EV vs Gas: Why Real-World Costs Aren't What You Expect

The EV vs. gas car decision is increasingly common, but the cost comparison is full of hidden variables that make predictions unreliable.

Advertised EV costs per mile ($0.03-0.05) versus gas cars ($0.10-0.12) sound compelling. But real-world ownership costs are far more complex, accounting for electricity prices, battery degradation, maintenance patterns, and usage specific to your situation.

An EV that looks $20,000 cheaper over 10 years might actually cost $5,000 more based on your actual electricity rates and driving patterns.

The Simple Math vs. Real-World Reality

Advertised EV advantage:

EV efficiency: 3.5-4.0 miles per kWh

US average electricity: $0.14/kWh

Cost per mile: $0.14 ÷ 3.75 = $0.037/mile

Gas car efficiency: 25 MPG (average)

US average gas: $3.50/gallon

Cost per mile: $3.50 ÷ 25 = $0.14/mile

Advantage EV: $0.103/mile

At 12,000 miles/year over 10 years (120,000 miles total):

Gas cost: 120,000 × $0.14 = $16,800

EV cost: 120,000 × $0.037 = $4,440

Savings: $12,360

This looks overwhelming. But real-world costs diverge from this calculation significantly.

Variable #1: Electricity Rates (Highly Geographic)

The average US rate of $0.14/kWh hides massive regional variation:

California: $0.25-0.30/kWh (peak time)

Hawaii: $0.35+/kWh

Louisiana: $0.11/kWh

Washington: $0.13/kWh

An EV in California at $0.28/kWh costs:

$0.28 ÷ 3.75 = $0.075/mile

120,000 miles: $9,000 electricity cost

Gas car comparison: $16,800

Savings: Only $7,800 (vs. $12,360 advertised)

An EV in Louisiana at $0.11/kWh costs:

$0.11 ÷ 3.75 = $0.029/mile

120,000 miles: $3,480 electricity cost

Savings: $13,320

Regional variation in electricity cost can swing the equation by $5,000-$7,000 over 10 years.

Variable #2: Gas Prices (Equally Variable)

Gas prices are equally volatile. Calculations assume $3.50/gallon, but reality fluctuates:

2021: $2.50/gallon

2022: $5.00/gallon

2025: $3.00-3.50/gallon

An EV purchased during $2.50/gallon times looks worse versus gas (gas was cheap). The same EV purchased when gas hit $5.00/gallon looks fantastic.

Timing of purchase significantly impacts perceived EV advantage.

Variable #3: Battery Degradation and Replacement

EV battery degradation is real. Most EV batteries degrade 2-3% annually:

New EV: 300-mile range

After 5 years: 270-285 mile range (10% degradation)

After 10 years: 240-270 mile range (20% degradation)

This affects real-world efficiency. An older EV might achieve 3.0 miles/kWh instead of 4.0 miles/kWh.

Battery replacement (if needed outside warranty):

Battery cost: $15,000-$25,000

Installed: $20,000-$30,000+

A battery replacement at year 8-10 dramatically increases the true cost of ownership.

However, most EV batteries outlast 200,000+ miles without major degradation, so replacements are uncommon.

But the risk is real and not accounted for in typical cost calculators.

Variable #4: Maintenance Differences

EVs have lower maintenance costs but not zero:

EV maintenance savings:

No oil changes (gas cars: $600-1,200 over 10 years)

No spark plugs, timing belts, transmission fluid (saves: $1,500+)

No cooling system flushes (saves: $500+)

Brake pads last longer due to regenerative braking (saves: $1,000+)

Total EV maintenance advantage: ~$3,500-4,000 over 10 years

EV maintenance costs:

Tire wear slightly higher (EVs are heavier)

Battery cooling system maintenance

Software updates/diagnostics

Replacement brake fluid, cabin air filters

Total EV maintenance costs: ~$1,500-2,500 over 10 years

Net EV advantage in maintenance: ~$2,000-3,000 over 10 years

Gas cars save money on fuel but cost more on maintenance. This partially offsets EV electricity advantages.

