How Much Would an Electric Vehicle Save You in Gas Each Year?

Electric vehicles are finally having their day in the sun. EV sales have been climbing over the past few years, and in the second quarter of this year, they reached 7.2% of all light-duty vehicle sales in the U.S., up from 5.7% over the same period last year.

Part of the recent rise in sales has been fueled by more EVs hitting the market. For example, more than 40 EVs are for sale this year in the U.S.

And while some EV owners want an electric vehicle for climate-related reasons, others may be looking at the current surge in gas prices and want their next car to allow them to ditch trips to the pump.

Here's how much you can save in gas each year by going electric and a few ways to save money if you divide to buy a new EV right now.

How much you'll save on gas each year

Most of the data out there shows that an EV owner can save about $1,000 each year by charging up their vehicle rather than filling it with gas. Consumer Reports research found that an EV owner who does most of their vehicle charging at home will save between $800 and $1,000 per year.

There will be lots of variations with this, of course, depending on the size of the EV, the cost of electricity and gas where you live, what type of charger you use (public fast chargers can be more expensive than charging at home), and the conditions you drive the EV in.

The Washington Post recently did a deep dive into EV charging cost versus gas prices and found that recharging an EV was cheaper in all 50 states than filling up a gasoline tank. Plus, EV SUV or sedan owners would save about $700 per year, while pickup truck owners could save $1,000, based on 14,000 miles of annual driving.

If you're interested in diving a little deeper into how much a vehicle may cost you -- whether it's gas or electric -- you can view each state's cost of ownership statistics.

One more way to save money with an EV

It's no secret that car prices have soared over the past few years because of inflation and supply chain issues. But more recently, EV prices have cooled. Recent data from Kelley Blue Book shows that the average transaction price for an EV in August was down 18% from a year ago, to $53,469.

So if you're in the market for a new EV right now, it could be a good time to make the move without derailing your personal finances. The good news is that the current EV tax incentives offered by the government could go a long way toward helping you with your vehicle purchase or even lease.

Here are a few details you need to know:

• The federal tax credit for electric vehicles in 2023 is $7,500 for a new EV and $4,000 for a pre-owned EV.
• Not all EVs qualify; check our EV tax credit guide to see which vehicles do.
• Some states and utility companies may even have incentives for vehicle chargers.
• If you find a qualifying vehicle, you can fill out Form 8936 to receive the credit.

EVs aren't exactly cheap to buy, even with the current tax credits. But if you're already in the market for a new vehicle, then the credits (and saving an average of $1,000 annually over gas-powered vehicles) may be enough to make the transition to an electric vehicle worth the price.