Is it Cheaper to Drive an EV than Gas Cars?

As the automotive industry is transforming and adapting to sustainability, a debate has emerged concerning electric vehicles (EVs) versus gasoline-powered cars. One of the main questions people ask is: Is it cheaper to drive an EV than gas cars? To find out the answer, we will take a deep dive into an in-depth analysis that examines real-world examples and data findings. By the end of this exploration, we will uncover whether driving an EV can be more budget-friendly than its gasoline counterparts. Let’s begin our journey through automotive economics and find out if EVs are the better choice.

Is it Cheaper to Drive an EV than Gas Cars?

Cost of Electricity vs. Gasoline

When evaluating if it’s cheaper to drive an EV than gas-powered vehicles, it’s essential to factor in the disparity between electricity and gasoline costs. Electric vehicles rely on electricity instead of petrol or diesel, so they can offer more economical operation in certain regions due to lower energy expenses. This discrepancy becomes particularly pronounced when contrasting EVs with gasoline cars in countries with elevated gasoline prices, such as Norway, the Netherlands, and Germany. Similarly, in specific areas of Canada where electricity prices are affordable, such as regions in Ontario or Quebec, drive an EV can lead to notably reduced operating costs compared to a gasoline car.

It’s also important to remember that electricity costs tend to remain fairly stable over time, whereas fuel prices can fluctuate drastically due to domestic and international market fluctuations. EV owners can expect consistent, predictable costs over the long term, a reassuring factor when budgeting travel expenses.

It’s commonly observed that electricity rates tend to be more budget-friendly during off-peak hours compared to peak demand periods. This presents an opportunity for individuals who charge their EVs during night time hours or other periods of minimal energy consumption. By doing so, they can tap into the advantage of lower electricity rates, ultimately resulting in the fact that it’s cheaper to drive an EV.

Initial Purchase Price: EVs vs. Gasoline Vehicles

Our journey begins with the crucial factor of the initial purchase price, a pivotal determinant of overall ownership cost. For this comparison, we’ll focus on one of the most popular EV model-Tesla Model 3 and its gasoline rival Acura TLX at base trim.

Factoring in purchase prices, including destination charges, we find the following figures:

• Tesla Model 3: $54,990
• Acura TLX: $52,500

This initial snapshot highlights the discernible premium associated with electric vehicles, which shapes the financial feasibility of transitioning to EVs.

Energy Efficiency: Quantifying Consumption

The average annual distance traveled in Canada is around 15,200 kilometers, according to Natural Resources Canada‘s Office of Energy Resources.

While energy efficiency is a pivotal facet of cost analysis. By consulting the EPA’s metrics on liters gallons and kilowatt-hours used per 100 km, we estimate energy consumption efficiency. Lower values signify greater efficiency. Comparing our chosen models, we find the following figures:

• Tesla Model 3: 13.1 kWh / 100 km
• Acura TLX: 10.9 liters  / 100 km

The Tesla Model 3 is an electric vehicle, and its energy consumption is measured in kilowatt-hours (kWh) per 100 kilometers (km). The Model 3’s energy consumption can vary based on factors like driving conditions and speed. Let’s assume an average energy consumption of 15 kWh per 100 km for the Tesla Model 3:

• Annual Energy Consumption = (15,200 km / 100 km) * 15 kWh = 2,280 kWh
• Electricity Cost (The average electricity cost in Canada $0.15 per kWh) = 2,280 kWh * $0.15/kWh = $342

The Acura TLX is a gasoline-powered vehicle, and its fuel efficiency is typically measured in liters per 100 kilometers (L/100 km). Let’s assume an average fuel efficiency of 10.9 L/100 km for the Acura TLX:

• Annual Gasoline Consumption = (15,200 km / 100 km) * 10.9 L = 1,657 L
• Gasoline Cost (The average price $1.82 per liter during the period of August 2023) = 1,657 L * $1.82/L = $3,015

These figures underscore the innate efficiency of electric vehicles, a vital element in long-term cost savings.

Maintenance Costs: EV Efficiency

The maintenance dimension offers clear advantages for driving an EVs over their gasoline counterparts. Electric vehicles like the Tesla Model 3 generally have fewer moving parts and simpler mechanical systems compared to gasoline vehicles. This can lead to lower maintenance costs over time. Common maintenance tasks for the Model 3 might include tire rotations, brake fluid replacements, and cabin air filter changes.The absence of oil changes and fewer wear-and-tear components can contribute to reduced maintenance expenses.The reduced maintenance needs of EVs position them as cost-effective choices over time.

Depreciation: A Critical Element

Depreciation significantly shapes ownership costs. The higher initial cost of EVs can translate into steeper depreciation rates. 

The Tesla Model 3 retains approximately 90% of its value after three years, depreciating less slowly than any other electric vehicle. The value of the Tesla Model 3 drops by only 10% after the first three years, which is an unusually low depreciation rate.

On average, luxury vehicles like the Acura TLX tend to experience a higher rate of depreciation compared to some other vehicle types. It’s estimated depreciation rate is around 19% of its initial value within the first 3 years.

Depreciation figures for the three years are as follows:

• Tesla Model 3: $5,500
• Acura TLX: $9,975

Is it Cheaper to Drive an EV? 

Considering all variables from our calculation above, we uncover compelling insights into ownership costs. The fully electric Tesla Model 3 emerges as a more budget-friendly option, costing $2,673 less in energy consumption per year than its gas counterpart, even without considering the maintenance cost.

While the initial purchase of the Model 3 is $2,490 higher, we did not factor in the EV incentives in the upfront cost in our calculation. With the Federal EV rebate, the initial purchase price will be reduced by a significant $5,500. Provincial incentives will also further contribute to the reduce the purchase cost.

In the long run, EVs offer cost-effective solutions for individuals seeking reliability and affordability. While upfront expenses are higher than traditional vehicles, ownership costs over time provide a compelling case for electric cars. Maintenance needs decrease, fuel costs drop drastically, charging expenses remain manageable, and tax incentives reduce sticker prices. By considering all relevant factors and analyzing their relative weights in a given context, prospective EV owners can make informed decisions, as it might be correct that it’s cheaper to drive an EV.

As always, Carnex can provide you with detailed information about buying and owning electric vehicles in Canada.

Carnex is the top online EV expert in Canada for buying and selling electric vehicles in Ontario.

Looking to buy a EV and want to save money? Get the best used electric vehicle deals at Carnex!

Visit Carnax today and discover the best deals on best-selling EV in Canada.

More from Carnex Blog:

The Benefits and Drawbacks of Buying a Used EV in Canada: What You Need to Consider

Should you charge your electric vehicle every night? Here are what you should know

Will Buying an Electric Vehicle Save You Money?

Learn more about the benefits of buying from Carnex. We believe that all clients deserve to know the good and bad of what they’re buying. Because we wanted to know these when we bought cars. That’s why at Carnex.ca, we will proudly display every detail every step of the way. Browse all the best cars, automobile buying tips, auto insurance, young drivers, driving techniques, auto industry trends from Carnex Blog.