How Much Will an EV Cost Me Compared to a Gasoline Car?

How Much Will an EV Cost Me Compared to a Gasoline Car?

Many Canadians today are attracted by the notion of bypassing the gas pump, lowering their carbon footprint, and enjoying a quieter, more comfortable ride. However, a critical question remains in the minds of potential EV buyers: “How much will an EV really cost me compared to a traditional gasoline car?” This is a reasonable concern, as the financial implications go far beyond the initial sticker price. This involves a comprehensive look at not just the upfront cost but also ongoing vehicle expenses like “fueling” (charging), maintenance costs, and the often-overlooked factor of depreciation. 

This article aims to provide a full breakdown of EV ownership expenses, as well as practical tips focused exclusively on Canadian EV ownership. By the end, you should have a clearer picture of the long-term financial commitment involved in owning both types of vehicles, empowering you to make an informed decision that fits your budget and lifestyle.

More from Carnex Blog:

Best Electric Vehicles of 2023 and 2024 in Canada

Future EVs: 11 New EVs and Hybrids Coming in 2024

Will Buying an Electric Vehicle Save You Money?

How Much Will an EV Cost Me Compared to a Gasoline Car?

Upfront Costs and Benefits of Electric Cars in Canada

When considering the switch to an electric car, the most immediate financial consideration for many Canadian buyers is the upfront cost. It’s a widely held perception that EVs carry a significantly higher price tag than their gasoline-powered counterparts, and historically, this has often been true. 

The battery pack, a sophisticated and resource-intensive component, constitutes a substantial portion of an EV’s manufacturing cost. However, the narrative surrounding the initial purchase price is becoming more nuanced, particularly in the Canadian market, thanks to a combination of evolving manufacturing efficiencies, a wider range of available models, and government incentives. Understanding these factors is key to accurately assessing the true entry point into EV ownership.

Firstly, let’s address the sticker price. Generally, if you compare a base model EV with a similarly sized and equipped gasoline car, the EV will likely have a higher Manufacturer’s Suggested Retail Price (MSRP). For example, a compact electric SUV might be several thousand dollars more expensive than its gasoline equivalent from the same brand or competitor. This difference can be a significant psychological and financial barrier for some. 

However, it’s important to look beyond the base MSRP and consider the trim levels and features. Many electric cars come with a higher level of standard equipment, including advanced driver-assistance systems (ADAS), larger infotainment screens, and premium interior finishes, which, if optioned on a gasoline car, would narrow the price gap. The market is also diversifying. While early EVs were often positioned in premium segments, we are now seeing a growing number of more affordable plug-in cars and fully electric models designed for the mass market, making them more accessible.

On the other hand, the availability of government rebates in Canada has a game-changing impact on upfront prices. The federal government’s Incentives for Zero-Emission Vehicles (iZEV) Program offers a point-of-sale incentive of up to $5,000 for new eligible battery-electric, hydrogen fuel cell, and longer-range plug-in hybrid vehicles. Shorter-range plug-in hybrids can receive up to $2,500. There are specific MSRP caps for vehicles to be eligible: base models of passenger cars must have an MSRP under $55,000, while higher trims can qualify up to $65,000. For station wagons, pickup trucks (light trucks), SUVs, minivans, vans, and special purpose vehicles, the base model MSRP cap is $60,000, with higher trims eligible up to $70,000. This federal incentive can dramatically reduce the initial financial outlay.

Furthermore, several Canadian provinces offer their own additional rebates, which can be stacked with the federal iZEV program, leading to substantial savings. Quebec is a leader in this regard, offering rebates of up to $7,000 for new fully electric vehicles. British Columbia provides rebates of up to $4,000 through its CleanBC Go Electric Passenger Vehicle Rebate Program, with income-tested eligibility. Nova Scotia, New Brunswick, Prince Edward Island, and Newfoundland and Labrador also have provincial incentives, though the amounts and eligibility criteria vary. For instance, Nova Scotia offers up to $3,000 for new EVs and $2,000 for used EVs. Prospective buyers should research the specific incentives available in their province of residence, as these can make a profound difference in the perceived upfront cost disadvantage of electric cars. When these combined federal and provincial subsidies are taken into account, the price gap between an EV and a comparable gasoline car can be significantly reduced, and in some situations, particularly for certain models and in generously rebated provinces, the EV might even approach price parity.

