How much can an electric car save you in 2022?
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Buying an electric car in 2022 could save you as much as $7,000 per year. If you own the car for five years – which is how long most people keep a car before replacing it – those savings add up to $35,000.
It should come as no surprise to learn that most of these savings come through lower fuel costs. Gasoline is an expensive fuel source, and it's prone to sudden price spikes. If you’re like us, you’re still recovering from the sky-high gas prices we had to pay earlier in 2022. When you switch to electric, your costs will instantly come way down: it costs just $10–$15 to give a car battery a full charge.
However, it’s important to know that EV savings aren’t totally straightforward. Your fuel savings, for one, can be highly variable. There are also substantial savings available from incentives and maintenance costs, although these too can vary quite a bit. We’ll explain what we mean below, and give you easy tips on how you can boost your savings.
Fuel savings is where you’ll see the greatest benefit when switching to electric. It’s the money you save by spending on electric car charging instead of buying fuel for a gas car.
A battery electric vehicle (BEV, or EV for short), of course, doesn’t actually run on fuel. EVs run on electric motors with large onboard batteries, which you charge up with electricity.
These electric motors are very efficient, allowing them to get your car moving with a lot less energy than a gas car uses. As a result, each mile you drive in an EV costs you a lot less – just 4-5 cents per mile, compared to an average of 13 cents per mile in a gas car.
As you rack up mileage over time, these savings start to add up. If you drive an average amount and charge your car with grid power, you can usually save 1,500 to $2,000 a year.
And if you drive long distances and charge with a cheap power source like solar panels, your savings will be even higher. We found, for instance, that Californians that drive 520 miles per week and charge their EV with home solar panels can save $4,500 on fuel costs annually.
That said, there are a few things that can affect your exact level of fuel savings. Here are the ones worth paying attention to:
Tesla Superchargers can charge up your battery quickly. Sadly, they’re also expensive to use. Image source: Tesla
The way you charge your EV will have a huge impact on your fuel savings – so big that we felt it deserves its own section.
You see, while gas prices tend to be pretty similar within a given location, there can be very large cost differences between various charging options.
Here’s a look at the comparative costs of the three main methods to charge an EV.
|Type of charging||Electricity cost||Cost to fully charge an EV*|
|Public charging station||$0.28 - $0.69 per kWh||Up to $40|
|Grid power at home||$0.10 - $0.40 per kWh||Up to $23|
|Solar power at home||$0.05 - $0.11 per kWh||Up to $6.50|
*Assumes Tesla Model 3 RWD and 85% conversion efficiency
kWh = kilowatt-hour
Source: Solar Powered Electric Vehicles - Consumer Guide
Home charging will almost always be your cheapest option. If you use a home charger connected to grid power, your costs will usually be around 15 to 20 cents per kilowatt-hour (kWh), although this can vary a bit by the utility. If you charge with home solar panels, you’ll pay even less – as little as 5 cents per kWh.
By contrast, commercial charging can be very expensive, especially if done at a DC fast charging station. Tesla's Supercharger network charges up to $0.58 per kWh, and other providers charge even more than that.
Because of these cost differences, your choice of charging option has a huge impact on your savings. Assuming you do all your charging at public stations, the switch to charging with home solar panels will add $2,500 a year to your fuel savings.
Charging at home isn’t just cheaper, it’s more convenient. With a Level 2 home charging station, you can fully charge up your EV while it’s parked in the garage overnight. Avoid public charging stations unless you’re in a pinch.
Savings tip #1: There are lots of incentives out there to help homeowners reduce the cost of energy-efficient home improvements. Avoid costly public charging stations unless strictly necessary. Your charging costs will be much lower at home, especially if you use a rooftop solar panel system.
All taxpayers have access to a $7,500 incentive, and you may be able to access thousands of dollars more through location-based rebates depending on your location. If you qualify, you can use them to knock a large amount off your EV purchase costs.
Let’s start by looking at the incentive that’s available nationwide: the $7.500 federal EV incentive. It's a tax credit, so when you buy an EV you can apply to receive $7,500 back via your tax return. In other words, if you pay federal taxes, Uncle Sam is willing to give you a large gift to help you with your next car purchase. This incentive was introduced to encourage electric vehicle purchases, and since its introduction in 2008 hundreds of thousands of buyers have made use of it.
Unfortunately, the incentive has certain conditions and exclusions, some of which didn’t exist before. The most significant one right now is a restriction on Tesla, GM, and Toyota; due to manufacturer caps, their EVs are ineligible for the incentive until 2023.
Next, there’s the location-based incentives and rebates. Many states, utility companies, and local governments have programs that can reduce your EV ownership costs. Here are some notable examples:
Don’t automatically assume you’ll save a lot of money this way – incentive availability varies from place to place, and each program tends to have its own set of eligibility criteria.
All said, your ability to benefit from incentives and rebates is highly dependent on your circumstances. You could potentially save a lot of money if you’re in CO or CT. On the other hand, if you can’t find any applicable incentive programs – and the EV model you want is ineligible for the federal incentive – you could find yourself paying full price.
Savings tip #2: Choose an EV that qualifies for the $7,500 federal incentive. The Department of Energy (DOE) has a list of eligible vehicles on its website.
One of the great things about EVs is that they’re so much easier to service and maintain. Electric motors can operate without the lubricating oils required by combustion engines. In other words, no more oil changes!
That’s just the tip of the iceberg. EVs require fewer fluids overall, they’re built with fewer parts, and they see reduced brake wear because of their regenerative braking. All this means that they need to be serviced and repaired a lot less frequently, and their upkeep is a lot cheaper.
In fact, a comparative study by the U.S. Department of Energy (DOE) finds EVs are roughly 40% cheaper to maintain than gas cars. While the average cost to maintain a gas car is 10.1 cents per mile, for an EV it is just 6.1 cents per mile.
Using the DOE’s figures, it’s easy to estimate your annual maintenance costs and savings. If you drive 25,000 miles a year, you’d spend $2,525 for the upkeep of a gas vehicle, but just $1,525 for an EV. That’s a savings of $1,000!
You’ll still save if you don’t drive very much; at an annual mileage of 10,000 miles, you’ll still be $400 ahead every year.
Savings tip #3: Electric cars require less maintenance than gas cars, but any maintenance you do need you may be able to handle yourself. DIY guides are posted online by many carmakers, including Tesla.
There are many electric car reviews available online, and they’re a great resource if you’re curious about things like EV performance and range.
But they tend to lack reliable info on the most important question for many consumers: how much do you actually save when you buy an EV? We wanted an answer, so we crunched the numbers ourselves. We found that while they can be variable, EV savings are very substantial indeed. Here’s a breakdown:
How much can you save with an electric car?
|Savings factor||Max. yearly savings||Max. 5-year savings|
*We’ve only included the nationally-available federal EV incentive here.
**One-time incentive savings divided by duration of ownership (5 years).
In short, you can save a lot of money if you buy an electric car – as much as $35,000 over five years!
Just remember that the best way to maximize EV fuel savings is by installing a rooftop solar panel system. Solar panels will not only charge your EV cheaply, but they can also offer substantial electric bill savings while also reducing your grid reliance. You can check your home’s suitability for solar panels by using the easy-to-use solar calculator below.