One of the key factors holding back US electric vehicle adoption is that EVs’ price tags remain higher, on average, than their internal combustion engine counterparts.
In May, the average transaction price for new EVs was $57,734, according to Cox Automotive, which represents a nearly $10,000 price gap between EVs and ICE vehicles.
But truly understanding the cost proposition of EV ownership may require taking the long view.
A new analysis by Atlas Public Policy compared the cost of owning the five most popular ICE models in the US last year to similar EVs. The report examined the total cost of ownership over a seven-year period and took into account purchase price, federal and manufacturer incentives, fuel or electricity costs, insurance, taxes and fees, resale value, and maintenance and repair costs.
The findings suggest that “in all but one case, EVs today deliver savings to owners compared to a similar gasoline vehicle.”
Let’s compare: In the compact sedan segment, the analysis found the 2025 electric Nissan Leaf delivered estimated net savings of $2,098 over this year’s Toyota Corolla. For sedans, owners of the 2025 electric Hyundai Ioniq 6 could save $3,340 over seven years compared to the 2025 Toyota Camry, per the report.
For compact SUVs, researchers were able to make as close an apples-to-apples comparison as possible, with the Chevy Equinox EV costing owners an estimated $9,483 less than the gas-powered Equinox. And the Tesla Model Y demonstrated more than $8,000 in savings compared to the Jeep Grand Cherokee.
“That’s even before you count any gas price spikes in states that might have higher gas prices than the national average that we factored in, or for people that drive a lot more than the national average of 11,000 miles,” Daniel Wilkins, a policy analyst at Atlas, told Tech Brew. “So you can see savings with EVs that you might not have considered beforehand.”
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The only category in which ICE vehicles won out on total cost of ownership was pickups: The gas-powered F-150 was shown to be about $2,500 cheaper than the electric F-150 Lightning.
The report’s authors noted that transportation is the second biggest expenditure for Americans after housing, and that over 90% of American households have at least one vehicle.
An analysis by RMI earlier this year similarly showed that for commercial fleets, EVs often are more “economical” than “equivalent fossil fuel vehicles,” but noted that the total cost of ownership for commercial EVs would increase without federal tax credits.
Headwinds: Now, those federal tax credits for EV purchases, one of the primary tools used to bring EV prices closer in line with gas-powered vehicles, are going away as part of Trump’s “One Big Beautiful Bill Act.”
Atlas’s analysis noted that the loss at the end of September of the $7,500 tax credit for new EV purchases is likely to “raise the upfront cost of EVs in the near term,” though it found that the Chevy Equinox EV and Tesla Model Y would still have lower total costs of ownership. Analysts have said that eliminating the tax credits, along with other federal policy changes, is likely to slow EV adoption in the coming years.
“If you’re shopping for a new car right now, and the EV model that you want still qualifies, the next three months might be key to lock in the full discount,” Wilkins said. “But even after the credit goes away, an EV can still save money, and even more so if you drive a lot and charge mostly at home and live in a state with higher gas prices.”