EV vs. Gas: Which car is cheaper to own?

 

Some EV enthusiasts may argue that electric vehicles are cheap to fuel and maintain, so they must be cheaper to own and operate. EV skeptics counter that many EVs command a premium price tag, something that can be quantified when a brand sells both gasoline and fully EV versions of the same vehicle. So are EVs really cheaper over the long term? To some extent, yes. In some cases. As they say, it's complicated.

To find out whether electric cars are actually cheaper to own and use as your daily transportation than gasoline-powered cars, we chose two models available in the US market with both powertrains: the Hyundai Kona and Kona Electric , and the Ford F-150 and F-150 Lightning. We compared as many running costs as we could from reliable sources.

Three-year cost analysis

We decided to look at the overall cost of ownership over the first three years, and we stuck to numbers that we could identify. To make the comparison as clear as possible, we didn't include financing costs or insurance costs. How you finance your car purchase (loan term and interest rate, or whether you lease) can have a big impact on your total cost. Insurance costs also vary widely depending on your state, your driving record, and the coverage you choose.

Initial Purchase Price

Our journey begins with purchase price. We used the most basic trim for the Hyundai and the XLT trim for the F-150, which is one step above the most basic work truck trim of each model. We also equipped the Lightning with the standard range battery. We'll factor in the federal tax credits available for the two EVs later. Here are the purchase prices (including delivery) for the vehicles:

Hyundai Kona : $22,595

Hyundai Kona Electric : $35,295

Ford F-150 : $40,960

Ford F-150 Lightning : $54,769

Mileage

For annual mileage, we went with 15,000 miles, the de facto average mileage statistic for U.S. drivers. Both electric vehicles in question have EPA-estimated ranges close to the industry average: 258 miles for the Kona Electric and 230 miles for the F-150 Lightning, so owners should have no trouble reaching that number. The result was 45,000 miles over three years.

Maintenance costs

To calculate maintenance costs, we used AAA’s 2022 Cost of Driving Analysis , which determines how much maintenance you pay per mile to drive your vehicle. Costs are broken down by market segment silo (sedan, SUV, pickup, EV, etc.) over a five-year period for service items like tires, brakes, oil changes, and repairs. Yes, that’s longer than the three-year timeline, so in this case, the one-mile-ahead figures may be inflated beyond what you might experience after three years in these vehicles. And these maintenance costs are higher than you would experience in our long-term 40,000-mile test. But AAA’s data provides a solid basis for comparison, with all of the subject vehicles treated equally. As expected, without oil changes and other engine maintenance, EVs are less expensive to maintain. Here are the maintenance costs per mile and across 45,000 miles:

Hyundai Kona : $0.0984/$4,428 per mile

Hyundai Kona Electric : $0.0794/mile / $3,573

Ford F-150 : $0.0933/mile / $4,199

Ford F-150 Lightning : $0.0794/mile / $3,573

In most cases, comparing EVs to gasoline cars is not a straightforward comparison.

Energy usage

To calculate the energy usage for both types of vehicles, we used the EPA's gallons per 100 miles and kilowatt-hours. For both of these units, the lower the number, the more efficient the car. As you can see below, both Hyundais are more efficient than the F-150, which is what you'd expect from a small SUV rather than a full-size truck.

Hyundai Kona : 3.1 gallons/100 miles

Hyundai Kona Electric : 27 kWh / 100 miles

Ford F-150 : 5.0 gal/100 mph

Ford F-150 Lightning : 48 kWh / 100 miles

Gasoline costs

We used the national average gasoline price . Regular gasoline is $3.70 per gallon, and both the Kona and F-150 are at this price. As you know, gasoline prices have been very volatile recently , with inflation, Russian invasion, and other factors driving up prices, making future prices difficult to predict. That said, gasoline prices have been trending downward recently and may continue to move in that direction, but it's unlikely we'll see pre-pandemic prices anytime soon. Still, for the sake of our calculations, let's assume prices stay at October prices for the time being. Here's how much it costs to drive a gasoline-powered Kona and F-150 for 45,000 miles:

Hyundai Kona : $5,162

Ford F-150: $8,325

Charging cost

Charging costs are harder to determine. First, many charging stations charge by the minute, not by kilowatt-hour. This method of charging can be frustrating for EV owners. Luckily, that’s changing, and Electrify America , one of the largest charging station networks, is charging $0.43/kWh for DC fast charging and Level 2 charging in our home state of Michigan. While some Electrify America units can charge at speeds up to 350kW, most EVs aren’t capable of charging that fast. Still, paying by the kWh evens out the cost gap between slower and faster charging electric vehicles.

average rate of $0.1546/kWh, the most recent rate available . Electricity prices in the US vary widely. In 2020, Louisiana had a mere $0.0751 per kWh, while Hawaii had a hard-on-the-wallet rate of $0.2755 per kWh. This means that the cost of charging at home will depend on where you live.

Another piece of the EV charging puzzle is the split between home and on-the-go charging. A June 2021 Fuels Institute study on EV consumer behavior found that 70-80% of charging occurs in a home or work parking lot. For our calculations, we used an 80/20% split between home and public charging.

