Transportation prices account for about one-fifth of all expenditures for the typical American family, the second-largest expense after housing, in response to the U.S. Division of Power. Switching from a gas-powered automotive to an electrical car (EV) may save drivers about $1,000 per 12 months on gasoline prices, however the financial savings depend upon how they cost their vehicles.
Gasoline vehicles, also referred to as inside combustion engine (ICE) autos, have lengthy been the extra economical possibility for drivers. EVs are presently dearer to purchase (new ones value 17% greater than new ICE autos), dearer to repair (restore prices are about $950 larger per declare than for ICEs), and dearer to insure (11% larger full-coverage prices than ICEs).
Nonetheless, with environmental issues on the prime of many customers’ minds, one in 5 U.S. households is solely contemplating a hybrid or EV as their subsequent car.1 Excessive gasoline costs and low home-charging prices could push drivers towards EVs for long-term financial savings, however an absence of home-charging house and its set up prices are among the many prime obstacles to EV adoption.2
Insurify carried out a state-by-state evaluation of gasoline and charging prices and pulled car insurance rates from its database of greater than 97 million quotes to find out the place within the U.S. it’s cheaper to drive an EV than an ICE car.
Residence charging is cheaper than filling up your tank in each state
Charging an EV at house is cheaper than fueling a gas-powered car in each state, in response to AAA information on common common gasoline costs from June 17, 2024.4
Common gasoline prices $1,724 per 12 months, assuming an annual mileage of 13,456 miles and a gasoline financial system of 26.9 mpg. Residential charging prices 56% much less, at $753 per 12 months, assuming the identical annual mileage and an EV electrical energy use of 0.35 kWh per mile.
Washington residents, who noticed common gasoline costs of $4.35 as of mid-June 2024, save essentially the most by driving an EV and charging at residence, at $1,657 per 12 months. Massachusetts residents noticed the smallest distinction between residence charging and gasoline, at $341 per 12 months. The state additionally has the third-highest residential electrical energy prices within the U.S., at $0.29 per kWh, in response to EIA information.
AAA publishes state-by-state gasoline costs however not historic information, so true annual financial savings could also be decrease resulting from seasonal fluctuations. Insurify’s information scientists subsequent analyzed 2023’s common gasoline costs from the EIA, which publishes information for U.S. areas and choose states, to find out how seasonality impacts the price of driving an EV vs. an ICE.
Gasoline costs nonetheless surpass residence charging after factoring in seasonality
Charging an EV at house is cheaper than fueling a automotive in each state, in response to AAA’s information from June 17, 2024, however gasoline costs are highest in the summertime, with gasoline blends formulated for hotter months.
Insurify’s information science crew used 2023 EIA gasoline worth information to regulate for seasonality. The EIA doesn’t publish gasoline information for each state, however the development holds throughout areas when taking a look at common annual gasoline costs from 2023.
Residence charging could also be low cost, however setting it up will not be
The nationwide common value of putting in a Stage 2 wall-mounted EV charging system is $1,200, in response to the contractor estimates web site Fixr.5 However putting in residence charging stations can have hidden prices, which might convey the entire set up worth to $6,400 or extra.
Residential chargers typically require electrical work, particularly in older houses. Upgrading breaker containers and electrical panels prices between $850 and $4,000, and putting in larger amperage circuits provides one other $600 to $1,200.6 EV drivers who can’t afford a brand new system can depend on public charging stations, however they’ll pay greater than double what it prices to cost at residence.
Public charging is dearer than gasoline in all however 9 states
The common annual value of DCFC public charging within the U.S. is $2,025, in comparison with $1,818 per 12 months for gasoline prices, in response to an evaluation of Secure Insights and EIA information.
The West Coast is the one U.S. area the place public charging is cheaper on common than gasoline, EIA information exhibits. West Coast drivers pay greater than common for public charging, at $2,261, but in addition face higher-than-average gasoline costs, at $2,316 per 12 months.
Public charging stations want to achieve a 15% utilization price to realize profitability, in response to Secure Insights.7 The West Coast’s larger EV adoption price ends in higher charger utilization and decrease charging prices.
In California, 2.5% of registered vehicles are EVs, with 22 EVs for each DCFC charging port.8 Californians pay $39 much less yearly to cost an EV at a public station than to gasoline the typical ICE.
Authorities incentives additionally scale back public charging prices in California, the place workplaces that set up Stage 2 charging stations are eligible for $3,000 off the acquisition and set up of every unit, as much as $60,000 per web site.
When drivers solely have entry to public charging stations, driving a gas-powered automotive is extra economical in most states.
