Cost of Owning an Electric Vehicle
How much does it actually cost to own an EV?
Similar to gasoline-powered vehicles, the total cost of ownership for an EV includes the up-front purchase or lease, fuel (electricity), maintenance, insurance, user fees, and depreciation.
For most Vermonters with home charging, the cost of driving electric is equivalent to less than $2/gallon. It can be much lower thanks to off-peak charging rates from many utilities. That means the more you drive, the faster your savings will add up. Consumer Reports estimates that EV owners typically save $6,000 to $10,000 over the life of the vehicle. Of course, that doesn't consider benefits like reduced planet-warming emissions or that EVs are often more fun to drive.
Ready to get down to details? Here are some key factors to help you understand how EV expenses stack up to those of a typical gas-powered vehicle.
EV costs
-
The price point of EVs has come down significantly in recent years and is expected to keep falling as more EVs hit the market and more used EVs become available. That said, EVs still tend to have higher sticker prices than similar gas-powered cars.
A variety of incentives can significantly reduce the upfront cost of an EV. By combining the available incentives, you may be able to reduce your purchase or lease expenses by $10,000 or more. With that price adjustment, the cost of taking home an EV becomes far more competitive with the cost of a gas-powered car. In some cases, it’s even cheaper.
Leasing is a good option for Vermonters who want to use an EV without having to worry about some of the unknowns of ownership, like resale value. Additionally, shorter lease terms offer ready access to new technologies as they become available. Leases are incentive-eligible, too. Most car dealerships can directly apply federal and some utility incentives at the time of purchase or lease.
- Additional resources
- Learn about leasing
- Find a used EV
- View incentives
-
When it comes to filling up the tank, driving an EV in Vermont is equivalent to paying about $1.75 per gallon of gas. The cost of electricity when charging at home is much more stable than the cost of gas, so it's easier to project your annual fuel costs.
The average Vermonter could save more than $670 a year on fuel, based on the average prices of gas and electricity over the past year. That savings can increase if your utility offers reduced rates for off-peak charging. For example, Burlington Electric Department’s EV rate is about half of the average residential rate in Vermont. To access those rates, you typically need a level 2 charger at home.
- Additional resources
- Calculate the cost of your commute
- Charging at home
-
All-electric vehicles have a fraction of the number of moving parts found in gasoline vehicles. That means no oil changes, no spark plugs, and no catalytic converters or other emissions equipment. They also do without transmissions, which is a huge sigh of relief for anyone who has ever had to shell out to repair a burned-out gear box.
Fewer moving parts means fewer opportunities for parts to fail, and you know what that means: less of your hard-earned paycheck spent at the repair shop. In fact, a Consumer Reports study found that lifetime maintenance costs for EVs is about half as much as those of gas-powered cars.
The only regular maintenance most EV drivers do is occasionally rotating the tires (or seasonal changeovers for winter tires) and filling up the windshield washer fluid. Seriously, that's it.
Plug-in Hybrid Electric Vehicles (PHEVs) have internal combustion engines but still require less maintenance than typical gasoline cars since the engines are used less often.
- Additional resources
- More about EV maintenance
-
On average, EV insurance costs $44 more per month than gas-powered vehicles. One reason is that the purchase price of an EV is generally higher. Another reason: The EV repair market is still in its infancy, so there are fewer shops with the specialized labor and replacement parts required to repair EVs. Cars with automated driving capabilities, like Teslas, also contain more technology, which can further increase insurance costs.
-
EV batteries are typically covered by warranties for 8 to 10 years or 100,000 to 150,000 miles, whichever comes first. Current data indicates many EV batteries will last the life of the vehicle and never need replacing. In the unlikely event that you’re faced with the need to replace an out-of-warranty battery system, it could cost $5,000 to $10,000 or more. Battery prices are expected to drop considerably in years to come, as EVs become more mainstream and battery technology improves. If you’re considering a used EV, make sure you know the condition of the battery before purchasing.
In some cases, a marked drop in EV range can be caused by a small number of individual cells within the EV battery pack. Automakers and independent companies are developing new businesses to refurbish or remanufacture these cells at a lower cost than a full replacement.
If you do reach the end of the road with an EV battery, you might be able to sell it. EV batteries usually have substantial energy storage capacity even after the end of their useful life in vehicles. Markets are emerging for their use in stationary energy storage. For example, the business consulting firm McKinsey & Company published an article on second life applications for EV batteries to support different aspects of electric grid operations.
- Additional resources
- Learn more about batteries
-
EVs running on electricity don’t contribute to state or federal gasoline taxes. As a result, many states have established additional EV registration fees to support transportation infrastructure. Starting in January 2025, the State of Vermont is collecting an additional $89 per year for all-electric cars and $45 per year for plug-in hybrids. The funds will be used to build more EV charging in Vermont.
The Vermont Agency of Transportation (VTrans) is also considering a mileage-based user fee (MBUF) that would be based on annual mileage as reported through vehicle inspection odometer readings.
- Additional resources
- See Vermont's research into EV fees
-
You know what they say about cars depreciating as soon as they drive off the lot? Well, EVs aren't exempt. In fact, EVs may depreciate more quickly than gas-powered cars, especially when incentives for new EVs are only available to the original purchaser. The good news is that newer EVs with longer ranges seem to be retaining their value better than some of the older models. If you’re planning to sell the vehicle within the first few years of ownership, you may want to consider leasing, which can help protect you from large drops in resale value.