Gas vs. Electric: Which Costs Less to Own Over Five Years?

Purchase Price and Incentives

The sticker price gap between gasoline and electric vehicles remains real. The average transaction price for a new EV in the US has historically run several thousand dollars above a comparable gasoline model, though that gap has narrowed as more mainstream EV options enter the market.

Federal tax credits — currently up to $7,500 for qualifying new EVs under the Inflation Reduction Act — can significantly reduce the effective purchase price for eligible buyers. Income limits and vehicle price caps apply, so not every buyer qualifies. Many states layer on additional rebates. When these incentives apply, the upfront cost difference between EV and gasoline segments shrinks considerably, though it rarely disappears entirely.

For a full breakdown of how purchase financing interacts with these costs, see our leasing vs. buying comparison — the method you choose to finance affects five-year totals substantially.

Fuel and Energy Costs

This is where EVs typically generate their clearest advantage. The US Department of Energy's eGallon metric — a measure of how much electricity it costs to drive as far as a gallon of gasoline — has generally shown electricity to be cheaper on a per-mile basis than gasoline in most US regions.

At 15,000 miles per year, a gasoline vehicle averaging 28 MPG and fueled at $3.50 per gallon costs roughly $1,875 annually in fuel. An EV averaging 3.5 miles per kilowatt-hour charged at a blended home rate of $0.16/kWh costs approximately $686 for the same mileage — a difference of around $1,200 per year, or about $6,000 over five years. These figures vary by region, electricity rate, and driving pattern; drivers relying heavily on public DC fast chargers will see narrower savings.

Maintenance and Repair

EVs have a mechanical advantage here. Without an internal combustion engine, they eliminate oil changes, transmission fluid, spark plugs, and exhaust system repairs. Regenerative braking also reduces brake pad wear. AAA and Consumer Reports data have consistently shown EV owners reporting lower annual maintenance costs than gasoline vehicle owners.

A typical gasoline vehicle might incur $800–$1,200 per year in scheduled maintenance. EV maintenance estimates have generally run $300–$700 annually, though battery replacement — an infrequent but potentially costly event outside the warranty period — is a wildcard. Most EV batteries are warranted for 8 years or 100,000 miles by federal mandate.

For a broader look at what routine upkeep actually costs, visit our car maintenance hub. And don't overlook the smaller recurring costs covered in our piece on underestimated car ownership costs.

Insurance and Depreciation

Two cost categories often undercut EV savings: insurance premiums and depreciation.

EV insurance premiums have generally been higher than equivalent gasoline vehicles, partly because repair costs — particularly for sensors, cameras, and high-voltage components — tend to be elevated. The gap varies by insurer and model; consulting a licensed insurance agent about your specific situation is worthwhile before purchase. For general guidance on managing these costs, see our auto insurance hub.

Depreciation is the largest single cost for most vehicle owners over five years. EVs have historically shown steeper depreciation in some segments, though this varies significantly by brand and model. Our depreciation rates by vehicle type guide provides reference figures to ground your estimates. A gasoline sedan losing 50% of its value over five years may still leave the EV ahead if fuel and maintenance savings are large enough — but the math is close and model-specific.

Understanding the full picture — purchase, fuel, maintenance, insurance, and depreciation together — is what total cost of ownership analysis is designed to clarify.