The total cost of EVs and gasoline cars can vary greatly depending on your location.

• Electric vehicles generally cost more up front than gasoline-powered cars.
• EVs may be more cost-effective over their lifetimes compared to traditional cars due to lower fuel and maintenance expenses.
• Which is cheaper over the long term depends on geography and other factors.

In the long run, electric vehicles could be more cost-effective for consumers compared to gasoline-powered cars.

Experts stated that although EVs have a higher initial purchase cost, their recurring fuel and maintenance expenses are typically lower, resulting in a total lifetime cost that may be less expensive than that of a gas vehicle.

The total cost of EVs versus gasoline cars varies depending on factors such as the EV model, location, and charging habits, according to research.

As battery prices decline, experts predict that EVs will become more cost-competitive with gasoline cars, making them more accessible to consumers.

Some EV prices 'starting to break even' with gas models

In June 2024, the average consumer spent approximately $56,000 on a new electric vehicle (EV), compared to $49,000 on a gas-powered vehicle, according to Kelley Blue Book.

That financial gap is narrowing, however.

The federal government offers a tax credit of up to $7,500 to qualifying buyers of new EVs, which car makers have been cutting their prices to match. Consumers can choose to receive this tax break as an upfront discount on the car.

Tax breaks may be available from states and utilities to offset the cost of purchasing a vehicle or installing charging infrastructure.

Maxwell Woody, a researcher at the University of Michigan's Center for Sustainable Systems who co-authored a recent study on EV and gasoline car costs, stated that the expectation is that EVs will continue to get cheaper, largely driven by [lower] battery costs.

Woody stated that some smaller EVs are already breaking even in terms of gas car prices, even without incentives.

According to Chris Harto, senior transportation and energy policy analyst at Consumer Reports, most people still pay an EV premium.

What is the long-term payback on the extra cost for buyers, according to Harto?

Why EVs may win out in the long run

A Consumer Reports study from 2023 shows that owning an EV can save a typical driver between $6,000 and $12,000 over the life of the vehicle, compared to a similar gas-powered model.

"Today, the savings might be slightly improved," Harto stated.

According to the U.S. Department of Energy, EVs have fewer moving parts than cars with conventional fuel engines, which makes them less likely to require repair and maintenance.

Woody stated that refueling an EV is "significantly cheaper" due to its higher energy efficiency and lower electricity prices compared to gasoline.

Back-to-school shopping may lead some to take on debt. The provision of free school lunches could be a campaign issue. Most households can withstand a $400 financial shock.

Six popular EVs that were eligible for a federal tax credit were examined in a Consumer Reports study, according to Harto. However, tax incentives from states, municipalities, or utilities were not considered.

A 2024 J.D. Power study revealed that EVs outperformed their gas-powered counterparts in total cost over a five-year ownership period in all states except Maine and West Virginia.

According to a recent analysis published in Automotive News, EV buyers in Colorado, Illinois, Nevada, and New Jersey would save more than $8,000 over the course of the study period.

Why geography matters

The analysis by J.D. Power emphasizes that the financial benefits of an EV are highly dependent on individual circumstances, such as a driver's location.

The cost of a midsize electric SUV with a 300-mile range can vary by $52,000 or nearly 40% depending on the location, according to a study by the University of Michigan.

Woody stated that the significant differences in prices for electricity and gasoline are largely responsible for such disparities.

Woody stated that in areas with low gas prices, such as Texas, it is more challenging for an EV to achieve profitability.

Woody stated that EVs are more financially viable for individuals who charge their batteries at home, as public charging often comes with a higher cost.

Woody stated that EV owners can benefit from lower residential electricity prices during off-peak hours, such as overnight charging.

Saving money with an EV will be challenging if you don't have access to home charging, according to him.

On average, a 300-mile midsize SUV's lifetime cost can be reduced by approximately $10,000 through home charging access, according to a study by the University of Michigan.

According to a study that analyzed costs in 14 different U.S. cities, cities that are particularly friendly for EVs share several characteristics, including a low cost of electricity (or at least time-of-use pricing that includes an option with low prices), high gasoline prices, moderate climates, and direct purchase incentives.

The study found that small and low-range EVs with about 200 miles had a lower total cost of ownership than similarly sized gas vehicles across all cities, even without tax incentives.

Long-range EVs with a 300-mile range are comparable to gasoline vehicles for smaller vehicles like compact cars and midsize sedans, but the longest-range models, with about 400 miles, are not yet cost-competitive with gasoline vehicles, even with subsidies.