Owning an EV Is 40% Cheaper Than ICE Vehicles, Study Finds

The study looks at purchase price, depreciation, fuel, insurance, taxes, maintenance, and repair.

Electric car being charged
Photography taken by Mario Gutiérrez. / Getty Images

One of the biggest hurdles for electric vehicle (EV) buyers to overcome is the cost premium that EVs have over gas-powered vehicles. While the initial investment may be a bit more, a new study from the U.S. Department of Energy’s Argonne National Laboratory finds the cost to drive and maintain an EV is actually lower than an internal combustion engine (ICE) vehicle.

“There has been a lot of past research on the cost of vehicles and the cost of fuel, but these other operating costs haven’t been studied in quite the same detail before,” said David Gohlke, energy and environmental analyst at Argonne and co-author of the study, in a statement. ​“There were gaps in the data, especially with respect to alternative fuel powertrains — electric vehicles, fuel cell vehicles. They are newer to the road, so it was hard to know, for instance, their historic needs for maintenance over their operational life. Our analysis helped fill those data gaps.” 

The study—titled “Comprehensive Total Cost of Ownership Quantification for Vehicles with Different Size Classes and Powertrains"—took into account several costs, including the total purchase cost, depreciation, financing, fuel costs, insurance, maintenance, taxes, and repairs. It looked at light-duty passenger vehicles, like SUVs, sedans, and pickup trucks, in addition to medium and heavy-duty commercial vehicles.

"While vehicle and fuel costs are two of the largest factors in the TCO for many vehicles, examining solely these two components does not fully capture the differences in total costs between powertrain types," write the study authors. "Initial vehicle retail price is the largest cost in early years, but over a longer analysis window of 15 years, recurring costs such as maintenance, repair, insurance, registration fees, and others become increasingly important."

There are several different types of electrified vehicles on the market, so the team compared the 2013-2019 model year hybrid, plug-in hybrid, fuel cell, and battery electric vehicles to internal combustion engine vehicles.

The study found maintenance costs of battery electric vehicles (fully electric), like the Chevy Bolt and Nissan Leaf, are 40% lower than ICE vehicles. Why are EVs cheaper to maintain? Well for starters, there are fewer moving parts under the hood and you don't have to get an oil change or tune-up as you do with an internal combustion vehicle.

The study also found that hybrid electric vehicles, like the Toyota Prius, have the lowest-cost powertrain. "We found that average repair costs, as a percentage of MSRP, were lower for HEVs, PHEVs, and BEVs than for ICEVs, ranging from 11% to 33% lower," write the authors.

While the current purchase price for battery electric vehicles is higher than comparable internal combustion engine vehicles, it's expected that battery electric vehicles will reach cost parity by 2030. The costs for hydrogen-powered fuel-cell vehicles are also expected to drop when the price of hydrogen is reduced.

The good news for EV buyers is if you factor in the total cost of ownership and not just the initial purchase price, you will save money at the end of the day. The purchase price for EVs is expected to drop in the next few years as battery cost prices are reduced and the technology improves. Several automakers have already announced plans to switch to fully electric lineups by the end of this decade, so buyers won't have to pay more out of their pocket.

“There is uncertainty with how quickly these costs will drop,” Gohlke said, ​“but the technology is trending in the right direction.” 

Now we just need the charging infrastructure to ramp up as well and then there will be even fewer reasons for car buyers to not make the switch to a zero-emissions vehicle.

View Article Sources
  1. Burnham, Andrew, et al. "Comprehensive Total Cost of Ownership Quantification for Vehicles with Different Size Classes and Powertrains." U.S. Department of Energy’s Argonne National Laboratory, 2021, doi:10.2172/1780970