Electric Vehicles vs. Gas Cars: Total Cost of Car Ownership

Table of Contents How much is an electric car?Electric vehicles vs. gas cars: What’s cheaper

President Joe Biden just announced that by 2030 he wants at least 50% of the cars sold in the U.S. to be electric vehicles.

Right now, relatively few of the cars on U.S. roads are electric. They make up only about 3% of new car sales, and Tesla accounts for 55% of those transactions.

Why haven’t more people switched from gas-powered cars to EVs? Would-be buyers often cite concerns about running out of power and not having access to a car-charging station. Higher initial upfront costs for electric cars cause people to pause as well (many of those new Teslas cost over $70,000).

But the initial vehicle price is only one part of the equation. How much does it cost to own an electric car in the long run, and how does that compare to traditional gas-powered vehicle ownership? Could the push by President Biden actually wind up saving money for consumers?

Though the issue is complicated, the truth is that it’s often cheaper to own an electric car for the long haul. Whether you’ll save money buying an electric car can vary widely, based on what model you’re purchasing, how much gas (and electricity) costs where you live, the availability of tax credits (worth up to $7,500) at the time you’re buying, and the price of auto insurance for your vehicle, among other factors.

How much is an electric car?

According to Kelley Blue Book, the average transaction price for an electric vehicle in April 2021 was $51,532. That’s more than $11,000 higher than what you’d pay at the dealership for a full-size gas-powered car, and nearly $30,000 more than the average compact car sale.

Electric vehicle prices are moving in the right direction, though, decreasing 10%, on average, from April 2020 to April 2021. Increased pressure on automakers after Biden’s announcement on Thursday may drive prices even lower down the line.

Bear in mind that many electric cars are expensive luxury vehicles — some models go for over $100,000 — and that brings the average price up significantly. The cheapest electric cars, like the Nissan Leaf, start at under $30,000. And some electric cars don’t cost that much more than their gas-powered siblings. The starting price of an electric Mini Cooper is only $7,000 more than its regular gas-powered counterpart, for example.