The Short Answer

In 2026, an electric vehicle can be cheaper than a comparable gas car over five years — but it depends on how you buy and where you charge. New EVs that qualify for the full $7,500 federal credit often beat gas on total cost of ownership (TCO) once you factor in lower fuel and maintenance. Used EVs, especially with the $4,000 used-EV credit, can be an even better deal if you're willing to verify battery health and remaining warranty. High electricity rates or heavy reliance on public fast charging can erase the fuel savings, so your local rates and driving habits matter.

Scenario 1: New Compact Sedan — EV vs. Gas

Compare a new compact EV (e.g. Chevrolet Bolt, Hyundai Kona Electric, or similar) to a new gas compact (e.g. Honda Civic, Toyota Corolla). Purchase prices in early 2026: the EV stickers around $35,000–$42,000; the gas car around $28,000–$32,000. If the EV qualifies for the full $7,500 federal tax credit (income and MSRP limits apply), your out-the-door effective price lands around $34,500. The gas car has no federal credit. So you start with the EV costing roughly $2,500–$4,000 more upfront.

Fuel over 5 years (15,000 miles/year): At a national average of about $2.95 per gallon and 30 mpg, the gas car burns 2,500 gallons — about $7,375. For the EV, at 3.5 miles per kWh and the U.S. residential average of about 18¢/kWh, you use roughly 21,400 kWh — about $3,850. EV fuel savings: ~$3,525 over 5 years.

Maintenance: EVs skip oil changes, many fewer brake jobs (regenerative braking), and have no exhaust or transmission fluid. Industry estimates put 5-year maintenance for a compact EV at roughly $2,200–$2,600 vs. $3,800–$4,500 for the gas car. Call it ~$1,500 saved on maintenance with the EV.

Combined, fuel and maintenance savings are about $5,000. That can offset the higher purchase price, so the new EV and the gas car end up in the same ballpark over 5 years — and in many states the EV wins once you add state incentives or lower electricity rates. The math tilts further toward the EV where gas is expensive (e.g. California) and electricity is relatively cheap.

Scenario 2: Used EV (With Tax Credit) vs. Used Gas

Used EVs have depreciated sharply. A 2–3 year old electric sedan or crossover often sells for $24,000–$30,000. If you buy from a licensed dealer for $25,000 or less and the vehicle is at least two model years older than the year you buy it, you may qualify for the used clean vehicle credit of up to $4,000 (30% of sale price, capped at $4,000). Income limits are lower than for new EVs: $150,000 for married filing jointly, $75,000 for single. That can bring your effective price to about $21,000 for a car that once cost $40,000+.

A comparable 2–3 year old gas sedan might run $20,000–$23,000 with no credit. So the used EV, after the credit, can be similar or cheaper to buy. Fuel and maintenance savings over the next 5 years then push total cost of ownership clearly in the EV's favor — as long as the battery is in good shape and you have a way to charge at home. Before you commit, run through a proper used-EV checklist: battery state of health, remaining warranty, and exactly how the 2026 tax rules apply to your purchase. We break that down in our Used EV Checklist: Battery, Warranty, and Tax Credits.

Scenario 3: When the EV Loses

The EV advantage shrinks or disappears in a few situations. Electricity cost: In states where residential rates are 30¢/kWh or higher, 5-year charging costs can approach or exceed what you'd spend on gas in an efficient gasoline car. Mostly fast charging: DC fast charging often runs 40–50¢/kWh or more; if that's the bulk of your charging, your "fuel" bill looks more like a gas car's. Low mileage: If you drive only 6,000–8,000 miles a year, fuel savings are smaller and may not offset a higher purchase price. No incentive: If you don't qualify for the new or used EV credit (income, price cap, or vehicle eligibility), the upfront gap between EV and gas stays larger and takes longer to close.

Bottom Line

In 2026, a new EV that gets the full $7,500 credit is often cost-competitive with a comparable gas car over 5 years when you include fuel and maintenance. A used EV under $25,000 with the $4,000 credit can be the cheapest option of all — provided you check battery health and warranty and buy from a dealer that can facilitate the credit. Run your own numbers with your local electricity rate, actual mileage, and eligibility for incentives; the answer to "Is an EV cheaper?" is increasingly yes, but it's not universal.

Sources: IRS (new and used clean vehicle credits, income/price rules); EIA (residential electricity prices, gasoline); industry TCO and maintenance studies (e.g. DOE, Consumer Reports, Recurrent).