EVs have become a lot more affordable in recent years, and prices keep dropping. While the upfront cost is crucial when buying any car, you’ve also got to think about expenses over the vehicle’s lifetime, like maintenance or charging.

In this article, we’ll show you all the ways you can save money with an EV. From snagging incentives and rebates to smart charging tips, there are plenty of ways to cut down on costs. Looking ahead, there’s even potential to turn your EV into a savings powerhouse and earn some extra cash. 

Let’s explore how driving an EV can benefit both your finances and the environment.

What is cheaper over lifetime: Gas vs. Electric 

When comparing the costs of buying and owning an EV versus a gas-powered car, it’s essential to consider all stages: from the initial purchase to charging/refueling, maintenance, and insurance costs.

In our Motor community, one of the most popular models is the VW ID.4. Let’s compare this EV with its gas counterpart, the VW Tiguan. Since we’ve just launched our services in New York, we’ll apply New York State’s electricity and gas prices, along with NY incentives. We assume an annual driving distance of 13,000 miles and an ownership period of 7 years. 

Graphic sourced on www.carboncounter.com/

As you can see, while the purchase price of the EV is higher at $264/month compared to $222/month for the gas car, the EV’s lower maintenance cost as well as lower charging/refueling costs – $42/month for electricity versus $91/month for gas – reduce the overall cost of ownership over time. In terms of lifecycle emissions, the electric version clearly outperforms its gas counterpart. 

So yes, many EV models are already as affordable or cheaper over their lifetime compared to gas cars. And this difference is set to grow as production ramps up, helped by incentives and tech improvements. We recently featured EV driver stories, such as Ellen’s, who spent only $600 on charging over 5 years of owning her EV. What’s really cool is how much control you have over your total ownership costs as an EV driver. Just picture having solar panels at home that allow you to charge your EV for free – something you can’t do with a gas car. 

Save Money Buying your EV

Would you believe that we have EV owners in our community who saved up to $15,700 of their new car? It all depends on which EV you get and where you are located. Here are four options for you to save money when making your initial EV purchase. 

• When buying a new EV you can save up to $7,500 through the federal tax credit, which can now be applied as an instant rebate at approved dealers. It applies to both full EVs and plug-in hybrids, though income caps and vehicle eligibility requirements apply. For example, a married couple with a combined annual income of $250,000 purchasing a new Volkswagen ID.4 for $40,000 would be eligible for the full $7,500 federal tax credit, as their income is below the $300,000 joint filer cap, and the vehicle’s price is under the $55,000 limit for cars, and the ID.4 meets the North American assembly and battery sourcing requirements. Several states offer additional incentives of up to around $5,000 on top of the federal credit.
• Used EV incentives: With used EV prices dropping fast, buying used can be a really good option too. A used EV can also save you up to $4,000 through the federal tax credit. To be eligible, the EV must be at least two years old, priced under $25,000, and purchased from a dealer. 
• Trading in your gas car: Some states have additional incentives for trading in your gas car when purchasing an EV. The Replace Your Ride Program in Vermont offers consumers incentives of up to $5,000 for scrapping their at least 10-year-old gas..
• Utility incentives: This might surprise you. There are utilities that offer rebates for EV purchases. So besides discounted electricity rates for charging which we discuss later, they actually also help with your upfront cost. An example would be Green Mountain Power in Vermont who offer up to $3,200 depending on if your EV is new or used, an EV or a plug-in hybrid. 

So there are lots of options! 

Save Money Charging your EV

Let’s now explore how you can save money when charging your EV. If you’re new to the world of EV charging and unsure about options like Level 2 or DC fast charging, check out our detailed article on EV charging. But if you’re already familiar, let’s dive right in!

Home Charging

Home charging is the most cost-effective option, especially when you take advantage of free or discounted charger installation services and special EV rates from your utility company. And if you’re up for it, installing your own solar system can cover not just your home’s electricity needs but also your EV charging costs, offering significant long-term savings and energy independence.

Home Charging Station Incentives:

Level 2 charging stations for your home start at around $400, with installations typically ranging from $400 to $1,500 (plus potential costs for electrical panel upgrades). Here are two ways to save: Federal tax credits can cover up to 30% of your charger purchase and installation costs, maxing out at $1,000. Some utilities also offer rebates and credits, like the Charger Ready program from Rockland Electric Company in New Jersey.  

