After Russia’s invasion of Ukraine helped spur record-high gas prices at U.S. pumps, many have debated whether owning an electric car instead of a gasoline one could be a wise investment. In short, electric vehicles do tend to cost less in the long term than some of the most popular gasoline cars in the U.S., according to a February analysis by Atlas Public Policy. “You can’t really get out a calculator and do this at home,” Tom Taylor, policy analyst at Atlas Public Policy, told McClatchy News. “It’s really difficult.”
And indeed, it is. There are many studies and articles online comparing the costs of electric vehicles versus gas ones. But, Taylor warns, customers need to closely read these studies to truly understand what these numbers mean.
Comparing the costs According to the Atlas Public Policy analysis, while the initial purchase price for electric vehicles tends to be higher than for gas ones, other expenses such as fuel, maintenance, insurance and taxes bring the total ownership cost for electric vehicles down in the long term, ending up cheaper than many gasoline alternatives. The analysis compared costs of some of the most popular vehicles in the U.S. and their electric alternatives. Two “low-cost” sedans were compared in the study: a 2022 Toyota Corolla – a gas vehicle – and a 2022 Chevrolet Bolt – electric. The Toyota selling price starts at about $20,000, while the Chevrolet sells for about $30,000.
But the upfront costs are only one part of the equation. After running calculations based on eight years of driving the electric-powered Bolt and gas-powered Corolla, the total cost of owning the Chevrolet Bolt would reach $47,325. In comparison, the total cost of owning the Toyota Corolla would reach $50,350. “You can see that particularly maintenance and fueling of the vehicle are really significant cost savers for electric vehicles,” Taylor said. “So electric vehicle owners save a lot of money from those two elements in particular compared with their gasoline equivalent.” The average yearly cost to run a gas vehicle in the U.S. in 2022 is estimated to be $4,336 – compared to $3,679 for an electric vehicle, according to Self, a financial technology company. The Self study considered factors including “fuel, energy, mileage, insurance, EV incentives, taxes, registration fees, maintenance, emissions tests.”
Costs vary state by state The cost of running an electric car versus a gas one varies state by state. For example, in Massachusetts, fueling up in 2022 is on average predicted to be $609.86 cheaper for electric vehicles than gas ones – about a $50 monthly difference. But in Nevada, that difference goes up to $1,220.16 in savings for electric car owners compared to gas ones – about $100 difference each month, according to Self. In California, electric car owners are projected to save about $1,198 for fuel on average, according to Self, while those in Washington can expect to save about $1,178.
Savings are most noticeable for those who charge their electric vehicle at home. Charging is much cheaper than gasoline – “a dollar or two each day,” according to the Wall Street Journal. But if you go on a road trip, that’s when costs can add up and flip the answer. The Wall Street Journal reported that in most U.S. cities, stopping at fast-charging electric stations can actually be more expensive than stopping at regular gasoline stations. ‘Total cost of ownership’ While electric cars seem to overall be cheaper to own than gasoline ones over time, now might not be the best time to buy them, Michelle Krebs, executive analyst for Autotrader, told NJ Advance Media. “EVs are great if you can get them (and can afford them),” Morgan Stanley analyst Adam Jonas said, according to CNBC.
Krebs said that supply chain issues caused by the war in Ukraine have been impacting gasoline and electric vehicles alike and prices are going up. Tesla raised prices of its electric cars in the U.S. and China for the second time since March 9. “Even for people who want to switch to electric, they have nowhere to go,” Jessica Caldwell, executive director of insights at Edmunds.com, told CNBC. “Anything you’re looking to buy, you’re on a waitlist … or even if you’re looking to downsize your purchase, you’re paying top dollar. It just doesn’t make sense to make a move right now.” Still, prices at the pump are encouraging many in the U.S. to consider the electric alternative. “People could potentially save a fair bit of money from the electric equivalent compared with the gasoline vehicle and that’s including the total cost of ownership,” Taylor said.
Based in New York, Stephen Freeman is a Senior Editor at Trending Insurance News. Previously he has worked for Forbes and The Huffington Post. Steven is a graduate of Risk Management at the University of New York.