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Last updated: March 11, 2023

Gas vs. Electric Vehicles: Which Costs Less to Own?

Electric vehicles cost over a third more to purchase than gas-powered vehicles. But what about other driving costs?

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The cost of car ownership is more than just the sticker price of the car itself. To find the true cost, you have to take into account factors like fuel, maintenance, insurance, depreciation and tax credits. When you take all of these expenses into account, electric vehicles (EVs) — priced on average at 35 percent more than gas-powered vehicles — can be cheaper to drive, especially if you qualify for the federal rebate. Let’s look closer.

Gas vs. Electric Vehicle Costs

While EVs may cost more upfront, they are cheaper to own on a yearly basis due to their reduced fuel and maintenance costs and tax rebates for those who qualify, according to 2022 data from AAA.1

Overall, the AAA study found that the cheapest car to drive is a small, gas-powered sedan, followed by an electric vehicle. Meanwhile, the most expensive car to drive is a 1/2-ton crew cab pickup and a medium SUV, vehicles both known as gas guzzlers.

Vehicle type Cost with 10,000 annual mileage Cost with 15,000 annual mileage Cost with 20,000 annual mileage Average
Small sedan $6,029 $8,184 $10,427 $8,213
Electric vehicle $6,721 $9,048 $11,516 $9,095
Subcompact SUV $6,827 $9,246 $11,755 $9,276
Compact SUV (FWD) $6,675 $9,325 $12,096 $9,365
Hybrid vehicle $7,205 $9,691 $12,301 $9,732
Medium sedan $7,895 $10,351 $12,908 $10,385
Midsize pickup $6,980 $10,537 $14,257 $10,591
Medium SUV (4WD) $7,992 $11,305 $14,763 $11,353
1/2-ton crew cab pickup $8,966 $12,932 $17,108 $13,002
2022 weighted average $7,630 $10,729 $13,974 $10,778

Purchase Price

There’s no doubt that electric vehicles currently cost more to purchase than gas-powered cars, with an average price of $65,291 compared to $48,094, according to Kelley Blue Book (KBB).2 However, KBB reports that the price gap will close as nonluxury car manufacturers, such as GM, Ford and Hyundai begin to make and sell EVs as opposed to just luxury manufacturers like Tesla.

But don’t suffer from sticker shock. Overall, EVs may be cheaper to drive when you take into account tax rebates, fuel savings and more.


Electric and hybrid vehicles have the lowest fuel costs. Compared to rising gas prices, electricity costs are generally lower.

Vehicle type Cost of fuel per mile
Electric vehicle 4.04 cents
Hybrid vehicle 10.95 cents
Small sedan 12.51 cents
Compact SUV (FWD) 14.25 cents
Medium sedan 14.37 cents
Subcompact SUV 15.2 cents
Medium SUV (4WD) 18.89 cents
Midsize pickup 21.51 cents
1/2-ton crew cab pickup 24.63 cents
2022 weighted average 17.99 cents


Electric vehicles are also the least expensive to maintain, with no engine and mechanical breakdowns to worry about.

Vehicle type Cost of maintenance per mile
Electric vehicle 7.94 cents
Small sedan 8.87 cents
Hybrid vehicle 8.88 cents
1/2-ton crew cab pickup 9.33 cents
Subcompact SUV 9.84 cents
Compact SUV (FWD) 10.13 cents
Midsize pickup 10.13 cents
Medium SUV (4WD) 10.2 cents
Medium sedan 10.64 cents
2022 weighted average 9.68 cents


However, one area where electric vehicles rack up higher fees is with the cost of car insurance. Because EVs have higher purchase prices than gas-powered vehicles, they are generally more expensive to repair and, thus, more expensive to insure. However, the difference is pretty minimal — insuring an EV is only about $100 more than the lowest-cost vehicle type to insure, a compact SUV with front-wheel drive.

Vehicle type Annual cost of full-coverage insurance
Compact SUV (FWD) $1,515
Subcompact SUV $1,527
Medium SUV (4WD) $1,529
Midsize pickup $1,537
Small sedan $1,618
Hybrid vehicle $1,619
Electric vehicle $1,619
1/2-ton crew cab pickup $1,630
Medium sedan $1,694
2022 weighted average $1,588


Because of their high repair costs following accidents, many new Tesla Model Ys are showing up in junkyards as they’re cheaper to replace rather than repair.


Another disadvantage of EVs is that they depreciate more, which makes sense when you consider their higher prices to begin with. For the least amount of depreciation, buy a small sedan, which loses only $1,086 of its value with an annual mileage of 10,000.

Vehicle type Depreciation with 10,000 annual mileage Depreciation with 15,000 annual mileage Depreciation with 20,000 annual mileage Average depreciation
Small sedan -$1,086 $2,528 +$1,174 $1,851
Midsize pickup -$1,976 $2,884 +$2,138 $2,511
Subcompact SUV -$1,167 $2,996 +$1,258 $2,127
Compact SUV (FWD) -$1,431 $3,084 +$1,552 $2,318
Medium sedan -$1,205 $3,703 +$1,306 $2,505
Hybrid vehicle -$1,495 $3,831 +$1,618 $2,725
Medium SUV (4WD) -$1,858 $4,030 +$2,003 $3,017
1/2-ton crew cab pickup -$2,267 $4,378 +$2,479 $3,429
Electric vehicle -$1,728 $5,044 +$1,869 $3,457
2022 weighted average -$1,715 $3,656 +$1,862 $2,759

Tax Credits

Electric vehicles are the only type of vehicle that will save you money on your tax return in the form of federal rebates. EV owners save, on average, $119 per year on their taxes, licenses and registrations.