In summary, while the initial MSRP of an electric car may appear higher, Canadian buyers must look at the bigger picture. The significant federal and provincial rebates available can substantially lower the net upfront cost. When comparing, ensure you’re looking at vehicles with similar features and specifications. Don’t be put off by the initial sticker surprise; instead, look into all available incentives and compare vehicle models and features side by side. The true acquisition cost of many plug-in automobiles in Canada is frequently significantly lower than just looking at MSRPs suggests.

How Much Will an EV Cost Me Compared to a Gasoline Car?

EV Charging Costs vs. Gasoline Fueling in Canada

After you’ve covered the upfront cost of electric vehicles, the next significant recurring vehicle expense is “fueling.” For traditional internal combustion engine (ICE) vehicles, this means regular trips to the gas station, a cost that fluctuates with global oil prices and local market conditions. For electric cars, “fueling” translates to charging the battery, and this process presents a very different cost structure, one that is generally more stable and often significantly lower, particularly for Canadian drivers who can leverage relatively inexpensive residential electricity rates. 

The primary way most Canadian EV owners will charge their vehicles is at home. This offers unparalleled convenience—plugging in overnight and waking up to a “full tank” every morning. Home charging typically utilizes Level 1 or Level 2 chargers. Level 1 charging uses a standard 120-volt household outlet and is the slowest method, adding about 6-8 kilometres of range per hour. While slow, it can be sufficient for drivers with short daily commutes or for plug-in hybrids with smaller batteries. The equipment needed is usually included with the car. 

Level 2 charging, which uses a 240-volt outlet (similar to what an electric stove or dryer uses), is much faster, adding 30-50 kilometers of range per hour, making it the preferred home charging solution for most battery electric cars. The installation of a Level 2 charger by a certified electrician can cost between $1,000 and $2,000 (or more, depending on the complexity of the installation and panel upgrades needed), but some provinces, like Quebec and British Columbia, offer rebates to help offset this expense.

The actual charging cost at home depends on two main factors: the electricity consumption rate of your EV (measured in kilowatt-hours per 100 kilometers, or kWh/100 km) and your local residential electricity price (cents per kWh). Canadian electricity rates vary significantly by province. For example, Quebec and Manitoba boast some of the lowest rates in North America (often below 8 cents/kWh), while rates in Ontario and Alberta can be higher and may include time-of-use pricing, where charging overnight can be cheaper. 

Let’s look at an example: if an EV consumes 20 kWh/100 km (a common efficiency for many models) and your electricity rate is $0.10/kWh, it would cost $2.00 to drive 100 km. If you drive 20,000 km per year, your annual home charging cost would be approximately $400.

Now compare this to a gas-powered car. Let’s assume a comparable gasoline car has a fuel efficiency of 8 L/100 km. If gasoline prices average $1.70/L (a conservative figure in many parts of Canada recently, and subject to significant fluctuation and regional carbon taxes), driving 100 km would cost $13.60. 

For the same 20,000 km annually, the gasoline cost would be $2,720. In this scenario, the EV owner saves $2,320 per year on fuel alone. Over a typical 5-10 year ownership period, these savings on ownership expenses become incredibly substantial. Even in provinces with higher electricity rates, the cost per kilometer for an EV is almost always considerably lower than for a gasoline vehicle. Many utility companies in Canada are also exploring or implementing special EV charging rates or programs, which could further reduce these costs.

Public charging is another aspect of the EV charging cost equation. While the vast majority of charging (over 80-90%) is done at home or at work, public chargers are essential for longer trips or for those without dedicated home charging. Public charging stations come in two main types: Level 2 (similar to home chargers, often found in shopping plazas, workplaces, and municipal parking lots) and DC Fast Chargers (DCFC) or Level 3 chargers. DCFCs can add hundreds of kilometers of range in 20-60 minutes and are crucial for intercity travel. 

