Electric Vehicles vs. Gas Vehicles: How Do the Costs Compare?

Last year, gas prices were surging. This year, it’s the cost of electricity spiking. Every time costs soar for one of these energy options, one can’t help but wonder if the other would’ve been the smarter, more affordable option for your choice in vehicle. When it comes to costs of operating a gas vs. an electric or hybrid vehicle, who’s actually getting the short end of the stick shift? Let’s get into it.

Are Electric Vehicles More Expensive? 

According to analysis by a Michigan-based public policy firm, Anderson Economic Group, in the first half of 2023, for most classes of vehicles, it cost more money to drive a mile on electricity than on gas. People with gas-powered, mid-sized cars and crossovers used $11.08 worth of gas to drive 100 miles, while owners of electric vehicles paid $12.62 to charge their cars to travel the same distance—if they charged at home. The cost per 100 miles for drivers using public chargers was $16.10.

Oh, So Electric Vehicles Are More Expensive? 

Not necessarily. For one thing, these figures depend on how exactly the cost is calculated. Anderson’s figures here take into account the (presumably) one-time cost to install a home charging system for an EV, along with other costs like taxes, and the projected cost of travel to gas or charging stations. Anderson’s analysis also makes assumptions about the prices of electricity for EV owners, which can vary widely. 

Furthermore, this study doesn’t take into account the cost-saving options that exist for EV owners. Many utility companies allow owners of electric vehicles to charge their cars at discounted prices overnight and other off-peak times, and some offer rebates to install home chargers. Some manufacturers even offer free charging for newly purchased EVs, as well. 

Finally, the Anderson study factors in a dollar cost of the “time burden” of charging electric vehicles. According to their calculations (based on charging times and typical hourly wages), the driver of a luxury electric vehicle paid a “time burden” of about $400 a month if they mostly charged their vehicle using commercial chargers. Those who fueled up with gasoline spent only a projected $33 worth of time waiting at the pump. While yes, it does take longer to charge a car than fill it with gas, charging overnight isn’t that inconvenient. And since most people aren’t paid to sleep, the comparison to lost hourly wages doesn’t quite hold up. 

So…Are Gas Vehicles More Expensive?

Some would argue that in the long run it’s actually costlier to own and operate a vehicle that uses gas than an electric vehicle. A 2020 study conducted by the Department of Energy calculated that electric vehicle owners save almost $15,000 in fuel costs over fifteen years of driving an electric car instead of one using gas. After all, as anyone who drives a gas vehicle will tell you, prices at the pump can really add up. 

The Truth of the Matter

So is it cheaper to own and operate a gas vehicle, or an electric vehicle? Well, the truth is…it’s complicated! Many factors contribute to the costs of both gas and electric vehicles. Electric vehicles famously have higher sticker prices than gas vehicles, but as the market grows, those price margins are expected to shrink, and sometimes tax incentives can shrink an EV’s price tag. On the flip side, you might have to shell out around $2,000 to install a charging station (however, incentives often exist for those as well).  

Obviously gas prices are a massive factor in vehicle costs. But fuel prices vary, often quite widely, from state to state. Likewise, not only does the price of electricity vary similarly, but the price of recharging a vehicle varies widely from model to model, and make to make. 

Ultimately, the best financial choice for one person in one part of the country may be extremely different from that of someone living somewhere else. 

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