EV vs. gas: 5-year cost comparison

The three ways EV vs. gas cost comparisons mislead

Most EV cost comparisons are wrong in one of three ways:

1. They compare MSRP, not TCO. An EV that costs $8,000 more to buy might cost $6,000 less to fuel and maintain over 5 years — a net premium of only $2,000.
2. They use average electricity and gas prices. Your actual costs depend on your local utility rate (which varies from $0.09 to $0.38/kWh across the U.S.) and your local gas price.
3. They ignore depreciation differences. EV depreciation has been a wild card; it's improving but still varies significantly by brand and model.

The fuel cost comparison

At 12,000 miles/year:

Scenario	Annual fuel cost	5-year total
Gas car, 25 MPG, $3.50/gal	$1,680	$8,400
Gas car, 30 MPG, $3.50/gal	$1,400	$7,000
Hybrid, 45 MPG, $3.50/gal	$933	$4,667
EV, 3.5 mi/kWh, $0.12/kWh	$411	$2,057
EV, 3.5 mi/kWh, $0.20/kWh	$686	$3,429
EV, 3.5 mi/kWh, $0.35/kWh (CA peak)	$1,200	$6,000

At $0.12/kWh, an EV saves $5,000–$6,000 in fuel vs. a 30 MPG gas car over 5 years. At $0.35/kWh (California peak rates), the savings shrink dramatically. Your electricity rate matters enormously.

The maintenance cost comparison

Estimated average annual maintenance costs:

• Gas economy car (Toyota Corolla): ~$500–$700/year
• Gas mid-size SUV: ~$700–$1,000/year
• Luxury gas vehicle: ~$1,200–$1,800/year
• EV (Tesla Model 3, Chevy Equinox EV): ~$300–$500/year

EV maintenance savings over 5 years: roughly $1,000–$2,500 vs. an equivalent gas car. This is meaningful but not transformative — fuel savings are usually the larger driver of EV economics.

The depreciation question

Depreciation is where EVs have historically been penalized:

• Early Tesla models (Model S, Model X) saw 50%+ depreciation in 3 years as new versions launched with significantly better specs.
• Mainstream EVs (Chevy Bolt, Nissan Leaf) also experienced steep depreciation.
• More recent data is better: Model 3/Y, Rivian, and Ford Mustang Mach-E have depreciated more comparably to mainstream gas vehicles.

The depreciation variable is the hardest to predict. Use a depreciation estimate in the TCO calculator and run scenarios at both optimistic (35%) and pessimistic (55%) 5-year depreciation to bracket your answer.

The break-even calculation

Say an EV costs $7,000 more than an equivalent gas vehicle (after any federal or state tax credits). At a combined fuel + maintenance savings of $2,000/year, the break-even is 3.5 years. If you plan to keep the vehicle 5+ years, the EV wins financially. If you're trading in at 3 years, it's a wash at best.

Key variables that shift the break-even:

• Local electricity rate (the most sensitive input)
• Annual mileage (higher mileage = faster break-even)
• Federal or state tax credits that reduce the EV premium
• Gas price trajectory over your ownership period
• Whether you charge at home (cheap) or mostly at public fast chargers (often expensive)

When gas wins

• High electricity rates + low mileage: fuel savings never catch up to the EV premium
• Short ownership period (2–3 years): not enough time to recoup upfront cost
• No home charging: heavy reliance on DC fast charging erodes fuel savings
• EV model with known high depreciation

When EV wins

• High mileage (18,000+ miles/year): fuel savings accumulate fast
• Low electricity rate + home charging
• Federal/state tax credits that meaningfully reduce the purchase premium
• Long ownership horizon (5–7 years)
• Vehicle with strong residual value (current Model 3/Y, for example)

Use the 5-Year TCO Calculator with the EV fuel type selected to model your specific situation — enter your electricity rate and actual efficiency for your vehicle.