The cost of public charging varies. Some Level 2 stations are free, and offered as an amenity. Others charge by the hour or by kWh consumed. DC Fast Charging is generally more expensive than home charging, often priced per minute or per kWh, and rates can range from $0.20/kWh to over $0.60/kWh, or 10-30 per hour of connection time, depending on the network (e.g., Petro-Canada, Electrify Canada, FLO, ChargePoint, Tesla Superchargers) and charging speed. While more expensive than home charging, it’s still often competitive with, or cheaper than, gasoline for the equivalent range added, especially on long trips where time is a factor. However, relying solely on public DC fast charging would significantly increase your “fueling” vehicle expenses compared to primarily charging at home.

The impact of Canada’s carbon pricing mechanism on gasoline costs also plays an increasingly important role. The federal carbon tax adds to the per-liter cost of gasoline, and this tax is legislated to increase annually. This means the cost advantage of electric cars in terms of “fueling” is likely to widen further over time, making the lifecycle cost of EVs even more attractive. Conversely, electricity prices, while subject to regulatory adjustments, tend to be more stable and predictable than volatile global oil markets.

In conclusion, when analyzing ownership expenses, the “fueling” component heavily favours electric cars in Canada. The ability to charge at home using relatively low and stable electricity rates translates into significant annual savings compared to purchasing gasoline, which is subject to price volatility and increasing carbon taxes. While there’s an upfront investment for a Level 2 home charger and public fast charging can be more expensive, the overall charging cost for most EV drivers is a fraction of what gasoline car owners spend at the pump.

Maintaining electric cars compared to gas-powered cars

Beyond the initial purchase and daily fueling, long-term maintenance costs represent a significant portion of a vehicle’s total ownership expenses. This is an area where electric cars often present a compelling advantage over traditional internal combustion engine (ICE) vehicles. The fundamental design differences between these two types of powertrains lead to vastly different maintenance schedules and associated costs, typically favouring the EV owner over the lifecycle cost of the vehicle.

Gasoline cars are complex machines with hundreds of moving parts in their engines and transmissions. Regular maintenance for an ICE vehicle is a familiar routine for most Canadian car owners: oil changes every 5,000 to 10,000 kilometers, spark plug replacements, filter changes (oil, air, fuel), timing belt replacements, exhaust system repairs (mufflers, catalytic converters rusting out, especially with Canadian road salt), and transmission fluid changes. 

These costs, along with their associated labor costs, add up considerably over the years. For example, an oil change can cost anywhere from $50 to $150 or more, depending on the vehicle and type of oil. Spark plugs might be a few hundred dollars every 100,000 km. A timing belt replacement can be a major expense, often running 500-1,000 or more. Exhaust system components are prone to corrosion and can be costly to replace. These are all accepted vehicle expenses for ICE ownership.

Electric cars, on the other hand, have a much simpler powertrain. An electric motor has far fewer moving parts than a gasoline engine – often just one major moving part (the rotor). There’s no engine oil to change, no spark plugs to replace, no complex exhaust system to rust or fail, no fuel filters, and no traditional multi-gear transmission requiring fluid changes (most EVs use a single-speed transmission). This inherent simplicity translates directly into lower routine maintenance costs. 

The most significant maintenance concern unique to EVs is the high-voltage battery pack. This is, understandably, a point of anxiety for some potential buyers due to its high replacement cost. However, EV batteries are designed for longevity and are typically covered by extensive warranties, often 8 years or 160,000 km (whichever comes first), guaranteeing a certain percentage of original capacity (usually 70%). 

Cases of outright battery failure within the warranty period are relatively rare, and battery degradation is a gradual process. While an out-of-warranty battery replacement can indeed be expensive (ranging from $5,000 to $20,000+ depending on the model and battery size), it’s not a regular maintenance item. Moreover, the technology is improving, and options for repairing or replacing individual modules within a pack, rather than the entire pack, are becoming more common, which can lower costs. For most EV owners, the battery will outlast their typical ownership period or will be covered by warranty for the majority of it.

