Are EVs More Cost-Effective than Gas Vehicles?

What this blog covers:

  • A long-term cost comparison between an EV and gas SUV
  • An explanation of how EVs benefit the environment
  • A breakdown of how much a hybrid could save you
  • A quick guide on which type of vehicle to purchase

Will you save money if you buy an electric vehicle?

With gas prices rising by roughly 30%–40% over the last 12 months, you may be reconsidering your vehicle or commuting options. One of the first questions that often comes to mind is whether you should switch to an all-electric or hybrid vehicle. While they will certainly save you money in the long run, they are more expensive to purchase upfront and it might not make long term financial sense if the purpose is to merely mitigate the cost of fuel.

What are the upfront costs of an EV?

A new EV typically costs $3,000–$15,000 more than a gas car to purchase. Additionally, if you don’t have a charger installed at home, you should budget approximately $800-$5000, depending on how complicated the process is. Once you have the EV and charging set up, you can expect to save on maintenance costs and fuel. Depending on the battery size, an EV costs between $9 and $25 to charge, with the average car costing $50-$110 to fill up with gas, roughly about 3-4 times the cost. While this might seem like a no-brainer, it could still take several years to make back the initial investment. Consider this table for instance:

Cost comparison between Gas and EV SUV

Are EVs better for the environment?

Of course, there is more than just fuel savings when it comes to EVs. Many people opt for an electric vehicle because they want to minimize their carbon footprint, so let’s unpack what this actually looks like.

EVs have overall lower lifetime greenhouse gas emissions because they produce no tailpipe emissions. The electricity used to charge them may come from a mix of energy sources, but in most regions, an EV's total lifetime carbon emissions are lower than those of a comparable gasoline vehicle. Even after accounting for battery manufacturing, many studies find that EVs produce substantially less greenhouse gas emissions over their lifetime because unlike gas vehicles, they don't emit carbon monoxide, nitrogen oxides, and unburned hydrocarbons. This can improve air quality in cities and reduce health impacts from vehicle exhaust. Also, EVs are more efficient at turning energy into motion whereas gasoline engines typically convert only a fraction of the fuel's energy into motion, with much of the energy lost as heat.

Are there any environmental drawbacks of EVs?

The main environmental concern with EVs is the battery production and disposal. Mining and processing materials such as lithium, nickel, graphite, and other battery components have environmental impacts, including:

  • Energy use
  • Water consumption
  • Habitat disturbance
  • Pollution risks, if not managed responsibly
     

Additionally, an EV charged primarily from coal-generated electricity has a smaller environmental advantage than one charged from cleaner sources such as natural gas, nuclear, hydro, solar, or wind. There is also some concern over how to dispose of lithium batteries because they are difficult to fully recycle and they have been known to be a fire hazard. Battery recycling is improving, but the industry is still growing. Proper collection and recycling are important to recover valuable materials and reduce waste.

Are hybrids a good alternative?

In many cases, a hybrid vehicle might be a good place to start if you want to lower the cost of your initial investment, would like the option of fueling up for road trips and don’t have a charger set up at home. A hybrid is typically an additional $1500-$3000 more than a gas vehicle, with an approximate gas savings of $667 per year. A typical hybrid can achieve roughly 35–55 mpg, which cuts fuel costs substantially compared with a conventional gasoline vehicle. This means you would recoup the cost in less time (around 3.5 years). With the average lease being three years, this option might make more sense for those who lease or aren’t fully committed to switching completely to an all electric vehicle.

Use this guide to decide which vehicle works for you:

Buy an EV if:

  • You can charge at home or at work
  • Most of your driving is local commuting
  • You drive a lot of miles each year
  • You're comfortable planning charging on longer trips
  • You’re planning on keeping it for more than 5 years 

 
Buy a hybrid if:

  • You can't reliably charge at home
  • You frequently take long road trips
  • You want a lower purchase price
  • You want better fuel economy than a gas car without changing your refueling habits
  • You’re leasing and not sure if you’ll purchase it afterwards
     

Do plugin hybrids cost as much?

A plug-in hybrid can be an excellent middle ground, but the fuel savings depend heavily on actually plugging it in. Plug-in hybrids also cost significantly more than a gas car so you would be looking at a bigger upfront investment and an approximate 5-year commitment to recoup the costs. The advantage is that you don’t need to install a new charger at home and can also switch to gas when needed.

Consider a plug-in hybrid (PHEV) if:

  • Your daily driving is under about 20–50 miles
  • You can charge regularly
  • You want electric driving for commuting but gasoline backup for trips
     

The final assessment

If you’re not sure about making the switch and the math doesn’t make sense entirely just to save on gas, then consider a hybrid. Additionally, the Energy Information Administration (EIA) has projected that gasoline prices should ease as additional global oil supply comes online and oil markets rebalance, which may eliminate the urgency to switch altogether. If your goal is to reduce your carbon footprint however, an EV or plug-in hybrid would be a good long-term investment.

*The content of this article is intended for informational and educational purposes only. It reflects the author’s research and opinion based on publicly available sources and industry reporting. Brand names, tire “tiers,” and performance characteristics are presented as general observations and may vary by specific product, model, region, or seller. Readers should independently verify all information before purchasing tires or making business decisions. The author and publisher are not responsible for any damage, loss, or liability arising from the use of the information provided.*

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