Gas vs Electric Car Cost When Oil Prices Are High

When oil prices are high, electric cars almost always cost less to fuel than gasoline cars, often by a significant margin. This article compares the total cost of ownership—fuel, maintenance, purchase price, and resale—so you can see exactly where the savings come from and when a gas car might still make sense.

Formula

The calculator compares the annual fuel cost of a gasoline car and an electric car using two straightforward formulas:

• Gas cost = (annual miles ÷ fuel economy in miles per gallon) × gas price per gallon
• Electricity cost = (annual miles ÷ 100) × efficiency in kWh per 100 miles × electricity price per kWh
• Annual savings = gas cost − electricity cost

Variables and units:

• Annual miles driven (miles): how far you drive in a year
• Gas car fuel economy (mpg): combined city/highway miles per gallon
• Electric car efficiency (kWh/100mi): energy used per 100 miles, typically 25–40 for modern EVs
• Gas price ($/gallon): what you pay at the pump
• Electricity price ($/kWh): your home rate, usually 0.10–0.30 in the US

The result shows the annual cost for each vehicle and the difference. A positive savings means the EV is cheaper to fuel.

Worked Example

Using the default values from the calculator:

• Annual miles = 12,000
• Gas car mpg = 30
• Gas price = $4.50/gallon
• EV efficiency = 34 kWh/100mi
• Electricity price = $0.16/kWh

Step 1: Gas cost = (12,000 ÷ 30) × 4.50 = 400 × 4.50 = $1,800 per year.

Step 2: Electricity cost = (12,000 ÷ 100) × 34 × 0.16 = 120 × 34 × 0.16 = 4,080 × 0.16 = $652.80 per year.

Step 3: Annual savings = 1,800 − 652.80 = $1,147.20.

So with these inputs, the EV saves over $1,100 per year in fuel alone.

Why Oil Prices Matter

Gasoline prices are directly tied to crude oil prices, which fluctuate due to global supply, geopolitical events, and refining capacity. When oil spikes, gas prices climb quickly, and every mile driven in a gas car becomes more expensive. Electricity prices, by contrast, are much more stable because they come from a mix of sources—natural gas, coal, renewables, and nuclear—and are regulated at the state level. Even when natural gas prices rise, the effect on electricity is smaller and slower than the effect of oil on gasoline.

In the US, a $1 increase in the price of a barrel of crude typically raises the price of a gallon of gas by about 2.4 cents. So if oil jumps from $70 to $140 a barrel, gas could rise from $3.00 to $4.68 per gallon—a 56% increase. Electricity prices rarely move that dramatically in the same period.

How to Use the Calculator

Enter your own numbers to get a personalized comparison. Start with your annual mileage—the average US driver does about 12,000 miles, but if you commute long distances, use your actual figure. For fuel economy, check the window sticker of your gas car or the EPA rating. For an EV, look up its efficiency in kWh per 100 miles (the EPA provides this for every model). For prices, use what you actually pay: the current gas price at your local station and your home electricity rate (found on your utility bill).

The calculator gives a fuel-only comparison. To get the full picture, add maintenance, insurance, depreciation, and purchase price. EVs typically have lower maintenance costs (no oil changes, fewer moving parts) but often higher upfront prices. Federal and state incentives can reduce the purchase gap, but those change frequently.

Common Mistakes and Misconceptions

One common mistake is comparing a gas car’s highway mpg with an EV’s city efficiency. Use combined ratings for both. Another is forgetting that EV efficiency drops in cold weather—by 10–30% in freezing temperatures—which increases the kWh per 100 miles and thus the electricity cost. Also, home charging is usually cheaper than public fast charging, which can cost as much as $0.40–0.60 per kWh, erasing much of the savings.

People also overlook the cost of installing a home charger. A Level 2 charger can cost $500–$2,000 including installation, though some utilities offer rebates. If you rely solely on public charging, the fuel cost advantage shrinks.

When a Gas Car Might Still Be Cheaper

There are scenarios where a gas car can still cost less overall, even with high oil prices:

• Very low mileage: If you drive under 5,000 miles a year, the fuel savings from an EV may not offset the higher purchase price.
• Very cheap gas, expensive electricity: In regions with electricity above $0.30/kWh and gas below $3.00, the gap narrows dramatically.
• No home charging: Relying on public fast charging at high rates can make an EV more expensive to fuel than a gas car.
• Short ownership period: If you sell the EV after 2–3 years, the depreciation may outweigh fuel savings.

For most drivers, however, the longer you own the EV, the more you save.

Total Cost of Ownership: Beyond Fuel

Fuel is only part of the equation. The US Department of Energy’s alternative fuels data center provides a total cost of ownership calculator that includes maintenance, repairs, insurance, and depreciation. On average, EVs have lower maintenance costs—about $0.03 per mile less than gas cars—because they have fewer fluids, no spark plugs, and regenerative braking reduces brake wear. However, tires may wear faster due to the instant torque and heavier weight. Insurance can be slightly higher for EVs due to repair costs.

Depreciation is a wildcard. Early EVs depreciated quickly, but newer models hold value better. Gas cars also depreciate, especially when gas prices are high and demand shifts toward efficient vehicles. Resale value depends on battery health, which degrades slowly—most modern EV batteries retain 70–80% capacity after 150,000 miles.

Frequently Asked Questions

Is it always cheaper to charge an EV than to buy gas?

No. If you use public fast chargers exclusively, the cost per mile can be similar to or higher than a gas car. Home charging is almost always cheaper, though. In the US, the average residential rate is about $0.16/kWh, which yields a cost per mile of roughly $0.05 for a typical EV, versus $0.12–0.15 for a 30 mpg gas car at $4.50/gallon.

How much does it cost to install a home EV charger?

Installation typically costs $500–$2,000, depending on your electrical panel capacity and wiring distance. Some utilities offer rebates that reduce this. If you already have a 240V outlet in the garage, you may only need to buy the charger unit, which costs $300–$700.

Does cold weather make EVs more expensive to run?

Yes. Cold temperatures reduce battery efficiency, increasing energy consumption by 10–30%. That means more kWh per mile, raising the cost. Preheating the cabin while plugged in can reduce the impact.

What about oil changes and other maintenance?

EVs don’t need oil changes, and they have fewer moving parts, so maintenance is cheaper. Over 5 years, an EV can save $1,000–$3,000 in maintenance compared to a gas car, though this varies by model and usage.

How do I find my electricity rate?

Check your utility bill—it shows the price per kWh, usually around $0.10–$0.30 in the US. If you have time-of-use rates, charging overnight may be cheaper, sometimes as low as $0.08/kWh.

Are there government incentives for buying an EV?

Yes, the US federal government offers a tax credit of up to $7,500 for new EVs, subject to income and vehicle price limits. Many states and utilities also offer rebates. These change frequently, so check current programs.

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in miles | Annual miles driven | miles | 12000 | 0 | 200000
in mpg | Gas car fuel economy | mpg | 30 | 5 | 100
in kwh | Electric car efficiency | kWh/100mi | 34 | 10 | 100
in gas_price | Gas price per gallon | $/gal | 4.50 | 0 | 20
in elec_price | Electricity price per kWh | $/kWh | 0.16 | 0 | 1
out gas_cost | Annual gas cost | $ | (miles / mpg) * gas_price | 2
out elec_cost | Annual electricity cost | $ | (miles / 100) * kwh * elec_price | 2
out savings | Annual fuel savings (EV vs gas) | $ | gas_cost - elec_cost | 2