, compared to US$1 117 for a petrol-powered vehicle.

A 2020 Consumer Reports study similarly showed that EV drivers tend to spend about 60 percent less each year on fuel costs compared to drivers of petrol-powered cars.

And in 2023, the non-partisan policy firm Energy Innovation released a report showing that these savings benefit drivers across the United States: Every EV model in every state is cheaper to fill than a petrol-powered vehicle.

These savings are largely based on the fact that current EVs are 2,6 to 4,8 times more efficient at travelling around 1,6 kilometres compared to a petrol internal combustion engine, according to real-world data collected by the US Department of Energy (DOE).

And importantly, electricity prices are more stable and predictable than petrol prices. For the latter, we see routine price swings, which are heavily influenced by global oil markets, geopolitical conflict, extreme weather events and supply chain disruptions.

In contrast, electricity is typically regulated at the state or local level, with pricing subject to long-term planning and utility rate oversight.

Many utilities also offer time-of-use rates, allowing EV drivers to charge during low-cost, off-peak hours — giving you even more control over refuelling costs. Your actual savings will depend on a few key factors, including how efficient your EV is, how you charge it and where you live.

Here is why.

To estimate your own charging costs, multiply an EV’s kilowatt-hour (kWh/100) mileage rate by your electricity rate (measured in cents per kWh and typically found on your monthly utility bill). This gives your cost per 100 miles driven.

Multiply that by how much you drive per month to estimate the increase in your electricity bill. After figuring in the number of miles you typically drive in a month, you will be able to see how much your electric bill may go up.

Keep in mind that public charging stations — especially at high-speed DC fast chargers — tend to be more expensive than at home. If you rely exclusively on public infrastructure, your fuel savings may shrink to some extent.

Once you have accounted for your preferred EV model, where you charge and how much you drive, compare your estimated charging costs to your current petrol spending. For many drivers, the case for going electric will win out.

Maintenance costs

Without spark plugs to replace or oil to change, EVs have a clear leg up on maintenance costs. EVs also have the unique feature of “regenerative” braking — recovering the energy normally lost to braking — which saves on brake pad replacements. Electric cars do still require some basic maintenance, of course, like service checks and tyre rotations. But in general, on a per-mile basis, EV maintenance and repair costs run about 40 percent lower than comparable petrol vehicles.

Lifetime costs

Now, to calculate that all-important number: whether an electric car will be cheaper over the life of the vehicle.

You can figure out your savings estimate by adding together the up-front costs of your specific model (minus tax rebates) and then ongoing costs. You will need to account for your model’s efficiency, how much you plan to drive, regional electricity costs, charging habits and maintenance costs per year. Then compare those to the petrol-powered alternative.

Note that the average amount of time that a driver keeps a new vehicle is seven years; this is the metric that the authors of a 2025 study from Atlas Public Policy, conducted on behalf of NRDC, used when investigating how expenses would stack up for owners of petrol cars versus EVs.

Weighing the total cost of ownership for five of the most popular internal combustion models across different vehicle classes — a compact sedan up to a pickup — and comparing each to a similarly sized electric version of the same type, the study found that owning an EV is cheaper in four of five categories. The pickup was the single exception.

Another popular model to consider when shopping for a green and budget-friendly car is a plug-in hybrid. These vehicles operate partly on petrol and partly on electricity from the grid. A plug-in hybrid with an all-electric range of 80,4 kilometres could enable you to drive mainly on electricity. — nrdc.org