In conclusion, when calculating lifespan costs, electric vehicles have a particular benefit because they require substantially less routine maintenance. Fewer moving parts mean fewer things to break or wear out, translating into tangible savings on ownership expenses year after year. While the long-term health of the battery is a consideration, robust warranties and the decreasing frequency of major issues provide considerable peace of mind. For Canadian drivers tired of frequent and sometimes costly trips to the mechanic for their gasoline cars, the lower maintenance costs of an EV offer a breath of fresh air and substantial long-term financial relief.

Depreciation and Long-Term Value of Electric Cars vs. Gasoline Vehicles

Depreciation, or the decline in the value of a vehicle over time, is frequently the single most expensive, although least obvious, ownership expense for any car, whether electric or gasoline-powered. Understanding how EVs retain their value in comparison to internal combustion engine vehicles is crucial for prospective electric vehicle buyers in Canada when considering overall lifespan costs and making a solid financial decision. Historically, EVs faced skepticism regarding their resale value, but the narrative is rapidly changing due to technological advancements, growing demand, and evolving market perceptions. The situation for EV depreciation, particularly for newer models in Canada, has improved considerably, in some cases, EVs are now holding their value as well as, or even better than, comparable gasoline cars.

When comparing EV depreciation to gasoline car depreciation, it’s important to consider specific segments. Luxury sedans, whether ICE or EV, tend to depreciate more rapidly than more utilitarian vehicles like pickup trucks or some SUVs. For mainstream plug-in cars and EVs, data from organizations like Canadian Black Book (which tracks vehicle valuation) is becoming increasingly important. Recent trends suggest that many popular EV models are depreciating at rates comparable to or slower than the industry average for gasoline vehicles. 

The total cost of ownership: Are electric cars really cheaper in Canada?

After carefully breaking down every aspect of ownership expenses—upfront cost, “fueling” or charging cost, maintenance costs, and depreciation—the ultimate question for Canadian consumers remains: what is the true cost of an electric car compared to a gasoline car, and which one is ultimately more economical? 

The total cost of ownership gives a full financial comparison by combining all expenses throughout a typical ownership period (e.g., 5, 7, or 10 years). For many Canadians, the outcomes of this calculation are continually tipping the scales in favour of electric vehicles, despite potentially higher initial purchase costs.

To calculate the cost of ownership, we need to sum up:

Net Purchase Price: The upfront cost of the vehicle minus any federal (iZEV) and provincial rebates. This is where EVs often start at a disadvantage, but incentives significantly level the playing field.

Fueling/Charging Costs: The cumulative cost of gasoline (including carbon taxes) for an ICE vehicle versus the cumulative cost of electricity (home and public charging) for an EV over the ownership period, based on annual kilometers driven and prevailing energy prices. As discussed, EVs almost always win substantially here in Canada.

Maintenance and Repair Costs: The projected sum of scheduled maintenance, common repairs, and consumables (like tires, brakes). EVs typically have significantly lower maintenance costs due to their simpler mechanics.

Insurance Premiums: The total cost of insurance over the ownership period. This can be variable, but the gap is often not a deal-breaker, and sometimes negligible or even favorable for EVs depending on the model and insurer.

Resale Value (Subtract Depreciation): The anticipated market value of the vehicle at the end of the ownership period. This is subtracted from the total expenses, as it’s money recouped. A stronger resale value means lower net depreciation and thus a lower cost.  Many modern EVs are showing strong resale values.

Other Costs: This can include financing interest (if applicable, which will depend on the loan amount and interest rate), registration fees (which can sometimes be lower for EVs in certain jurisdictions), and potential costs for installing a home charger for an EV.

Let’s consider a hypothetical Canadian scenario: a family driving 20,000 km per year, planning to own their vehicle for 8 years.

