Why Buying an EV Can Potentially Save You Money

The number of consumers interested in buying an electric vehicle has plummeted, even as research shows that electric vehicles can save drivers thousands of dollars a year.

Only 18% of Americans said they were “very likely” or “likely” to buy an EV, down from 23% last year, according to a new AAA report.

So why the drop in interest? The early adopters who drove demand in previous years already bought their EVs, leaving automakers to compete for the more skeptical fraction of consumers, the report said. Higher sticker prices and concerns about running out of charge while on the road are also dissuading Americans from going electric.

But research shows that budget-conscious drivers could benefit from embracing electric vehicles…

Save Money, Save the Planet

Even if you’re taking steps to improve your gas mileage, such as monitoring your speed and tire pressure, and driving a fuel-efficient car to begin with, gas bills can strain your budget. On average, households spend 3.3% of their annual income on gasoline, a report from the U.S. Department of Energy (DOE) said.

Breaking down data at the state and zip-code level, the DOE estimated fuel savings by looking at local gas prices, the most popular type of vehicle in each region, and how often people drove. Based on this, drivers can expect to save on average $2,200 a year on fuel costs by switching to an EV. They can save even more in some western states, including Idaho and Wyoming, thanks to a combination of high gas prices and low electricity prices.

Falling Prices

That said, EVs still cost around $10,000 more than gas vehicles, according to a Cox Automotive report, citing data from Kelley Blue Book. But they’re getting less expensive. This year, Tesla’s (TSLA) price cuts put downward pressure on prices across the industry. That also trickled down to used EVs, whose prices have fallen by 13% over the last year.

Once you factor in tax incentives, including a federal credit of $7,500 for qualified new EVs and $4,000 for used ones, the price difference between electric and gas vehicles narrows. And with the number of charging stations more than doubling since 2020, EVs have become an increasingly viable option for American drivers. It’s now on automakers to convince buyers they’re as affordable and convenient as gas vehicles.

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