AAA Analysis: Gas-Powered Cars Cheaper Than EVs
A new analysis from the American Automobile Association (AAA) indicates that gas-powered vehicles are currently more cost-effective than electric vehicles (EVs) when considering the overall expenses.
With rising electricity bills and fluctuating gas prices, AAA suggests that by 2025, EVs may be among the most expensive vehicle types. Throughout this period, former President Joe Biden promoted EVs while the Trump administration enabled oil and gas leasing, contributing to a drop in gas prices.
“This AAA assessment highlights an irony in the current fascination with ‘clean’ energy. Increasing energy costs for consumers has been a long-term goal for those worried about climate change,” a spokesperson said. “Now that the effects of these rising costs are coming to light, it’s evident that the push for EV integration may have unintentionally reduced the competitiveness of gas-powered vehicles.”
According to the AAA report, the average vehicle cost has decreased from $12,297 to $11,577 since 2024, equating to about $964.78 monthly.
The analysis adds that while EVs often incur higher overall ownership expenses (like depreciation, insurance, and financing), they tend to have lower operational costs, particularly for fuel and maintenance. For instance, last year, fuel costs for EVs were approximately one-third of those for gas vehicles. However, this year’s significant drop in gasoline prices and a slight rise in electricity rates have made EVs more expensive overall.
Furthermore, the Biden administration has invested in EV technology and supported California’s unofficial national EV mandate, yet attempts to subsidize certain EV tax credits have faced pushback from Congress and the Trump administration. Some of these tax credits are set to expire on September 30.
Electricity costs are projected to increase due to an aging infrastructure and the rapid closure of coal plants in certain states, which aims to meet green energy targets. This situation is accelerating strain on the power grid. Meanwhile, gasoline prices are declining, with expectations of reaching 20-year lows, barring 2020 anomalies.
