If you’re wondering “why is electric cars cheaper?” you’re really asking about total cost of ownership, not just sticker price. In 2025, electric vehicles (EVs) often cost more to buy new but less to fuel and maintain, and used EVs have become some of the best deals in the market. Let’s unpack where EVs are genuinely cheaper, and where they aren’t.
Quick answer
Electric cars are usually cheaper to run than gasoline cars because electricity costs less per mile than fuel and EVs need less routine maintenance. They can also be cheaper to buy used thanks to rapid depreciation. But new EVs can still have higher upfront prices and insurance, so the savings depend on how much you drive and how you charge.
Are electric cars really cheaper in 2025?
EV vs gas: what’s actually cheaper now?
The headline story in 2025 is that EVs are becoming cheaper where it matters most: the used market and day‑to‑day running costs. Recent data show that by mid‑2024 the average used EV was around 8–11% cheaper than the average used gas car, after being thousands of dollars more expensive just a year earlier. At the same time, lifetime maintenance and repair for EVs is tracking at about half the cost per mile of comparable gasoline vehicles. On the other hand, major ownership cost studies still find that brand‑new EVs can be more expensive overall if you look only at the first five years and factor in higher depreciation, insurance and finance costs. So the answer to “are electric cars cheaper?” is: often yes, especially used, if you drive enough miles and charge smart.
Think in total cost, not monthly payment
Instead of asking whether a specific EV payment is cheaper than a gas car payment, look at total monthly cost: payment + electricity or fuel + maintenance + insurance. That’s where EVs often win, especially at used prices.
How EVs save money on fuel
The biggest recurring reason electric cars are cheaper is simple: electric drivetrains waste far less energy than combustion engines. That efficiency shows up directly in your cost per mile.
Fuel cost: electric vs gasoline (typical U.S. scenario)
Approximate cost per mile for an efficient EV vs a typical gasoline car, assuming home charging and national‑average energy prices in 2025.
| Vehicle type | Energy use | Energy price (approx.) | Fuel cost per mile | Cost per 1,000 miles |
|---|---|---|---|---|
| Efficient EV (e.g., compact crossover) | 0.30 kWh/mi | $0.17/kWh home | ≈$0.05/mi | ≈$50 |
| Efficient hybrid gasoline | 40 mpg | $3.15/gal | ≈$0.08/mi | ≈$79 |
| Typical gas sedan/SUV | 28 mpg | $3.15/gal | ≈$0.11/mi | ≈$113 |
| Frequent DC fast‑charging EV | 0.30 kWh/mi | $0.35/kWh public | ≈$0.11/mi | ≈$105 |
Real‑world numbers vary by state and driving style, but the gap between EV and gas fuel costs is consistently large when you can charge at home.
When public fast charging erodes savings
If you rely heavily on DC fast charging at highway stations, your electricity price can be comparable to, or even higher than, gasoline per mile. EVs are cheapest to run when most charging happens at home or at low‑cost workplace chargers.
- EVs convert about 70–80% of the energy in electricity at the plug into motion, while gasoline engines typically only convert 20–30% of the energy in fuel.
- Electric motors recover energy during braking (regenerative braking), which effectively boosts efficiency in stop‑and‑go driving.
- Home charging lets you tap off‑peak electric rates; some utilities now offer EV‑specific plans that make overnight charging even cheaper.
For a typical commuter driving 12,000 miles per year, the difference between $0.05 and $0.11 per mile is about $720 a year in fuel savings compared with a 28‑mpg gasoline car, assuming mostly home charging. Over eight years, that’s more than $5,700 in fuel savings alone.
Maintenance: why electric cars are cheaper to keep running
Electric cars strip out many of the complex, wear‑prone systems that drive maintenance bills in gasoline cars. No oil changes, no spark plugs, no exhaust system, no multi‑speed automatic transmission. That simplicity is a big reason electric cars tend to be cheaper to maintain over the long run.
Why EVs usually cost less to maintain
Fewer moving parts, fewer fluids, fewer headaches.