Utility Charging Programs:

Utility companies often provide special rates for EV owners, such as time-of-use (TOU) rates that offer lower electricity prices during off-peak hours. For instance, in SmartCharge New York’s program participants can earn $0.10 per kWh for charging during off-peak hours (12 a.m. to 8 a.m.) and receive additional incentives for avoiding charging during summer peak hours. Another option is managed charging programs, such as GMP’s Rate 72 Charging Program in Vermont. In these programs utilities remotely manage your EV’s charging during high-demand periods, offering incentives or bill credits in return.

Home Energy Systems – Saving Options:

• Solar and Battery Storage: Installing solar panels and battery storage systems enables you to generate and store your own electricity, reducing dependence on the grid and lowering overall energy costs. Using solar energy to charge your EV can notably cut down your electricity bills.
• Bidirectional Charging: Certain EVs support bidirectional charging, allowing you to use your vehicle as a battery storage system and sell excess energy back to the grid. This can generate additional income and further decrease energy expenses.

Public Charging

If you’re looking to save money, it’s a good idea to limit how often you rely on public charging. In general, slower charging options are cheaper. For example, charging at a Level 2 station might cost around $0.23 per kWh, whereas a Level 3 fast charger could run about $0.47 per kWh. Many workplaces and some retail locations offer free EV charging for employees and customers.

Here are two more things to consider to save money with public charging:  

• Charging credits when buying EV: Some EV manufacturers offer charging credits when you purchase a new EV. For example, Volkswagen offers new ID.4 buyers 30 minutes of complimentary DC fast charging and 60 minutes of Level 2 charging per session for three years at Electrify America stations.
• Membership programs with third-party fast charging networks: Joining membership programs with third-party fast charging networks can provide discounts and lower charging costs. For example, networks like Electrify America offer membership plans that reduce the cost per kWh for members.

Usage and Maintenance Savings with your EV

EVs have way lower maintenance costs compared to gas cars. Why? Because they’ve got way fewer moving parts, which means less chance of stuff breaking down and fewer trips to the mechanic. You won’t need oil changes, fuel filters, spark plugs, or timing belts with an EV.

Here’s a small but meaningful way to save on charging costs that even experienced EV owners might not think about: saving while driving with regenerative braking. Regenerative braking turns kinetic energy from slowing down into battery recharge. It’s a handy feature in many EVs that you can toggle on or off. Using regenerative braking can save you about $50 per year on charging costs.

Resale Value and Battery Replacement

To truly understand the total cost of owning an EV, it’s crucial to consider both its resale value at the end of your ownership and the potential need for battery replacement.

Battery Longevity: Modern EV batteries are built to last between 8 to 15 years, often covered by warranties of 8-10 years or 100,000 miles. According to Recurrent, a company that tracks battery life, replacements for EV and plug-in hybrid batteries are rare. Out of about 15,000 drivers studied, only about 1.5% needed a replacement, and most were covered under warranty. This means you likely won’t have to worry much about replacing your EV’s battery, adding to its cost-effectiveness over time.

Resale Value: While EVs have many financial benefits, it’s important to be aware of current market trends regarding resale values. According to recent reports, resale values for some EVs have been dropping. This is influenced by several factors, including rapid advancements in technology and the increasing availability of new EV models with longer ranges and better features. As technology stabilizes and more people adopt EVs, resale values are likely to become more predictable.

We Are Here to Help You Save Money!

Now that you know all the different ways to save money with an EV, you can see it’s a highly personal experience. 

Remember our Motor community member in Vermont who saved $15,700 on their new EV? This is how: Their income fell within 80% of the statewide median income, and they purchased a new VW ID4 eligible for the $7,500 federal tax credit. They also received a $5,000 rebate from the Vermont State, along with a $3,200 rebate from the utility company. That brought their $40,000 VW ID4 down to $24,300. Now, let’s talk about the charging costs. Assuming they drive 13,000 miles a year with 80% home charging and 20% public charging, using Vermont’s average residential electricity rate of about $0.19/kWh and Electrify America public charging rates, and taking advantage of the Electrify America VW ID4 charging deal and Green Mountain Power’s off-peak EV charging rate of $0.13447/kWh, we estimate their annual charging cost to be around $338 for the first three years!

What we always emphasize is the options and freedom an EV brings. It’s much different than owning a gas car. With an EV, you have more control than ever over your savings.