Electric Vehicle Savings: Here’s How Long It Takes to Break Even When Buying an EV in 2022

May 12, 2022

We hear it all the time: electric cars save you money. Electricity is cheaper than gas, EVs require less maintenance, and incentives abound. However, there’s no hiding the fact that electric vehicles are expensive, especially the models with the best range, performance and charge rates. To shed light on the reality of electric vehicle savings, we dug deep into the data. How long does it take to break even when buying an EV? We were surprised with what we found.

Five Examples of EVs Versus Combustion Competitors

Tesla Model Y Versus BMW X4

Tesla Model Y savings
The best-selling EV in America, the Tesla Model Y. Check out our full review.

The X4 is one of the most direct competitors to the 2022 Tesla Model Y, the best selling electric vehicle in America. Although Tesla models no longer qualify for the federal EV tax credit, the cost of the BMW X4 and high fuel consumption make this an interesting comparison.

ModelMSRPPrice DifferenceIncentivesFuel EconomyRangeTime to RefuelCost to Refuel ($4.22/gal or $0.14 per kWh)Annual Fuel Cost (15,000 miles)Average Annual Maintenance CostTime to Break Even
BMW X4 xDrive30i$51,800--24 MPG413 miles5 min$75.58$2,745$228
Tesla Model Y Long Range$62,990+$11,190State and local only3.8 mi/kWh (125 MPGe)330 miles20 to 30 min$10.50$477$774.5 years

Ford F-150 Lightning Versus F-150 3.5 Liter 4WD

2022 Ford F-150 Lightning
F-150 Lightning electric truck (full review here)

Pickup trucks get the worst fuel economy. It’s just a matter of physics; the shape of a truck is not aerodynamic, and they’re often heavy. The F-150 Lightning weighs 35% more than the gas-powered F-150. So you would think that the time to break even would be shorter when buying an electric truck over the combustion equivalent.

This side-by-side comparison highlights the importance of price parity for EVs. When EVs are similarly priced to ICE vehicles, the cost of ownership savings are crystal clear. But what about when the electric version costs over $25,000 more out the door? Have a look for yourself. 

ModelMSRPPrice DifferenceIncentivesFuel EconomyRangeTime to RefuelCost to Refuel ($4.22/gal or $0.14 per kWh)Annual Fuel Cost (15,000 miles)Average Annual Maintenance CostTime to Break Even
Ford F-150 Platinum 4WD 3.5$62,070--20 MPG520 miles5 min$109.70$3,165$228
Ford F-150 Lightning Platinum$90,874+$28,804Fed, state and local2.1 mi/kWh (70 MPGe)320 miles45 min$18.34$860$7711 yrs (8.5 yrs with tax credit)

Toyota bZ4X Versus Toyota RAV4 Hybrid 

The 2023 Toyota bZ4X (full review here)

Toyota sells nearly half a million RAV4s every year. Will things change now that Toyota has launched its first fully-electric vehicle? The all-new bZ4X lacks the range and charging speed to compete with the best in 2022’s electric segment, but how does it stack up to the popular RAV4 hybrid? How long would it take to break even when paying a premium for the electric bZ4X?

ModelMSRPPrice DifferenceIncentivesFuel EconomyRangeTime to RefuelCost to Refuel ($4.22/gal or $0.14 per kWh)Annual Fuel Cost (15,000 miles)Average Annual Maintenance CostTime to Break Even
Toyota RAV4 XLE Hybrid$30,545--40 MPG580 miles5 min$61.19$1,582$228
Toyota bZ4X XLE FWD$42,000+$11,455Fed, state and local3.5 mi/kWh (119 MPGe)252 miles1 hour$10.19$606$7710 years (3 yrs with tax credit)

Subaru Solterra Versus Subaru Forester

2023 Subaru Solterra
2023 Subaru Solterra EV (full review here)

Subaru’s first EV is built on the same electric platform as the new Toyota bZ4X. Subaru is known for being Earth-friendly, but is the new Solterra EV friendly to your wallet? With range and charging figures more akin to 2015’s standards than today’s best EVs, the Subaru Solterra is off-road capable, but a tough sell for those who truly venture off the beaten path. 

ModelMSRPPrice DifferenceIncentivesFuel EconomyRangeTime to RefuelCost to Refuel ($4.22/gal or $0.14 per kWh)Annual Fuel Cost (15,000 miles)Annual Maintenance CostTime to Break Even
Subaru Forester base$25,395--29 MPG481 miles5 min$70.05$2,183$228
Subaru Solterra Premium$46,220+$20,825Fed, state and local3.1 mi/kWh (104 MPGe)228 miles1 hour$9.97$677$7712 years (8 yrs with tax credit)

Hyundai IONIQ 5 Versus Hyundai Santa Fe

Charging 2022 IONIQ 5
2022 Hyundai IONIQ 5 EV (full review here)

The Hyundai IONIQ 5 won big at the 2022 World Car Awards, but is it a winner for your wallet? It all depends on how much you drive, and how long you plan to keep the vehicle. The Hyundai Santa Fe just received a total makeover, and its price remains much lower than the IONIQ 5’s. Still, EVs are super efficient and electricity is cheap. Just how long would it take to break even when buying an IONIQ 5 EV instead of the more affordable Santa Fe crossover?

Disclaimer: I own a Hyundai IONIQ 5 Limited AWD, and it’s awesome.