AAA information from mid-June 2024 exhibits public charging is cheaper than gasoline in eight states — California, Iowa, Mississippi, Nebraska, North Dakota, Oregon, Wisconsin, and Wyoming. The EIA’s 2023 gasoline worth information suggests Washington drivers additionally save barely ($58 yearly), for a complete of 9 states the place public charging is cheaper than gasoline. Nebraskans save essentially the most on public charging vs. gasoline, at $586 per 12 months. Nebraska is the one state within the U.S. during which all electrical energy utilities are publicly owned by public energy districts, municipal energy programs, or electrical cooperatives. Nebraska’s electrical charges are the fifth most cost-effective within the nation at $0.11 per kWH.
The gasoline information within the desk beneath are from AAA and mirror costs as of June 17, 2024.
How a lot it prices to cost common EV fashions
The common EV makes use of 0.35 kWh of electrical energy per mile.9 The common American drives 13,456 miles per 12 months, which places the typical value of residence charging at $753 per 12 months. EV drivers utilizing public charging stations pay 2.7 occasions as a lot, at a mean of $2,025 yearly.
EV effectivity varies. The Tesla Mannequin 3 makes use of simply 0.25 kWh of electrical energy per mile, so its common residential charging value is simply $538 per 12 months. However, the heavy-duty Ford F-150 Lightning makes use of 0.48 kWh per mile, so the typical residence charging value is almost double, at $1,032 yearly.
General, it’s cheaper to personal an EV than an ICE — however provided that you’re residence charging
Insurify’s information science crew in contrast the price of powering 5 common EVs to fueling 5 comparable ICEs utilizing Secure Insights information on public DCFC charging prices and 2023 EIA information on residential electrical and gasoline costs. Insurify additionally factored in common annual insurance coverage charges to learn how the entire value of driving an EV compares to gas-powered vehicles.
Whereas insuring a gas-powered car is 11% cheaper than insuring an electrical automotive, EV drivers with home-charging setups nonetheless save a whole bunch of {dollars} extra per 12 months as a result of gasoline is dearer than residential electrical energy.
Buddy Parkhurst, a licensed insurance coverage agent at Insurify, explains: “There are a number of causes for larger insurance coverage pricing on EVs. Tesla autos are highly regarded proper now — the No. 1 EV that Insurify quotes. Most Tesla autos can journey one-quarter of a mile from a lifeless cease in 10 seconds. Different EVs are comparable in energy, which dictates a higher-risk premium. EVs are additionally costly to restore, particularly if the battery, or batteries, are broken in an accident.”
Public charging remains to be cheaper for extremely environment friendly EVs than gasoline is for comparable ICEs, however the financial savings are a lot decrease. The excessive value of public charging makes powering much less environment friendly EVs dearer than fueling comparable gas-powered vehicles.
Factoring in Tesla Mannequin 3’s common annual full-coverage price of $3,551, insuring and charging the EV at residence prices a complete of $4,089 per 12 months. The comparable gas-powered Mercedes-Benz A-Class prices $3,445 to insure and $1,746 to gasoline yearly, making the entire value $5,191 — 27% larger than the Mannequin 3.
However these Tesla Mannequin 3 financial savings lower for drivers who use public charging stations. The common annual value of public charging for a Mannequin 3 is $1,447, which raises the entire value to drive it to $4,998 per 12 months — simply 4% lower than the Mercedes-Benz A-Class.
In one other instance, Insurify in contrast two Ford fashions: the F-150 Lightning (an EV) and the F-Sequence truck (an ICE). If charged at residence, the Lightning prices a mean of $1,032 yearly, whereas the F-Sequence prices $2,445 to gasoline — a 137% improve.
If an F-150 Lightning driver depends on public charging, they’ll find yourself paying a mean of $2,777 for the Lightning, which is 169% greater than charging at residence and 14% greater than fueling an F-Sequence. Full protection for a Ford F-150 Lightning additionally averages $422 extra per 12 months than insurance coverage for a gas-powered F-Sequence pickup.
Methodology
Insurify’s information science crew used public charging information from Secure Insights, 2023 gasoline worth information for areas and choose states from the EIA, 2023 residential electrical information from the EIA, and common gasoline worth information from AAA. State-level AAA information displays common gasoline costs as of June 17, 2024. EIA gasoline worth information are for all gasoline formulations.
Insurify calculated annual prices based mostly on a yearly mileage of 13,456 miles, the U.S. common in response to the Federal Freeway Administration. Gasoline prices are for autos with a gasoline financial system of 26.9 mpg, which is the typical for ICEs, in response to the EPA. Electrical prices mirror an EV that makes use of 0.35 kWh/mile, the typical per EnergySage.
Insurance coverage charges mirror 2023 Insurify information for drivers between 20 and 70 with a clear driving document and common or higher credit score. Autos are from the mannequin years 2019 to 2024. View and obtain extra automotive insurance coverage information at Insurify’s Auto Insurance Data Center.