• Scenario A: Gasoline Compact SUV
  • Purchase Price (after any negotiation, before taxes): $35,000
  • Fuel Efficiency: 9 L/100 km
  • Average Gasoline Price (including carbon tax, projected to rise): $1.80/L (average over 8 years)
  • Annual Fuel Cost: 200 (100km blocks) * 9 L * $1.80/L = $3,240
  • Total Fuel Cost (8 years): $25,920
  • Estimated Maintenance (oil changes, brakes, tires, miscellaneous repairs): $800/year average = $6,400 over 8 years (can be higher for some models or if major repairs are needed)
  • Estimated Insurance: $1,500/year = $12,000 over 8 years
  • Estimated Resale Value after 8 years (e.g., 30% of original): $10,500
  • Total Outlay before Resale: $35,000 (car) + $25,920 (fuel) + $6,400 (maintenance) + $12,000 (insurance) = $79,320
  • Net Lifecycle Cost: $79,320 – 10,500(resale)=∗∗68,820**

• Scenario B: Electric Compact SUV
  • Purchase Price (MSRP): $50,000
  • Federal iZEV Rebate: -$5,000
  • Provincial Rebate (e.g., Quebec): -$7,000
  • Net Purchase Price: $38,000
  • Home Charger Installation (after any rebates): $700
  • Efficiency: 20 kWh/100 km
  • Average Electricity Price (home charging, e.g., Quebec/BC rates): $0.09/kWh
  • Annual Charging Cost: 200 (100km blocks) * 20 kWh * $0.09/kWh = $360 (assuming 90% home charging, some public charging might slightly increase this)
  • Total Charging Cost (8 years): $2,880 (let’s round up to $3,500 to account for some public charging)
  • Estimated Maintenance (tires, cabin filter, brake fluid, less brake wear): $300/year average = $2,400 over 8 years
  • Estimated Insurance: $1,600/year (let’s assume slightly higher for this example) = $12,800 over 8 years
  • Estimated Resale Value after 8 years (e.g., 40% of original MSRP due to strong demand and lower running costs): $20,000
  • Total Outlay before Resale: $38,000 (car) + $700 (charger) + $3,500 (charging) + $2,400 (maintenance) + $12,800 (insurance) = $57,400
  • Net Lifecycle Cost: $57,400 – 20,000(resale)=∗∗37,400**

In this illustrative (and simplified) Canadian scenario, the electric car demonstrates a significantly lower lifecycle cost – over $31,000 less than the gasoline equivalent over 8 years, even starting with a higher net purchase price after initial rebates. The savings come primarily from drastically lower “fuel” (charging) and maintenance costs, and potentially better resale value. The exact figures will vary greatly based on the specific models compared, provincial rebates, local energy prices, driving habits, and insurance quotes. However, the trend generally holds: the longer you own an EV, and the more you drive, the more pronounced the savings become.

It’s important for Canadian consumers to run their own numbers. Online calculators, often provided by government agencies (like Natural Resources Canada), environmental organizations, or automotive publications, can be valuable tools. These calculators allow users to input specific vehicle models, local gas and electricity prices, driving distances, and financing terms to get a personalized lifecycle cost estimate.

Beyond the direct financial vehicle expenses, there are other, less tangible “costs” or benefits. Gasoline cars contribute more to local air pollution and greenhouse gas emissions, which have societal and environmental costs. The quieter ride and instant torque of EVs also offer a superior driving experience for many.

In conclusion, when looking at the bigger picture through the lens of total lifecycle cost, electric cars are increasingly proving to be the more cost-effective option for a growing number of Canadians. While the upfront cost can still be a hurdle for some, government incentives, coupled with massive savings on “fuel” and maintenance, alongside strong resale values, often result in lower overall ownership expenses over the typical lifespan of a vehicle. Beyond the numbers, the environmental benefits, quieter operation, and engaging driving experience add further value to EV ownership.

More from Carnex Blog:

Electric Vehicle Storage: How To Prep Your EV For Long-Term Parking

First-Time Electric Car Driver? Here’s What You Need To Know Before Hitting the Road

Winter Driving with Electric Vehicles: How Much Range These Popular EVs Lose In The Cold

As always, Carnex can provide you with detailed information about buying and selling used electric vehicles in Ontario.

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

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.