Do electric cars actually save you money?

Transportation is the second-biggest expense for the average American household, right behind housing. So it's a fair question: does trading a gas-powered car for an all-electric vehicle (AEV) or plug-in hybrid (PHEV) actually save you money, or is that just something EV shoppers tell themselves?

The short answer is yes, in most cases, and by a wider margin than you might expect. Here's what changed since we last looked at this, and what the updated numbers actually show.

Fuel is where EV ownership pays off fastest, and it's not close.

Gas prices are volatile by nature. AAA's national average sat at $4.10 a gallon in late July 2026, and it's been anywhere from under $3 to well over $4 within the same year depending on oil markets, refinery issues, and global events you have no control over.

Of course, electricity prices move too, but far more predictably: the U.S. Energy Information Administration pegged the average U.S. residential rate at roughly 18.8 cents per kilowatt-hour this spring, a gradual climb rather than a weekly rollercoaster. Run the numbers and the gap is significant:

• A typical EV that travels about 3 to 3.5 miles per kilowatt-hour costs somewhere around 5 to 6 cents per mile to charge at home.

• A gas car averaging 24 miles per gallon at today's prices costs closer to 17 cents per mile.

That's a fuel cost roughly two-thirds lower for the EV.

The Department of Energy has tracked this gap for years using a metric it calls the "eGallon," which compares the price of electricity needed to drive an EV the same distance as one gallon of gas would carry a comparable gas car. Every time DOE has run the comparison, the electric equivalent has landed 50 to 60% below the price at the pump.

Consumer Reports reached a similar conclusion in its own cost-of-ownership analysis, finding that the average EV driver spends about 60 percent less to power their vehicle than a comparable gas car owner.

If you're not ready to go fully electric, a plug-in hybrid splits the difference. PHEVs run on battery power for shorter trips, then lean on a gas engine once the battery runs down, so you get some of the fuel savings without needing to plan your trips around charging stations.

Plug-in hybrids typically burn 30 to 60% less gasoline than a comparable conventional car, since the electric motor handles a meaningful share of everyday driving. You'll still buy some gas, and you'll still pay for electricity to charge the battery, but the blended cost per mile lands well below what a standard gas engine racks up. For drivers with unpredictable daily mileage or no reliable home charging setup, a PHEV is a reasonable middle ground.

The federal EV tax credit that used to knock up to $7,500 off the cost of an EV expired on September 30, 2025, under the law commonly known as the One Big Beautiful Bill.

That makes the upfront price of an EV a tougher pill to swallow than it was a year ago. But it's worth separating sticker price from operating cost. The tax credit only ever affected what you paid on day one. It never touched what you pay every month after that to fuel and maintain the car, and those ongoing savings are exactly where EVs pull ahead over time.

A few things can still soften the upfront hit:

• Some states and utilities offer their own EV rebates and incentives that weren't affected by the federal repeal.

• Used EV prices have been falling as more models come off lease, narrowing the price gap with comparable used gas cars.

• Automakers regularly roll out their own purchase incentives to stay competitive, independent of federal policy.

Check your state energy office before you assume you're paying full price. Even without the federal credit, plenty of drivers still come out ahead over a typical ownership period once fuel and maintenance savings are factored in.

Using electricity instead of gasoline to power your car is already cheaper. Some utilities sweeten the deal further with rate plans built specifically for EV owners, including:

• Discounted time-of-use rates for overnight charging

• Flat per-kilowatt-hour discounts for registered EV owners

• Reduced rates during off-peak hours, when the grid has capacity to spare

Programs vary by state and utility, so it's worth checking what's available where you live.

Fuel isn't the only place EVs save money. Maintenance is where a lot of drivers get pleasantly surprised.

All-electric cars skip the equipment that makes up much of a gas car's maintenance bill: no spark plugs, no transmission fluid, no oil changes, no exhaust system. Most EVs also use regenerative braking, which relies on the electric motor to slow the car and takes a lot of wear off brake pads and rotors.

Consumer Reports analyzed real-world maintenance and repair data from thousands of drivers and found that:

• EV and PHEV owners pay about half as much as gas car owners to repair and maintain their vehicles over a vehicle's life—roughly 3.1 cents per mile for EVs versus 6.1 cents per mile for gas cars.

• Over a car's lifetime, that gap works out to somewhere between $6,000 and $10,000 in savings, according to the same analysis.

Plug-in hybrids see a smaller version of the same benefit. Because the gas engine in a PHEV runs less often than in a conventional car, it experiences less wear, which means fewer oil changes and less strain on the engine over time.

If you really want to the most savings out of electric driving, charging your car with your own solar panels is one of the more effective ways to do it. Solar electricity typically costs less per kilowatt-hour than what you'd pay a utility, and pairing it with an EV means you're offsetting both your home's electricity use and your car's fuel costs with power you generate yourself. If you're able to charge your car during a sunny day, you're fueling it with free sunshine.

Solar systems built to cover EV charging pay for themselves through a combination of avoided utility bills and avoided gas station visits, which tends to shorten the payback period compared to sizing a system for home use alone. The average EnergySage Marketplace shopper breaks even on their solar investment in less than 10 years and most systems keep generating electricity for 25 years or more after that—well past the point where the panels have paid for themselves.

There's a secondary financial benefit too: homes with solar panel systems tend to sell faster and for more than comparable homes without them.

Combine an EV with home solar and you're stacking two of the biggest levers available for cutting transportation and utility costs at the same time, while relying less on both the gas pump and the grid.

For most drivers, yes.

Losing the federal tax credit makes the upfront cost of going electric less forgiving than it used to be, and that's worth factoring into your budget. But if you're in the market for a new vehicle anyway, EVs really aren't that much less expensive than a comparable model gas car.

For example, one of the top-selling gas cars last year was the 2025 Chevrolet Equinox, with a starting price of just under $30,000. Its electric twin, the Equinox EV, is just under $32,000—that’s only about a $2,000 difference, or roughly 33 gas-tank fill-ups, which you wouldn’t have to do with an EV.

And that's where EV cost savings really come in—the ongoing, lifetime of vehicle savings. You're enjoying cheaper and more predictable fuel costs, lower maintenance bills, and the option to charge with your own solar power. Even if you don't go solar, installing an EV charger at home cuts your fuel costs in half.

If you're weighing an EV against a comparable gas car, look past the sticker price and run the math on what you'll actually spend to drive it for the next five or 10 years.