Guides
UtilitiesBeginner18 min
ReviewedStandards-Based

EV vs Gas: True Total Cost of Ownership Comparison

Compare the real cost of owning an electric vehicle vs a gas car over 5-10 years. Calculate break-even point, factor in tax credits, fuel savings, and maintenance differences to make the right financial decision.

David Chen, Automotive Cost Analyst
David Chen is an automotive industry analyst with 15 years of experience in vehicle cost analysis and fleet economics. He holds an MBA from Stanford and has published research on EV adoption economics for the Electric Vehicle Association. David has helped over 500 fleet managers and consumers make data-driven vehicle purchase decisions.
Reviewed by Certified Automotive Engineers and Financial Analysts
Published: December 14, 2025
Related Calculators:Solar Panel Payback CalculatorCarbon Footprint CalculatorAC Running Cost Calculator

Table of Contents

Quick AnswerIs it cheaper to own an EV or a gas car?
For a typical sedan, an EV saves 3,000-8,000 USD over 8 years compared to an equivalent gas car. The EV costs more upfront (42,000 USD vs 32,000 USD) but the 7,500 USD federal tax credit plus lower fuel and maintenance costs offset the difference. Break-even typically occurs at year 3-5 for average drivers (12,000 miles/year).

Key Takeaways

  • 1**EVs break even in 3-5 years** for average drivers (12,000 mi/year)—the higher upfront cost is offset by 7,500 USD federal credit plus annual fuel and maintenance savings of 1,500-2,100 USD/year
  • 2**Fuel cost advantage: 50-70% lower per mile**—EVs cost 0.04-0.05 USD/mile for electricity vs 0.12-0.18 USD/mile for gas, saving 1,000-1,500 USD/year at average US mileage
  • 3**Maintenance savings: 50% lower for EVs**—no oil changes, fewer brake jobs (regenerative braking), no transmission service; EVs cost ~0.04 USD/mile vs 0.09 USD/mile for gas vehicles
  • 4**Federal tax credit: up to 7,500 USD**—available for new EVs meeting domestic manufacturing requirements; used EVs qualify for up to 4,000 USD credit starting 2024
  • 5**High mileage drivers save more**—at 20,000 miles/year, break-even drops to 2-3 years; fleet/rideshare drivers see 10,000-15,000 USD savings over 5 years
  • 6**Regional electricity rates matter**—in states with cheap power (0.10 USD/kWh) EVs save 30% more than states with expensive power (0.25+ USD/kWh)

What is Total Cost of Ownership (TCO)?

Total Cost of Ownership goes beyond the sticker price to capture every dollar you'll spend owning a vehicle. The TCO methodology follows guidelines established by the U.S. Department of Energy (DOE) and EPA fuel economy standards for accurate cost comparisons. For comparing EVs and gas cars, TCO includes:

Cost CategoryEVGas Car
Purchase priceHigher (35,000-80,000 USD typical)Lower (25,000-60,000 USD typical)
Tax creditsUp to 7,500 USD federal + stateNone
Fuel/Energy0.03-0.05 USD/mile0.10-0.18 USD/mile
Maintenance0.03-0.04 USD/mile0.08-0.10 USD/mile
Insurance10-15% higherBaseline
DepreciationSimilar after year 3Similar

The EV advantage compounds over time. While you pay more upfront, the lower daily operating costs accumulate into significant savings by year 3-5.

Break-Even Point by Annual Mileage
Higher mileage = faster payback for EVs
At 12,000 mi/year (US average), EVs break even in ~4 years. At 20,000+ mi/year, break-even drops to under 3 years.

The Break-Even Calculation

The most important question: When does the EV become cheaper overall?

Break−even(years)=(EVPrice−GasPrice−TaxCredits)AnnualSavingsBreak-even (years)=(EV Price−Gas Price−Tax Credits)Annual SavingsBreak−even(years)=AnnualSavings(EVPrice−GasPrice−TaxCredits)Break-even (years)=(EV Price−Gas Price−Tax Credits)Annual Savings\text{Break-even (years)} = \frac{(\text{EV Price} - \text{Gas Price} - \text{Tax Credits})}{\text{Annual Savings}}Break-even (years)=Annual Savings(EV Price−Gas Price−Tax Credits)

Example Calculation

Let's compare a Tesla Model 3 vs. Toyota Camry:

FactorTesla Model 3Toyota Camry
Purchase Price42,000 USD28,000 USD
Federal Tax Credit-7,500 USD0 USD
Net Purchase34,500 USD28,000 USD
Price Difference+6,500 USD—

Annual operating costs (12,000 miles):

CategoryTesla Model 3Toyota CamryEV Savings
Fuel/Energy411 USD1,400 USD989 USD
Maintenance480 USD1,080 USD600 USD
Insurance1,650 USD1,500 USD-150 USD
Annual Total2,541 USD3,980 USD1,439 USD

Fuel Cost: The Biggest Savings Category

The fuel/energy cost difference is where EVs shine brightest. Electricity is fundamentally cheaper than gasoline per mile of travel.

