Environment Transportation Cost of Electric Cars: Affordable Electric Cars and How EVs Can Save You Money How does the cost of an EV compare to that of a gas-powered car? By David M. Kuchta David M. Kuchta Writer Wesleyan University, University of California, Berkeley David Kuchta, Ph.D. has 10 years of experience in gardening and has read widely in environmental history and the energy transition. An environmental activist since the 1970s, he is also a historian, author, gardener, and educator. Learn about our editorial process Updated September 10, 2021 Fact checked by Elizabeth MacLennan Fact checked by Elizabeth MacLennan University of Tennessee Elizabeth MacLennan is a fact checker and expert on climate change. Learn about our fact checking process Share Twitter Pinterest Email SimonSkafar / Getty Images Transportation Automotive Active Aviation Public Transportation In This Article Expand Making Electric Vehicles More Affordable Fueling Costs Electric Vehicle Maintenance Costs Comparing EV Costs With Gas-Powered Cars Frequently Asked Questions Electric cars (EVs) tend to be more expensive than comparable gas-powered cars. However, the sticker price doesn't account for tax credits, rebates, and the lower cost of fuel and maintenance. Over the lifetime of a vehicle, EVs can compete with and even be less expensive than comparable gas-powered vehicles. Making Electric Vehicles More Affordable Rebates and tax credits can significantly reduce the purchase price of an electric vehicle. The current federal electric vehicle tax credit is $7,500 on electric vehicles. However, the credit no longer applies to EVs from General Motors and Tesla since they've sold too many vehicles. Proposed legislation would boost the tax credit amounts for model years 2022 and extend it to all EVs. After the federal tax credit, the median base purchase price of an electric vehicle in 2021 is $47,485. Some U.S. states offer additional tax credits, which lower the cost of electric vehicles. Fueling Costs Nicholas77/Getty Images There's no denying that the outright cost of an electric vehicle can be high, even with rebates. But driving and fueling costs can influence the true price of the vehicle. Electric vehicle charging costs depend on where you live and where you charge your car. Four-fifths of EV charging is done at home, so local electric utility rates determine fuel costs most of the time. Over the course of a year, the average American travels almost 40 miles per day. This makes the average annual fuel cost for a 2021-model EV only $667.50. Electric vehicles can be charged simply from a standard 120-volt household outlet, just like charging a phone. However, many electric vehicle owners who can charge at home choose to install a higher-speed Level 2 charging station, which runs on 240 volts, the kind that a clothes dryer plugs into. Level 2 charging stations can cost anywhere from $300 to $700 to purchase, plus installation (and potentially permitting) costs. These can add another $1,000 or more to the total cost. Fortunately, federal, state, and utility credits can apply to the installation of EV charging stations. Like home charging, rates for public charging depend on local electricity rates, but they also depend on the charging speed. Level 2 charging at a public charging station can cost roughly 50% more than local utility rates. High-speed charging usually costs more, from $0.13 at Tesla's Superchargers to $0.99 at Electrify America's direct current (DC) Fast Charge stations. Some charging stations offer monthly subscription plans, which can range from $4.00 to $8.00/month, with reduced-rate charging ranging from $0.30 to $0.35 per minute. Electric Vehicle Maintenance Costs Electric vehicles have many fewer parts than gas-powered vehicles. This means that EVs require less maintenance. Consumer Reports estimates that, on average, maintenance on an electric vehicle costs roughly $0.03 per mile. The average car is driven 11,467 miles per year, putting the average annual maintenance cost of an EV at $344.01, or $1,720.05 over a five-year period. Battery replacement costs may or may not be a consideration. The battery is the most expensive part of an EV: excluding labor, replacing the battery in a Nissan Leaf can cost up to $5,500, while a new Tesla battery can cost $13,500. Yet the battery itself is likely to outlive the useful life of the vehicle. Comparing EV Costs With Gas-Powered Cars RUNSTUDIO / Getty Images How do these costs stack up against those of an internal combustion engine vehicle? By the fifth year of ownership, savings can be in the thousands of dollars. And the savings continue to increase over time. Consumer Reports, AAA, and the U.S. Department of Transportation calculate total ownership costs based on a five-year/75,000-mile ownership period—an industry standard. Given the higher upfront costs of an electric vehicle, it takes longer than three years to reach the price parity point with a comparable gas-powered car. A five- to seven-year-old used EV saved owners two to three times more in fuel costs than the owner of a new EV owner saved compared to a comparable, new gas-powered vehicle. Over the entire life of a vehicle, Consumer Reports concluded that electric vehicle owners could save between $6,000 to $10,000. A vehicle is usually a long-term investment. Thinking long and hard means doing a bit of math and having a bit of patience. In the long run, an EV will save you money. But the savings to the environment are priceless. Frequently Asked Questions What's the average cost of an electric vehicle? In 2021, Kelley Blue Book listed the average outright price of an electric vehicle as $56,437, which is about $10,000 higher than the overall industry average. The federal electric vehicle tax credit of $7,500 should also be considered. How much money can you save by driving an EV? A 2018 study by Michigan's Transportation Research Institute found that the average cost of operating an electric vehicle in the U.S. was $632 less per year than operating a gas-powered vehicle ($485 versus $1,117). It's said that savings can be in the thousands by the fifth year of ownership. Will the price of EVs go down? Electric vehicles are becoming cheaper as production of and demand for them ramps up. Industry experts anticipate price parity between EVs and gas-powered cars by 2025. Some say EVs will even be cheaper to produce than their fuel-guzzling counterparts by 2027. What can EV owners do to save money? EV owners can save money by charging at home rather than at public charging stations and limiting charge times to off-peak electricity hours when energy is the cheapest. They can also conserve battery power by sticking to urban streets as opposed to driving on high-speed roads. View Article Sources "Federal Tax Credits for New All-Electric and Plug-In Hybrid Vehicles." U.S. Department of Energy. O'Dell, John. "A Bigger Tax Credit For Going Electric: What It Could Mean For Consumers." Forbes Wheels, Published Jun 29, 2021. "Electric Vehicle Charging 101." Natural Resources Defense Council. "National Household Travel Survey Daily Travel Quick Facts." Bureau of Transportation Statistics. Harto, Chris. "Electric Vehicle Ownership Costs: Today's Electric Vehicles Offer Big Savings for Consumers." Consumer Reports. "Average Annual Vehicle Miles Traveled by Major Vehicle Category." U.S. Department of Energy. Perry, Tristan. "Nissan Leaf Battery Replacement and Upgrades: Full Guide." Green Car Future, Dec 24, 2020. "Eight Straight: New-Vehicle Prices Mark Another Record High in November 2021, According to Kelley Blue Book." Kelley Blue Book. 2021. "Relative Costs of Driving Electric and Gasoline Vehicles in the Individual U.S. States." University of Michigan Transportation Research Institute. 2018.