ModelMSRPPrice DifferenceIncentivesFuel EconomyRangeTime to RefuelCost to Refuel ($4.22/gal or $0.14 per kWh)Annual Fuel Cost (15,000 miles)Average Annual Maintenance CostTime to Break Even
Hyundai Santa Fe SEL$27,875--26 MPG489 miles5 min$79.33$2,433$228
Hyundai IONIQ 5 SEL RWD$45,900+$18,005Fed, state and local3.4 mi/kWh (114 MPGe)303 miles20 to 30 min$10.15$502$778 years (5 yrs with tax credit)

Electric Vehicle Savings: Other Factors to Consider

Kia EV6 bidirectional charging
2022 Kia EV6

Incentives

In many states and localities, thousands of dollars of additional incentives are available. Colorado, Connecticut, Delaware, Maryland and California are just some of the states with very generous EV incentives. State and local incentives can reduce the time to break even considerably. For example, in Delaware, buyers of the Hyundai IONIQ 5 will break even versus the Santa Fe in just 3.5 years with the federal EV tax credit and state rebates factored in. 

Conversely, for car buyers who can’t take advantage of the federal EV tax credit or any state incentives, it will take many more years to reap the full savings of switching to an electric vehicle. In the case of the new Ford F-150 Lightning, it could take up to 11 years to break even without any incentives, assuming 15,000 miles per year of driving. 

Check this out >>> The North Carolina Clean Energy Technology Center’s DSIRE database is the BEST one-stop resource for all EV incentives. Plus, you’ll see what solar power incentives are available in your area too.

Miles Driven

The difference between driving 10,000 miles per year and 20,000 miles per year is massive when it comes to realizing the savings of driving an EV. The average American driver travels about 14,000 miles per year in their vehicle. Simply put, long-distance commuters, frequent travelers and fleet operators will see the greatest cost savings of going electric. 

With the 2023 Ford F-150 Lightning, a driver who travels 15,000 miles per year and can take advantage of the full $7,500 federal EV tax credit should expect to break even versus a combustion F-150 in 8.5 years. However, if they drive 25,000 miles per year, the break even period narrows to just 5 years. After that, they will be saving roughly $4,000 every year in fuel and maintenance costs. Clearly, EVs make more sense as a long-term purchase. 

Maintenance

The maintenance figures included in this cost comparison is sourced from We Predict, a Michigan-based data analysis company. They dug deep into automotive maintenance data and found that during the first three years of vehicle ownership, the average annual maintenance for an electric vehicle is just $77. And based on personal experience, that’s likely for new tires (EVs are MUCH heavier). 

During the same period, combustion vehicles average $228 in annual maintenance, with most of the costs in the first few years going towards oil changes and the like. 

We may be underestimating the maintenance savings associated with going electric when comparing luxury brands. For example, BMW is notorious for costly maintenance. Opting for a Tesla Model Y over a BMW will likely result in even greater maintenance savings, and therefore a reduced break-even period. 

Gas Prices!

ev charging station

As of early May 2022, the average gas price in the United States is $4.22 per gallon. In California, it’s $5.76. Nevada, Hawaii, Washington, Oregon and Illinois all have gas prices much higher than the national average. In these states, EV drivers will see even greater fuel savings. 

Let’s take a closer look at an example of someone purchasing a Hyundai IONIQ 5 in California. We’ll assume that the consumer qualifies for the full $7,500 EV tax credit and the $2,500 state rebate for a zero-emissions vehicle. They drive 15,000 miles per year. At gas prices of $5.76 per gallon, the break even point for the IONIQ 5 versus the Hyundai Santa Fe arrives in just 3 years, versus 5 years for the rest of the nation. That figure includes the 59% higher residential electricity rates in California. 

YAA’s Take

What can we learn from this EV cost of ownership comparison? The specifics of your situation matter. 

  • What combustion vehicle are you considering in addition to an EV? 
  • What’s the fuel economy for each option? 
  • Do you qualify for the full federal EV tax credit?
  • Are there local or state incentives in your area? 
  • How many miles do you drive each year?
  • How long do you plan to keep the vehicle?

These are the most important questions to ask when deciding whether or not it makes sense to buy an EV in 2022. Have questions? Let us know in the comments, or better yet join the YAA family at joinyaa.com/community. You can also reach me at justin@joinyaa.com. We’d love to hear from you.

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1 Comment

  1. Matt Lehman

    For me the only way to do this calculation is to figure out how many miles you have to drive to make the purchase make sense.

    For example, my vehicle financing is $435/mo. It calls for premium gas, lets say $4.50/gal. I get 23 MPG.
    Financing a new EV would cost me about $750/mo and as you say, 3.4 m/kh @ .14/khr.

    @1000 miles per month my cost for gas = $630 – EV = $791
    @2000 miles per month – gas = $826 – EV = $832
    @3000 miles per month – gas = $1022 – EV = $873
    @4000 miles per month – gas = $1217 – EV = $915

    I personally will average around 3K/mo. so I would do well and get a nice $7500 tax deduction at the end of the year. The savings for maintenance is good but my insurance cost will probably be higher. Then there’s the one time cost of the wiring my garage for charging.

    My typical trip is around 220 – 275 miles round trip. With range increasing and charging stations being more available, this is now doable for me. I don’t have an issue sitting for 30-45 minutes and answering emails or making calls while charging. I also need a small SUV, which are now available.

    Wildcard for me is battery replacement costs.

    Only now has an EV even been a realistic option for me. I hope to get one soon.

    Reply

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