Simpler powertrain
Less routine service
Predictable costs
But what about expensive EV repairs?
You’ve probably heard stories about $15,000 battery replacements. These cases exist, but they’re rare and often involve out‑of‑warranty packs or crash damage. Most modern EVs have 8–10 year battery warranties, and real‑world data show average battery capacity loss of under 2% per year. Buying used within the warranty window can keep this risk very low.
From a fleet perspective, where spreadsheets rule every decision, the pattern is clear: electric vans and trucks are now among the cheapest vehicles to service per mile, with some analyses showing service costs roughly 80% lower than diesel over the first few years. Private owners see the same forces at work, just on a smaller scale.
Purchase price and depreciation: new vs used EVs
So far we’ve focused on running costs. But when people ask why electric cars are cheaper, they’re often looking at the purchase price too, especially in the used market. The story here has changed dramatically in the last two years.
Average used prices: EV vs gas (illustrative 2024–2025 snapshot)
How the used market has shifted from EVs being more expensive than gas cars to often being cheaper.
| Timeframe | Avg. used EV price | Avg. used gas car price | Difference |
|---|---|---|---|
| Mid‑2023 | ≈$40,900 | ≈$32,700 | +25% (EV more expensive) |
| Early 2024 | ≈$30,900 | ≈$31,200 | Roughly equal |
| Mid‑2024 | ≈$28,800 | ≈$31,400 | EV ≈$2,600 cheaper |
| Late 2024–2025 trend | Mid‑$20Ks | Around $30K | EVs often 10–15% cheaper |
These figures are representative of U.S. market data showing used EVs undercutting used gas cars on average by mid‑2024, after steep EV‑specific price drops.
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Because new EV prices and technology moved quickly from 2020–2023, early‑generation models depreciated hard. Used EV values fell more than 30% in 2024 alone in some segments, compared with only single‑digit declines for gas cars. By late 2024, it was common to find three‑year‑old EVs, Tesla Model 3, Hyundai Ioniq 5, VW ID.4, Ford Mustang Mach‑E, selling for $25,000–$30,000 while similar gas crossovers held values closer to $30,000–$35,000. That’s why so many 2025 market reports now say “the best EV deals are in the used market.” The first owner absorbed rapid depreciation; the second owner enjoys low purchase price plus low fuel and maintenance costs.
Where Recharged fits in
At Recharged, every used EV comes with a Recharged Score Report that includes verified battery health and fair‑market pricing. That helps you take advantage of today’s buyer‑friendly used EV prices without guessing about hidden battery issues.
Incentives, taxes, and charging at home
Government incentives and tax policy can tilt the math on whether electric cars are cheaper, especially when you’re comparing new vehicles. In the U.S., 2025 is a transition year: federal EV tax credits of up to $7,500 for new EVs and $4,000 for used EVs are set to end after September 30, 2025. That deadline has pulled some demand forward but also means incentives may not be there for buyers shopping later.
Levers that make EV ownership cheaper
1. Federal and state EV incentives
While they last, federal and state credits can shave thousands off the purchase price. Always check current eligibility for both <strong>new and used</strong> EVs, rules change frequently.
2. Utility rebates for home chargers
Many utilities offer <strong>rebates or special rates</strong> for installing a Level 2 home charger. A typical unit costs $300–$700 plus installation, but credits can cover up to 30% of that bill, up to a cap.
3. Off‑peak or EV‑specific electric rates
Some utilities let you enroll in time‑of‑use or EV‑specific plans, making overnight charging far cheaper than daytime usage and turning your EV into a sort of rolling off‑peak energy customer.
4. Home vs public charging mix
The more you can charge at home or work, the more your <strong>per‑mile fuel cost</strong> undercuts gasoline. Occasional fast‑charge road trips don’t ruin the economics, but relying on them daily can.
Taxes are evolving
As more drivers switch to EVs, governments are experimenting with road‑use charges and EV‑specific fees to replace gas‑tax revenue. Those add to ownership costs, but current analyses still find that, even after new fees, EVs can be around $1,000 per year cheaper to operate than comparable gas cars in many regions.
