Is an EV Actually Cheaper? Electric Car Cost vs Gas in 2026

An electric vehicle (EV) is a car that runs only on a battery you recharge from the grid, with no gasoline engine at all. The sticker price is just the start, though. The true electric car cost includes charging, insurance, maintenance, financing and, above all, depreciation, which is the value a car loses between the day you buy it and the day you sell it.

The math also shifted a lot over the past year. Gas prices jumped, the federal EV tax credit disappeared, and insurers narrowed the EV premium gap on newer models. So this guide uses only numbers checked in October 2026, mostly from AAA, the U.S. Energy Information Administration (EIA), the IRS and Kelley Blue Book.

What Is the Real Electric Car Cost vs Gas in 2026?

In AAA’s 2026 Your Driving Costs study, the yearly electric car cost ran slightly above gas in most vehicle classes, while hybrids were cheapest in all four classes AAA compared. Because EVs save so much on fuel, the gap is now small for SUVs, yet it remains wide for sedans.

AAA’s study, published September 15, 2026, puts the average cost of owning and running a new vehicle at $12,863 a year, based on five years and 75,000 miles (15,000 miles a year). For the first time, AAA also compared EV, gas and hybrid versions within the same vehicle classes. According to Kelley Blue Book’s summary of the AAA data, here is how the cost per mile compares:

Vehicle class	Electric	Gas	Hybrid	Cheapest
Medium sedan	$0.911/mile	$0.705/mile	$0.680/mile	Hybrid
Compact SUV	$0.793/mile	$0.777/mile	$0.747/mile	Hybrid
Medium SUV	$0.955/mile	$0.962/mile	$0.913/mile	Hybrid
Pickup truck	$1.161/mile	$1.108/mile	$1.074/mile	Hybrid

Notably, the medium SUV is the one class where the EV edged out gas. In the compact SUV class, the EV cost only about 1.6 cents a mile more. Still, the electric medium sedan was well behind, largely because its depreciation was so steep.

Electric car cost vs gas: a compact SUV, line by line

To see where the money goes, it helps to break one class down. CarPro’s report on the AAA study lists these yearly figures for compact SUVs:

Cost per year	Electric	Gas	Hybrid	Winner
Depreciation	$5,298	$3,568	$3,845	Gas
Fuel or charging	$771	$2,382	$1,731	Electric
Maintenance, repair and tires	$1,402	$1,954	$1,506	Electric
Total cost to own	$11,888	$11,656	$11,201	Hybrid
Cost per mile	About 79¢	About 78¢	About 75¢	Hybrid

In other words, the EV saves about $1,611 a year on fuel and $552 on maintenance. However, it gives most of that back through an extra $1,730 a year in lost value. Over five years, that is roughly $10,800 saved on running costs vs $8,650 lost to faster depreciation, before insurance and financing.

How Much Cheaper Is an EV to Fuel Per Mile?

Charging at home, an EV typically costs about a third as much per mile as gasoline. If you rely on DC fast chargers, however, the savings can shrink to almost nothing.

Here are today’s inputs. AAA’s national average for regular gas was $4.33 a gallon on October 16, 2026, up from $3.06 a year earlier. Similarly, the EIA’s weekly survey showed $4.331 for the week of October 12, up $1.27 from a year ago. Meanwhile, the average US residential electricity price was 18.31 cents per kWh in July 2026, according to the EIA’s Electric Power Monthly. Finally, charging-data firm Paren reported an average DC fast-charging price of $0.53 per kWh in Q1 2026.

EV vs gas cost per mile, worked example

The table below uses those prices plus two simple assumptions: a gas car averaging 30 mpg and an EV averaging 3.5 miles per kWh. Your own car’s efficiency will differ, so treat this as a template rather than a quote.

How you fuel	Price used	Cost per mile	Cost for 15,000 miles
Gas car (30 mpg)	$4.33/gallon	About 14.4¢	About $2,165
EV, home charging only	18.31¢/kWh	About 5.2¢	About $785
EV, 80% home / 20% fast charging	Blend	About 7.2¢	About $1,080
EV, DC fast charging only	53¢/kWh	About 15.1¢	About $2,270

As a result, a home charger is the single biggest factor in whether an EV saves you money. Our home-charging figure also lines up with AAA’s real-model estimate of $771 a year for a compact electric SUV. By contrast, a driver who only uses fast chargers pays about the same per mile as a 30 mpg gas car.

Do EVs Still Cost More to Buy After the Tax Credit Ended?

Yes. New EVs still sell for about $5,300 more than the average new vehicle, and the federal credit that once cut up to $7,500 off the price is gone.

According to Cox Automotive’s September 2026 Kelley Blue Book report, buyers paid an average of $55,879 for a new EV, compared with $50,562 across all new vehicles. EV prices were down 3% from a year earlier. On the other hand, dealer and maker incentives on EVs fell to 11% of the transaction price, their lowest point in 2026, down from 14.2% a year earlier.

What happened to the $7,500 EV tax credit?

The One Big Beautiful Bill Act (OBBBA), the July 2025 federal tax law, ended the clean vehicle credits early. The IRS states that the new clean vehicle credit is not available for vehicles acquired after September 30, 2025. The used EV credit of up to $4,000 ended on the same date.

Likewise, the home charger credit (Section 30C), worth 30% of the cost up to $1,000, applied only to equipment placed in service by June 30, 2026, and only in eligible low-income or non-urban census tracts, according to the IRS charger credit page. So it no longer helps anyone buying a charger today.