Cost Per Mile Comparison

EV efficiency is measured using the SAE J1634 standard for electric vehicle range testing, while gas vehicle MPG ratings follow EPA Test Procedures (40 CFR Part 600).

Gascostpermile=GaspricepergallonMPGGas cost per mile=Gas price per gallonMPGGascostpermile=MPGGaspricepergallonGas cost per mile=Gas price per gallonMPG\text{Gas cost per mile} = \frac{\text{Gas price per gallon}}{\text{MPG}}Gas cost per mile=MPGGas price per gallon
EVcostpermile=Electricityrate(perkWh)Efficiency(mi/kWh)EV cost per mile=Electricity rate (per kWh)Efficiency (mi/kWh)EVcostpermile=Efficiency(mi/kWh)Electricityrate(perkWh)EV cost per mile=Electricity rate (per kWh)Efficiency (mi/kWh)\text{EV cost per mile} = \frac{\text{Electricity rate (per kWh)}}{\text{Efficiency (mi/kWh)}}EV cost per mile=Efficiency (mi/kWh)Electricity rate (per kWh)
Vehicle TypeEfficiencyEnergy CostCost Per Mile
Gas sedan (32 MPG)32 mi/gal3.50 USD/gal0.109 USD/mi
Gas SUV (25 MPG)25 mi/gal3.50 USD/gal0.140 USD/mi
Gas truck (20 MPG)20 mi/gal3.50 USD/gal0.175 USD/mi
EV sedan4.0 mi/kWh0.14 USD/kWh0.035 USD/mi
EV SUV3.2 mi/kWh0.14 USD/kWh0.044 USD/mi
EV truck2.5 mi/kWh0.14 USD/kWh0.056 USD/mi
Cost Per Mile: Gas vs Electric
EVs cost 50-70% less per mile to fuel
Based on $3.50/gallon gas and $0.14/kWh electricity (US averages). EVs save $0.06-0.12 per mile on fuel.

Annual Fuel Savings by Mileage

Annual MilesGas Cost (30 MPG)EV Cost (3.5 mi/kWh)Annual Savings
8,000933 USD320 USD613 USD
12,0001,400 USD480 USD920 USD
15,0001,750 USD600 USD1,150 USD
20,0002,333 USD800 USD1,533 USD
25,0002,917 USD1,000 USD1,917 USD

Based on 3.50 USD/gallon gas and 0.14 USD/kWh electricity (US averages from EIA Monthly Energy Review)

Maintenance: 50% Lower for EVs

EVs have dramatically fewer moving parts than gas cars, translating directly to lower maintenance costs.

What EVs Don't Need

Maintenance ItemGas Car Cost (8 years)EV CostSavings
Oil changes (every 5,000 mi)1,200-1,600 USD0 USD1,200-1,600 USD
Transmission service300-600 USD0 USD300-600 USD
Spark plugs100-200 USD0 USD100-200 USD
Fuel system (filter, injectors)200-400 USD0 USD200-400 USD
Exhaust system0-500 USD0 USD0-500 USD
Total1,800-3,300 USD0 USD1,800-3,300 USD

Brake Savings from Regenerative Braking

EVs use regenerative braking per ISO 12405 battery testing standards, which captures energy when slowing down. EV charging equipment must meet UL 2202 and UL 2231 safety standards. This means:

  • Brake pads last 2-3x longer (150,000+ miles vs 50,000 miles)
  • Rotors last 2x longer (rarely need replacement in EV lifetime)
  • 8-year brake savings: 400-800 USD
Cumulative Maintenance Cost
EVs save ~$6,000 in maintenance over 8 years
EV maintenance: ~$0.04/mile (no oil changes, regenerative braking). Gas: ~$0.09/mile (oil, brakes, transmission).

The Federal Tax Credit Explained

The Inflation Reduction Act (2022) restructured EV tax credits through 2032. EV communications protocols follow ISO 15118 for vehicle-to-grid integration:

New Vehicle Credit (up to 7,500 USD)

RequirementCredit AmountDetails
Battery components3,750 USD% made in North America
Critical minerals3,750 USD% sourced from US/allies
Maximum total7,500 USDIf both requirements met

Eligibility requirements:

  • Vehicle assembled in North America
  • MSRP: Under 55,000 USD (sedans) or 80,000 USD (SUVs/trucks)
  • Buyer income: Under 150,000 USD (single) or 300,000 USD (married)

Used EV Credit (up to 4,000 USD)

  • Vehicles priced under 25,000 USD
  • At least 2 model years old
  • Lower income limits apply

TCO by Vehicle Class

Different vehicle classes show different break-even dynamics:

8-Year Total Cost of Ownership
EVs save $4,000-$10,000 across all vehicle classes
TCO includes purchase (after $7,500 credit), fuel, maintenance, and insurance. Based on 12,000 mi/year average driving.
Vehicle ClassEV PriceGas PricePrice GapBreak-Even
Compact35,000 USD25,000 USD2,500 USD*2-3 years
Sedan42,000 USD32,000 USD2,500 USD*3-4 years
SUV52,000 USD38,000 USD6,500 USD*4-5 years
Truck65,000 USD45,000 USD12,500 USD*6-8 years
Luxury80,000 USD60,000 USD12,500 USD*5-7 years

*After 7,500 USD federal tax credit

Best EV Value: Compact Cars

Compact EVs like the Chevrolet Bolt or Nissan Leaf offer the fastest payback. With prices under 30,000 USD (after credits), fuel savings of 800+ USD/year, and maintenance savings of 500+ USD/year, these vehicles can break even in under 2 years for average drivers.