Variable #5: Depreciation and Residual Value

EV depreciation is steeper than gas cars in most markets:

Gas car depreciation (example):

Purchase price: $35,000

Value after 5 years: $21,000 (60% retention)

Depreciation over 5 years: $14,000

EV depreciation (example):

Purchase price: $45,000 (with tax credit: $31,500)

Value after 5 years: $22,500 (50% retention)

Depreciation over 5 years: $22,500

Gas cars hold value better, reducing the total cost of ownership for owners who trade in.

This is improving as EV markets mature, but it's a current reality.

Variable #6: Charging Infrastructure and Convenience

Home charging eliminates many convenience costs but requires upfront investment:

Home charger installation:

Level 2 charger: $500-2,000 installed

Electrician upgrades: $1,000-3,000 if needed

Without home charging:

Public charging costs vary ($0.25-0.50/kWh at public stations)

Convenience factor: Can't charge overnight, requires planning

An EV owner without home charging faces convenience costs and higher public charging rates.

Real-World Cost Example: Three Scenarios

Scenario A: Low electricity cost, long ownership

Location: Louisiana ($0.11/kWh)

Ownership: 10 years

Annual miles: 12,000

EV cost: 120,000 miles × $0.029/mile = $3,480

Gas car cost: 120,000 miles × $0.14/mile = $16,800

EV advantage: $13,320 (plus $3,000 maintenance savings = $16,320 total)

Scenario B: High electricity cost, short ownership

Location: California ($0.28/kWh off-peak, $0.50/kWh peak)

Ownership: 5 years

Annual miles: 12,000 (heavily peak-hour charging)

EV cost: 60,000 miles × $0.13/mile (peak charging) = $7,800

Gas car cost: 60,000 miles × $0.14/mile = $8,400

EV advantage: Only $600 (higher depreciation swing favors gas)

Scenario C: Average conditions

Location: National average ($0.14/kWh)

Ownership: 7 years

Annual miles: 12,000

EV cost: 84,000 miles × $0.037/mile = $3,108

Gas car cost: 84,000 miles × $0.14/mile = $11,760

EV advantage: $8,652 (minus higher depreciation: $6,000 net advantage)

None of these match the $12,360 advertised savings because real-world variables diverge from the simple calculation.

The Tax Credit Factor: Inflates EV Advantage

Federal EV tax credits ($7,500 in 2025, phasing down) dramatically shift the equation:

With tax credit:

EV purchase: $45,000

Tax credit: -$7,500

Net cost: $37,500

Without considering credit:

EV vs. gas advantage: $8,652 over 7 years

With credit included in first-year cost: Advantage becomes $16,152

The tax credit is extremely valuable but shouldn't be confused with operating savings.

Actionable Framework: Should You Buy an EV?

EV makes financial sense if:

You have home charging capability ($500+ upfront is worth it)

Electricity rates in your area are below $0.18/kWh

You plan to keep the car 7+ years

You drive 12,000+ miles annually

You're eligible for tax credit or incentives

Gas car is better if:

Electricity in your area exceeds $0.25/kWh (peak charging likely)

You move frequently (short ownership periods)

You have no home charging access

Gas prices are low ($2.50/gallon or less)

The Bottom Line: Context Matters More Than the Advertised Advantage

EV operating costs are genuinely lower in most scenarios, but the $10,000+ advantage advertised assumes ideal conditions:

National average electricity rates

Average gas prices

10-year ownership

Home charging

Your actual scenario might produce zero advantage or a significant advantage depending on variables outside the simple calculation.

Do the math with your specific conditions:

Your local electricity rate

Your driving patterns

Your ownership timeline

Your charging situation

An EV in Louisiana with home charging owned for 10 years might save $16,000. The same EV in California without home charging owned for 5 years might cost $2,000 more.

The real advantage is convenience, not cost, in many scenarios.