When are electric cars not cheaper?
Low‑mileage drivers
If you only drive 5,000–6,000 miles per year, your fuel and maintenance savings may not be enough to offset a higher purchase price or insurance cost on a new EV. In that scenario, a cheap, efficient used hybrid or gasoline car can be financially smarter.
Fast‑charging‑only lifestyles
If you live in an apartment with no workplace charging and must rely almost entirely on public fast chargers, your electricity cost per mile may approach, or exceed, gasoline for the same type of car. You still get the driving experience benefits, but the cost advantage shrinks.
- Higher insurance in some markets: Insurers are still learning how to price EV repairs, and some models carry higher comprehensive premiums than comparable gas cars.
- New EVs with big batteries: Large‑pack SUVs and trucks can have very high sticker prices. If you don’t drive many miles, the fuel savings can’t fully offset that upfront premium.
- Poorly‑priced new leases: Not all EV lease deals pass tax credits through to the lessee or price depreciation realistically. A badly structured lease can erase much of the economic advantage.
Battery uncertainty in older or unsupported models
Early EVs with small batteries and limited manufacturer support can be risky if bought far out of warranty with no independent battery‑health data. In that niche, the potential for a large repair can outweigh the low purchase price. This is exactly the problem Recharged’s battery health diagnostics are designed to solve.
How to run the numbers for yourself
Instead of debating in the abstract whether electric cars are cheaper, it’s more useful to plug your own numbers into a simple framework. Here’s how to compare an EV with a gasoline alternative in a way that reflects your real life.
5 steps to compare EV and gas costs
1. Estimate your annual mileage
Start with how much you actually drive. Look at last year’s odometer readings or fuel receipts. The more you drive, the more weight fuel and maintenance savings should get in your decision.
2. Calculate fuel cost per mile
For each candidate vehicle, estimate cost per mile. For a gas car, divide fuel price by mpg. For an EV, multiply efficiency (kWh per mile) by your electricity price, ideally your off‑peak home rate.
3. Add realistic maintenance
Use a rule of thumb: EVs around <strong>$0.03–$0.06 per mile</strong>, gas cars around <strong>$0.06–$0.10 per mile</strong>, depending on complexity. Factor in things like timing belts or turbochargers for specific gas models.
4. Consider depreciation and incentives
If you’re buying new, look at expected resale value in five years. If you’re buying used, recognize that <strong>much of the EV depreciation has already happened</strong>, which is why used EVs can be such good value.
5. Roll it into a monthly total
Add up monthly payment (or cash divided by years), fuel, maintenance, insurance and any EV‑specific fees. That total monthly cost is the best way to see whether an EV is cheaper for you.
How Recharged can help with the math
Because every vehicle on Recharged comes with a Recharged Score that includes battery health, degradation and fair‑market pricing, you can make a more accurate cost‑of‑ownership comparison between different EVs, and between an EV and your current gas car. Our EV specialists can also walk you through charging options and expected energy costs based on your home situation.
FAQs: why electric cars are cheaper
Frequently asked questions about EV costs
Bottom line: why electric cars are cheaper for many drivers
Electric cars are not universally cheaper in every scenario, but in 2025 the trend is clear: for many drivers, especially those who buy used and can charge at home, EVs deliver lower total cost of ownership than comparable gasoline cars. Cheaper energy per mile, fewer moving parts to maintain, and historically low used EV prices add up to meaningful savings over time. The key is to match the right EV to the right use case: enough annual miles to unlock fuel savings, access to affordable charging, and a clear understanding of battery health and warranty. That’s where Recharged comes in, combining battery diagnostics, fair pricing data and EV‑specialist guidance so you can capture the upside of electric ownership without flying blind. If you’re EV‑curious but unsure whether the numbers work for you, walking through a side‑by‑side cost comparison on a real car, new or used, will tell you more than any headline. For a growing share of shoppers, that comparison ends with the same conclusion: in the long run, electric cars really are cheaper.