Does the car loan interest deduction help EV buyers?

It helps, but it is not an EV perk. The same law created a deduction of up to $10,000 a year in interest on loans for new personal vehicles whose final assembly took place in the United States, for tax years 2025 through 2028. It phases out above $100,000 of modified adjusted gross income for single filers and $200,000 for joint filers, and used cars do not qualify, according to Kelley Blue Book’s coverage of the final IRS rules. Because gas cars built in the US qualify too, it does not change the EV vs gas comparison.

Why Does Depreciation Hurt EVs So Much?

EVs lose value faster than any other vehicle type, and that single cost usually wipes out most of their fuel savings. In fact, AAA called depreciation the biggest obstacle for EVs in its 2026 study.

For example, iSeeCars’ 2026 study of more than 950,000 five-year-old used cars sold between March 2025 and February 2026 found these average five-year losses:

Vehicle type	Average 5-year depreciation
Electric vehicles	57.2%
All vehicles	41.8%
Hybrids	35.4%

There are a few likely reasons. First, EV technology improves quickly, so newer models with more range make older ones look dated. Second, price cuts on new EVs pull down used values. Third, the original sticker prices used in these studies often did not account for tax credits buyers received, which can make EV losses look larger than what owners actually paid. Still, the pattern is clear and consistent across studies.

That said, fast depreciation cuts both ways. If you buy a used EV, the first owner has already absorbed the steepest drop, which can make a two- or three-year-old EV one of the best-value cars on the road.

Are EVs More Expensive to Insure?

Yes, on average, though the gap is shrinking fast for newer cars. Insurify’s 2026 analysis of more than 235 million quotes found full coverage averages $3,159 a year for EVs vs $2,218 for gas cars, a 42% difference.

However, when Insurify looked only at 2024-and-newer models, the gap fell to 18%, according to Repairer Driven News. That is because driver-assistance tech, which raises repair bills, is now standard on many gas cars too. AAA’s compact SUV data points the same way: the EV’s $2,277 yearly premium was only slightly above the gas model’s.

Why do EVs still cost more to cover? Mainly, they tend to have higher purchase prices, specialized parts and fewer repair shops trained to fix battery packs. As a result, claims can cost more. Your own premium, though, depends far more on your state, driving record and the exact model, so always get quotes before you buy.

Are EVs Cheaper to Maintain?

Yes. EVs need no oil changes, have fewer moving parts and wear out brakes more slowly thanks to regenerative braking, so routine upkeep costs less.

The Department of Energy’s Alternative Fuels Data Center notes that the battery, motor and electronics need little to no regular maintenance, and that many makers offer 8-year/100,000-mile battery warranties. In dollar terms, AAA’s 2026 data put maintenance, repair and tires at $1,402 a year for a compact electric SUV vs $1,954 for gas, a saving of about $550 a year.

There is one exception, though. In AAA’s pickup class, the electric truck cost more to maintain than the hybrid. Also, EVs are heavy, so budget for tires, and remember that an out-of-warranty battery replacement would be a significant expense, as the DOE puts it.

Who Actually Saves Money With an EV?

An EV tends to pay off for drivers who charge at home, drive many miles and keep the car a long time. Meanwhile, it usually does not pay off for people who rely on public fast charging or trade in after three years.

Your situation	Is an EV likely cheaper?	Why
Homeowner with a charger, 15,000+ miles a year, keeps cars 7+ years	Often yes	Fuel and maintenance savings keep adding up after the steepest depreciation years
Buying a 2- to 3-year-old used EV	Often yes	The first owner absorbed the biggest value drop
Apartment renter relying on DC fast charging	Usually no	Fast charging can cost as much per mile as gas
Low-mileage driver (under 8,000 miles a year)	Usually no	Fuel savings are too small to offset faster depreciation
Trades in every 3 years	Risky	You sell during the steepest part of the depreciation curve
Wants the lowest total cost, new	Consider a hybrid	Hybrids had the lowest cost in every AAA class

Is an EV cheaper than a hybrid?

Not on AAA’s 2026 numbers. Hybrids finished with the lowest total ownership cost in compact SUVs, medium SUVs, pickups and medium sedans. While an EV beats a hybrid on fuel, a hybrid holds its value far better, losing an average of 35.4% over five years vs 57.2% for EVs in the iSeeCars data.

Is an EV cheaper to own if you keep it longer?

Generally, yes. Depreciation is heaviest in the first few years, whereas fuel and maintenance savings continue every year you drive. So the longer you keep an EV, the more its running-cost advantage can catch up with its higher electric car cost up front.

How to Lower Your EV Ownership Costs

The fastest way to cut your electric car cost is to charge at home off-peak and buy at the right point on the depreciation curve. Here are the steps that matter most:

1. Charge at home whenever you can. At today’s average rates, home charging costs about a third of fast charging per mile.
2. Switch to an off-peak or EV rate plan. Then schedule charging overnight through the car’s app.
3. Consider a lightly used EV. Because EVs lose value fast, a two- or three-year-old model skips the steepest drop.
4. Get insurance quotes before you choose a model. Premiums vary widely by model and state, so compare several insurers.
5. Check state and utility rebates. The federal credit is gone, but some local programs remain; the DOE database lists them.
6. Claim the car loan interest deduction if you qualify. It applies to new, US-assembled vehicles bought with a loan, EV or gas.

If you are still choosing a model, our guide to the best electric cars compares range and value. For the bigger picture beyond EVs, also see our breakdown of what it costs to own a car in the US.

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