We all thought we knew the answer to, “Which is cheaper to drive 100 miles, an electric vehicle or a gas-powered vehicle?” The assumed answer is an EV, of course. But that is the wrong answer, it’s the gas-powered car that is cheaper. So what happened to the tenet that electric vehicles will save you more money than an internal combustion engine car?

What are the costs between EVs and gas-powered cars?

What has turned the EV world upside down is a report by Anderson Economic Group or AEG. It found that mid-priced electric cars cost more to run than similar gas-powered cars. However, this doesn’t apply to luxury EVs and ICE vehicles. 

Based on current prices, internal combustion cars need $11.29 of gas for every 100 miles driven. For electric, that goes up to $11.60. That’s if they charge their EV at home. For those that need to frequent charging stations, that number jumps up to $14.40. 

What is driving up the costs to drive EVs?

AEG factored into its pricing figures four types of expenses. The cost of fuel and electricity, state excise taxes for infrastructure costs, the cost to operate a gas pump or charger, and how much it costs to drive to a fuel station, called deadhead miles. EVs don’t have those infrastructure fees factored in. So some states are requiring an “EV registration fee” for parity.

“The run-up in gas prices made EVs look like a bargain during much of 2021 and 2022,” said AEG’s Patrick Anderson. “With electric prices going up and gas prices declining, drivers of traditional ICE vehicles saved a little bit of money in the last quarter of 2022.”

While 2020 saw larger gaps between prices, with gas-powered cars a lot cheaper to drive. But by mid-2022, with the large gas price increases, the ICE advantage went away. From the fourth quarter of 2022 to now, the numbers have flip-flopped, giving gasoline the edge once again. 

What about the cost to purchase EVs?

Electric vehicles also cost more to insure than ICE vehicles. That’s because of the higher costs of replacing damaged components. And while some shops do both cosmetic and mechanical fixes, in many cases, EVs must go to specialized shops for mechanical repairs. Specialty shops tend to charge more for their work. 

One last factor that is not part of the equation is the purchase price of electric vehicles. With popularity comes rising prices, as we saw last year when Tesla increased prices for its EVs almost weekly. Though EVs like the Nissan Leaf and Chevrolet Bolt offset the high EV prices, overall the price of EV admission costs more. And with the increase in EV popularity, prices will stay high. 

Which in Tesla’s case, is not happening at the moment. It has reduced its prices across the board as newer electrics have hit the marketplace creating more competition. That may be what keeps the lid on increasing costs, which will become clearer as we get further into 2023.