Regional Cost Variations

Your location significantly impacts EV economics:

Electricity Rates by Region

RegionAvg Rate12,000 mi Costvs. Gas Savings
Pacific Northwest0.10 USD/kWh343 USD1,057 USD
Midwest0.12 USD/kWh411 USD989 USD
Southeast0.13 USD/kWh446 USD954 USD
National Average0.14 USD/kWh480 USD920 USD
Northeast0.18 USD/kWh617 USD783 USD
California0.25 USD/kWh857 USD543 USD
Hawaii0.35 USD/kWh1,200 USD200 USD

Gas comparison: 12,000 mi at 30 MPG at 3.50 USD/gal = 1,400 USD

Gas Price Impact

Gas PriceAnnual Gas Costvs. EV Savings
2.50 USD/gal1,000 USD520 USD
3.00 USD/gal1,200 USD720 USD
3.50 USD/gal1,400 USD920 USD
4.00 USD/gal1,600 USD1,120 USD
5.00 USD/gal2,000 USD1,520 USD

EV cost held constant at 480 USD (0.14 USD/kWh, 12,000 mi)

Environmental Impact

Beyond financial savings, EVs significantly reduce your carbon footprint. For a detailed analysis of your vehicle's environmental impact, see our carbon footprint calculator guide:

MetricEV (8 years)Gas Car (8 years)Difference
CO2 emissions19.2 tons35.6 tons-16.4 tons
Gallons of gas03,200 gal-3,200 gal
Equivalent trees——270 trees
Zero-emission miles96,000 mi0 mi+96,000 mi

Based on 12,000 mi/year, 30 MPG, and US average grid mix

Edge Cases and Special Scenarios

Cold Weather Performance

According to AAA research and Idaho National Laboratory studies, EV range decreases 10-40% in cold weather (below 20°F / -7°C):

TemperatureRange ImpactCost Impact on TCO
70°F (21°C)BaselineBaseline
40°F (4°C)-12% range+50 USD/year
20°F (-7°C)-25% range+120 USD/year
0°F (-18°C)-40% range+200 USD/year

For drivers in very cold climates (Minnesota, Michigan, etc.), add 100-200 USD annually to EV operating costs. This still typically doesn't eliminate the EV advantage but extends break-even by 6-12 months.

Battery Degradation Over Time

Most EV batteries retain 80-90% of original capacity after 100,000 miles, per NREL (National Renewable Energy Laboratory) studies. Battery warranties typically cover 8 years / 100,000 miles per CARB (California Air Resources Board) requirements:

Years OwnedTypical CapacityRange ImpactTCO Impact
Year 1-395-100%MinimalNone
Year 4-688-95%5-12% less range+50 USD/year
Year 7-1080-90%10-20% less range+100 USD/year

High Mileage Fleet Use

For rideshare, delivery, and fleet vehicles (30,000+ miles/year), EVs become dramatically more cost-effective:

Annual MileageEV Annual SavingsBreak-Even
30,000 mi2,400 USD1.5-2 years
50,000 mi4,000 USDUnder 1 year
75,000 mi6,000 USDUnder 1 year

When Gas Might Be Better

EVs aren't optimal for everyone. Consider a gas car if:

ScenarioWhy Gas May Be Better
Very low mileageUnder 6,000 mi/year—savings too small to offset price premium
No home chargingReliance on public charging erodes cost advantage
Short ownershipUnder 3 years—may not reach break-even
Rural with limited infrastructureLong trips to chargers reduce convenience
Budget under 25,000 USDLimited affordable EV options (used Bolt/Leaf are options)

Real-World 8-Year Comparison

Scenario: Average American Driver

AssumptionValue
Annual miles12,000
Ownership period8 years
Gas price3.50 USD/gallon
Electricity rate0.14 USD/kWh
EV: Sedan (34,500 USD net)3.5 mi/kWh
Gas: Sedan (28,000 USD)30 MPG

8-Year Total Cost of Ownership

CategoryEV SedanGas Sedan
Net purchase34,500 USD28,000 USD
Fuel/energy (8 yr)3,840 USD11,200 USD
Maintenance (8 yr)3,840 USD8,640 USD
Insurance (8 yr)13,200 USD12,000 USD
TOTAL TCO55,380 USD59,840 USD
EV Savings4,460 USD—

Try the Calculator

Ready to run the numbers for your specific situation? Our interactive calculator accounts for:

  • Your actual vehicle choices and prices
  • Local electricity rates and gas prices
  • Annual mileage and ownership period
  • Federal and state tax credits
  • Financing options (loan vs. cash)
EV vs Gas TCO Calculator

Calculate your personal break-even point and lifetime savings

Open Calculator

Frequently Asked Questions

Frequently Asked Questions

EV vs Gas Cost Comparison | Enginist