Vehicle type Annual cost of license, registration and taxes
Electric vehicle -$119
Small sedan $440
Subcompact SUV $507
Compact SUV (FWD) $553
Medium sedan $622
Hybrid vehicle $657
Midsize pickup $714
Medium SUV (4WD) $717
1/2-ton crew cab pickup $934
2022 weighted average $675

However, not every EV owner qualifies for this rebate. To be eligible, you must purchase:

  • A plug-in electric vehicle or fuel cell vehicle
  • Have purchased your vehicle new before Jan. 1, 2023
  • A battery capacity of at least 7 kilowatt hours

Here is a list of electric vehicles that qualify for a rebate of up to $7,500, according to the United States Department of Energy.

Along with the vehicle qualifications, there are restrictions on the owner and usage of the vehicle that affect rebate eligibility:3,/sup>

  • You must use the vehicle, not resell it.
  • You must use the vehicle in the U.S. primarily.
  • Your income cannot exceed:
    • Married couples filing jointly: $200,000
    • Heads of households: $225,000
    • All other filers: $150,0004

Note that this is not an exhaustive list of qualifications. Check the IRS website to see if you qualify.

Hybrid vs. Electric Vehicle Costs

Hybrid vehicles, otherwise known as HEVs or plug-in hybrid electric vehicles (PHEVs), use a combination of electricity and gas, so it’s no surprise that they are, on average, more expensive than electric vehicles in terms of fuel, maintenance, taxes and finance charges.

Costs Hybrid vehicle Electric vehicle
Fuel (cents per mile) 10.95 4.04
Maintenance (cents per mile) 8.88 7.94
Total cost in cents per mile 19.83 11.98
Full-coverage insurance $1,619 $1,619
License, registration, taxes $657 -$119
Finance charges $609 $707
Cost per year $6,717 $7,251
Cost per day $18.40 $19.87
Operating cost (10,000 miles per year) $1,983 $1,198
Ownership cost (10,000 miles per year) $6,717 $7,251
Depreciation (10,000 miles per year) -$1,495 -$1,728
Total cost per year (10,000 miles per year) $7,205 $6,721
Total cost per day (10,000 miles per year) $19.74 $18.41
Total cost per mile (10,000 miles per year) $0.72 $0.67
Operating cost (15,000 miles per year) $2,974 $1,797
Ownership cost (15,000 miles per year) $6,717 $7,251
Depreciation (15,00 miles per year) $3,831 $5,044
Total cost per year (15,000 miles per year) $9,691 $9,048
Total cost per day (15,000 miles per year) $26.55 $24.79
Total cost per mile (15,000 miles per year) $0.65 $0.60
Operating cost (20,000 miles per year) $3,966 $2,396
Ownership cost (20,000 miles per year) $6,717 $7,251
Depreciation (20,000 miles per year) +$1,618 +$1,869
Total cost per year (20,000 miles per year) $12,301 $11,516
Total cost per day (20,000 miles per year) $33.70 $31.55
Total cost per mile (20,000 miles per year) $0.62 $0.58

However, hybrids have the distinct advantage of being able to depend on gas if you’re driving through an area that lacks public charging points, which is a barrier for many people considering EV purchases.

How to Calculate the Cost of Owning a Vehicle

You can use this calculator from AAA to determine the cost of vehicle ownership based on your car model and usage:

Should You Buy an Electric Vehicle or a Gas Vehicle?

So, which vehicle type is right for you? Let’s break it down.

Buy an electric car if:

  • You can qualify for federal tax credits.
  • You live in an area with a lot of EV charging stations or charging at home is a possibility
  • You drive in your home area primarily or have another gas-powered vehicle for long-distance drives.
  • You are okay with higher car insurance costs of about 15 percent.


As of September 2021, the state of California had the highest number of EV charging stations at about 34,000.5

Buy by a gas car if:

  • Your area lacks public charging stations and you can’t build one at home.
  • You don’t qualify for the federal tax credits.
  • You want lower auto insurance costs.
  • You want to take long-distance road trips.
  • You want to pay less for your car initially.


There’s no doubt that electric vehicles are here to stay, especially as their purchase prices decrease and the number of publicly available charging stations increases. However, for most people, they are simply too expensive to purchase right now, even with their reduced driving costs, particularly if you don’t qualify for the federal rebate.

Frequently Asked Questions

Is a Tesla cheaper than gas?

In terms of fuel costs, a Tesla is cheaper than gas as electricity is cheaper than gas fuel. However, in terms of purchase price, Teslas are more expensive than gas-powered cars on average.

Are Tesla charging stations free?

Tesla charging stations are not free in most cases. However, you might have 10,000 free Supercharging miles available if you participated in a referral program and had your new Tesla delivered from Dec. 15, 2022, to Dec. 31, 2022. These miles expire two years from your delivery date.

How much does it cost to fill up a Tesla?

On average, it costs about $14 to charge a Tesla, although it could range from $10 to $18, according to EnergySage.

Do electric cars have air conditioning?

Yes, electric cars have air conditioning just like gas-powered vehicles. But keep in mind that the AC is battery-powered, so it might affect the EV’s range.


  1. Your Driving Costs. AAA. (2023).

  2. Electric Car FAQ: Your Questions Answered. Kelley Blue Book. (2022, Oct 31).

  3. Tax Incentives. U.S. Department of Energy. (2023).

  4. Credits for New Clean Vehicles Purchased in 2023 or After. IRS. (2023).

  5. Charging Stations By State. Evadoption. (2021, Sep 21).