Auto guide
Do electric cars actually save money?
Fuel and maintenance are genuinely cheaper. Depreciation has been worse, and the federal credits have ended. Here is what the comparison looks like now that the incentive is gone.
The running costs of an electric car are lower, and that part is not in dispute. What decides whether one saves you money is everything around the running costs — the purchase price, the resale value, and until recently a federal tax credit that is no longer there.
The federal credits have ended
Start here, because a great deal of advice written before 2025 assumes a credit that no longer exists.
Public Law 119-21, enacted 4 July 2025, terminated all three federal clean vehicle credits early:
- New clean vehicles (section 30D), worth up to $7,500 — not available for vehicles acquired after 30 September 2025.
- Previously-owned clean vehicles (section 25E), worth 30% of the sale price up to $4,000 — same cutoff, 30 September 2025.
- Charging equipment (section 30C), worth 30% of the cost up to $1,000 per item for a home installation — this one runs slightly longer, and the property must be placed in service before 1 July 2026.
"Acquired" has a specific meaning for the vehicle cutoffs: entering into a binding written contract and making a payment on or before the date. A vehicle placed in service after the cutoff can still qualify if it was acquired on or before it — which is why a small number of later deliveries were still eligible.
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Where an EV genuinely saves
Fuel. The comparison depends heavily on your electricity rate and where you charge. Home charging at residential rates is where the saving lives. Public DC fast charging is frequently priced close to the per-mile cost of gasoline, which means a driver without home charging may see very little fuel saving at all — and that assumption is buried in most EV cost comparisons.
Maintenance. Genuinely lower. No oil changes, no timing belts, no exhaust system, no spark plugs, and regenerative braking means brake pads last much longer. Tires wear faster, because EVs are heavier and torquier, which offsets part of it.
The EV savings calculator lets you set your own electricity price and charging mix, which matters more than any other input.
Where an EV has cost more
Depreciation. Over five years, electric vehicles have depreciated 57.2% against 41.8% across all vehicles (iSeeCars, March 2026).
That is a large gap, and on a $45,000 car it is worth roughly $7,000 of extra depreciation over five years — which can exceed several years of fuel savings on its own.
The reasons are structural rather than mysterious: rapid improvement in new models makes older ones less attractive, battery health is hard for a used buyer to assess, and the federal used-vehicle credit that once supported used EV prices has now gone too.
Note the comparison is against an all-vehicle average that itself includes EVs and hybrids, so the gap against a gas-only comparator is if anything wider.
The charger
Home charging is where the fuel savings come from, so the installation is part of the purchase, not an extra. Costs vary enormously — a simple install near an existing panel is modest; a long run, a panel upgrade or a detached garage can be several thousand dollars.
Get a quote before deciding, and if you are installing before 1 July 2026, the section 30C credit may still apply.
What to do with this
- Can you charge at home? If not, the fuel saving largely evaporates and the rest of the case has to carry the decision on its own.
- What is your actual electricity rate, including any EV time-of-use tariff? This is the highest-leverage input in the whole comparison.
- What is the realistic resale value? Use recent actual prices for the model, not a general depreciation assumption.
- What is the price gap against the comparable gas model, after any state or utility incentive?
- How long will you keep it? The fuel and maintenance savings accumulate linearly; the depreciation gap lands whether you keep it three years or eight.
An EV can still come out ahead, particularly for a high-mileage driver with home charging who keeps cars a long time. But the federal credit was doing a lot of the work in that calculation, and it is gone. Run it with today's numbers rather than an article written while the credit still existed.
Sources: credit terminations from IRS, credits for new clean vehicles, used clean vehicle credit and alternative fuel vehicle refueling property credit, implementing P.L. 119-21. Depreciation figures from iSeeCars' study of 950,000 five-year-old used cars sold March 2025 to February 2026, published 24 March 2026. All dates and figures read from the same constants the calculator uses.