We put all these charging numbers together to calculate how much it would take to charge two EVs enough to drive them 45,000 miles.

Hyundai Kona Electric : $2,548

Ford F-150 Lightning: $4,529

Depreciation

The last bit of data that impacts the cost of owning a vehicle is a big one: depreciation. This is tricky because predicting depreciation is a guess based on past experience, customer demand, vehicle availability, brand reputation, and maybe even the phases of the moon. A quick look at the numbers shows that EVs depreciate faster than gasoline-powered cars. Cari Crane, director of insights at ALG (formerly known as Auto Lease Guide), says the high price of electric vehicles is part of the reason for the sharp increase in depreciation. "In dollar terms, they're more expensive than a similarly equipped, year-compatible ICE (internal combustion engine) vehicle. They're actually depreciating faster because they're more expensive." Using Vincentric, AAA's source of depreciation metrics, we came up with the following numbers for a three-year depreciation :

Hyundai Kona : $9,795

Hyundai Kona Electric : $15,305

Ford F-150 : $13,981

Ford F-150 Lightning : $15,738

3-year cost of ownership comparison

The total numbers after three years give us some insight into the question, "Are EVs getting cheaper?" Based on fuel, maintenance and depreciation costs over a three-year period, here's what we found about the cost of owning our subject vehicles:

Hyundai Kona : $19,385

Hyundai Kona Electric : $21,426

Ford F-150 : $26,505

Ford F-150 Lightning : $23,840

EV Tax Credit

a $7,500 tax credit for both electric vehicles if you buy one new . Eligibility is a bit complicated. The Inflation Control Act, signed into law on August 16, 2022, puts new rules in place for EVs purchased after that date . First, the 200,000-unit cap for manufacturers will be lifted by the end of the year, so brands that sold large volumes of EVs will once again be eligible for the credit.

However, there are some new criteria. First, the vehicle's final assembly must take place in the United States. The Lightning is manufactured in the United States, and Hyundai has plans to start manufacturing EVs in the United States as well. Additionally, to qualify for the credit, the buyer's income must be $150,000 or less, or $300,000 for joint filers, and the price of the EV cannot exceed $55,000 for cars and $80,000 for SUVs and trucks. We don't know if your income qualifies, but we can say that the MSRPs of the electric cars we looked at are both below the limits. In the case of the Lightning, however, certain trims and options may put the truck over the limit.

Still, the Inflation Control Act requires that to receive half the credit, a certain percentage of battery materials must come from the U.S. or a country with a free trade agreement with the U.S. To receive the other half, the batteries must be manufactured in the U.S. Using battery materials sourced from a "foreign entity of concern" makes a vehicle ineligible for the credit.

All of this is complicated, with different rules phased in at different times, which only makes getting the EV tax credit if you buy a car within the next year more complicated. However, many manufacturers, including Hyundai and Ford, have plans to source and manufacture EV batteries in the US for the foreseeable future, so for the purposes of this calculation, let's assume that a given car was sourced in the US.

We've given both vehicles the full $7,500 New Car Credit for purposes of calculating your new 3-year cost of ownership, but we can't guarantee that this will actually happen. Check out the IRS page on the credit for more information, and use the NHTSA's VIN decoder to see where your particular vehicle was manufactured.

Hyundai Kona Electric : $13,926

Ford F-150 Lightning : $16,340

Which is cheaper to own?

So, by our calculations, an electric F-150 would be $2,664 less expensive to own and operate over the first three years than a gasoline-powered vehicle. That's without the tax credit. With the tax credit, it would be a massive $10,164 less. Meanwhile, the Kona Electric would be $2,041 more expensive than a gasoline-powered vehicle without the tax credit, but $5,459 less with the tax credit. State and local incentives for EVs, if available, should also be taken into account. Additionally, as the years go by, electric vehicles continue to have lower operating costs (fuel and maintenance).

The problem now is that not all new EVs qualify for the $7,500 incentive. As it stands, even though manufacturers have plans to build their EV batteries in the U.S., the vast majority of batteries on the market don't meet all of the requirements enumerated in the Inflation Control Act. In fact, many vehicles won't qualify at all because their batteries contain materials sourced from China, which accounted for 76% of the world's lithium-ion battery production capacity as of 2020 and is likely considered one of the "foreign companies of concern" in the bill.

Another complication is that with so few electric vehicles on the road, comparing an EV to a gasoline-powered car isn't a simple comparison. There's no Tesla Model 3 or Ford Mustang Mach-E that runs on gas . Buyers have to compare it to a nearly identical gasoline-powered car. That makes the math to determine which car is the most cost-effective even more mind-boggling than we've attempted here. But there's a better way.

Compare for yourself

If you want to know the cost difference between EVs and gasoline-powered cars, the U.S. Department of Energy has a handy tool on its site that lets you compare the total cost of multiple vehicles at once based on your annual driving habits, EPA data, and even loan information . It also takes your state into account, so the fuel cost data can be adjusted for local gas and electricity prices.

So will it be cheaper to own an EV in the long run? All the signs point to it possibly being so. Maybe. Sometimes. But as we've said, it's complicated at this point.