EV vs Gas Car: Total Cost of Ownership Breakdown (2023)

Published: 2023-05-01

Updated: 2023-06-15

10 min read

Automotive Financial Analyst

Buying a car isn't just about the sticker price — it's about what you'll actually spend over the entire ownership period. While electric vehicles often have higher upfront costs, the savings over time can be substantial. In this comprehensive guide, we break down the true total cost of ownership for electric and gas cars to help you make an informed decision.

What Does Total Cost of Ownership Include?

Total cost of ownership (TCO) goes far beyond the purchase price to include every expense associated with a vehicle over its lifetime:

Purchase price or lease payments (minus incentives)
Fuel or charging costs over the ownership period
Maintenance and repairs
Insurance premiums
Registration and taxes
Financing costs
Depreciation (lost value over time)

While EVs typically cost more upfront, they often make up the difference through significantly lower operating costs over time.

EV vs Gas: The Cost Breakdown

Purchase Price & Incentives

Electric vehicles generally have higher sticker prices than comparable gas models, but federal tax credits (up to $7,500), state incentives, and utility rebates can substantially reduce this gap. Many manufacturers are also introducing more affordable EV models as technology advances and production scales up.

Fuel vs Electricity Costs

This is where EVs shine. Charging an electric vehicle costs significantly less than fueling a gas car:

Average cost to drive an EV: $0.03-0.06 per mile
Average cost to drive a gas car: $0.10-0.15 per mile

For a driver covering 12,000 miles annually, this difference can mean saving $840-$1,440 every year on fuel costs alone.

Maintenance & Repairs

EVs have far fewer moving parts than internal combustion engines. They don't need oil changes, timing belts, fuel filters, or spark plug replacements. This typically results in 30-50% lower maintenance costs over the vehicle's lifetime. Learn more in our detailed analysis: EV Maintenance Savings.

Insurance & Registration

Insurance for EVs can be slightly higher due to more expensive replacement parts and specialized repair needs. However, this gap is narrowing as EVs become more common. Some states also offer reduced registration fees for electric vehicles.

Depreciation

Historically, EVs depreciated faster than gas vehicles, but this trend is changing as the technology matures and battery longevity concerns diminish. Many electric vehicles now hold their value comparably to gas counterparts, particularly those from established manufacturers with strong track records.

Real-World TCO Comparison

Based on our latest cost analysis, a typical EV owner can save $6,000-$10,000 over a 5-year ownership period compared to a similar gas vehicle. The exact amount depends on:

Your annual mileage (higher mileage favors EVs even more)
Local electricity and gas prices
Available incentives in your region
The specific models being compared

For the most accurate comparison tailored to your situation, use our EV vs Gas Cost Comparison Calculator.

The Long-Term Financial Picture

Looking beyond the 5-year mark, EVs offer additional financial advantages:

Modern EV batteries are designed to last 10-15 years or more
Lower maintenance costs continue to accumulate over time
As gas prices rise while electricity costs remain more stable, the savings gap widens
Potential income from bidirectional charging (V2G) technology in the future

For a detailed projection of potential 5-year savings, check our analysis in How Much Can You Save With an EV: 5-Year Projection.

Tools to Calculate Your Personal TCO

To get a personalized total cost of ownership analysis, we offer several calculators:

EV vs Gas Cost Comparison Calculator: Compare overall costs between specific models
Total Cost of Ownership Calculator: Detailed breakdown of all ownership costs
Charging Cost Calculator: Calculate your specific electricity costs

Frequently Asked Questions

Are electric vehicles cheaper to own than gas cars?

Yes, in most cases, electric vehicles are cheaper to own over a 5+ year period when considering all costs. While the initial purchase price is typically higher, the combined savings from lower fuel costs, reduced maintenance expenses, and available incentives usually outweigh this difference within 3-5 years of ownership.

How do I calculate my personal EV cost of ownership?

The most accurate way is to use our EV vs Gas Cost Comparison Calculator, where you can input your specific driving habits, local electricity rates, gas prices, and vehicle preferences to get a personalized TCO analysis.

What about EV battery replacement costs?

Most modern EV batteries are designed to last 10-15 years or more, often outlasting the vehicle itself. Most manufacturers offer 8-10 year battery warranties. Battery replacement costs have also declined significantly, but it's rarely needed within the typical ownership period of 5-7 years.

Do EVs actually save on maintenance?

Yes, substantially. EVs eliminate many maintenance items required for gas cars: oil changes, transmission service, timing belts, spark plugs, fuel filters, and exhaust system repairs. The regenerative braking system also reduces brake wear. Studies show 30-50% maintenance savings over the lifetime of the vehicle.

How do federal tax credits affect the total cost?

Federal tax credits can reduce an EV's effective purchase price by up to $7,500, significantly improving the TCO calculation. The exact amount depends on the vehicle model and your tax situation. State and local incentives can provide additional savings.

Conclusion

When considering the total cost of ownership, electric vehicles often provide significant financial advantages over gas-powered cars, particularly for those who plan to keep their vehicle for 5+ years. While the upfront investment may be higher, the combined savings from lower fuel costs, reduced maintenance, potential tax incentives, and improving resale values make EVs an increasingly cost-effective choice for many drivers.

To understand how an EV might benefit both your wallet and the planet, try our EV Total Cost of Ownership Calculator to see the complete picture of ownership benefits. Making informed transportation choices today helps create a more sustainable future for everyone.