The sticker price tells you almost nothing about what a car actually costs you. An electric vehicle often costs more to buy than a comparable gasoline car — and then quietly costs less every year you own it. The number that decides the argument is Total Cost of Ownership (TCO): everything you pay over the ownership period, minus what the car is worth when you sell it.
Done properly, a five-year TCO comparison is simple enough for a spreadsheet. Done badly, it becomes wishful thinking in either direction — EV fans forgetting depreciation, skeptics forgetting that a gallon of gas costs several times what an equivalent charge does. Here's how to build the calculation so the result actually holds up.
What Belongs in a Five-Year TCO Calculation
The core formula: depreciation + running costs + incidental costs = real cost of ownership. A robust comparison covers all of this for both cars:
|
Cost category |
EV |
Gasoline car |
|
Depreciation |
Purchase price minus expected resale value |
Purchase price minus expected resale value |
|
Energy |
Electricity consumption, charging losses, charging mix |
Fuel consumption and expected gas price |
|
Maintenance |
Servicing, tires, brakes, fluids |
Same, plus oil changes and more wear parts |
|
Insurance |
Individual quote for the exact model |
Individual quote for the exact model |
|
Taxes & fees |
Check current rules and exemptions |
Based on vehicle specifications |
|
Infrastructure |
Possibly a home charger + installation |
None required |
|
Financing |
Interest or forgone interest on savings |
Same |
Two of these rows deserve your full attention, because they decide most real-world outcomes: depreciation and energy.
Step 1: Compare Like With Like
Never compare an electric sedan with a noticeably smaller gasoline hatchback. For a fair fight, the two cars should match on:
- Vehicle class, size and cargo space
- Performance and trim level
- Age and mileage
- Equipment and options
Then determine the effective purchase price for each: the actual quoted price including delivery fees and required options, minus only incentives and discounts you are certain you qualify for under current rules. Incentive programs come and go — a comparison built on a rebate you didn't get is worthless.
Step 2: Estimate Resale Value — in Three Scenarios
Resale value is the single most uncertain input, and it's typically the largest cost category over five years for both powertrains.
- Use current used-car listings for similar models, published resale-value forecasts, or lease residual values as your data points.
- Calculate an optimistic, a realistic and a cautious scenario — never rely on a single estimate.
- Remember that gasoline cars carry resale risks too: future fuel costs, city access restrictions and shifting demand all press on their used values.
Step 3: Get Energy Costs Right — the Charging Mix Is the Variable
Official consumption figures won't get you there. Highway speeds, winter temperatures, short trips and payload all push real consumption above the rated number, for EVs and gas cars alike.
What actually separates one EV owner's costs from another's is the charging mix:
-
Home charging — by far the cheapest energy in the calculation. Consumer Reports' ownership-cost analysis found that an EV driver who charges mostly at home saves
800–1,000 per year in fuel costs versus an equivalent gasoline car, and owners of longer-range EVs cover over 90% of their miles on home charging alone.
- Public AC charging — moderately priced, use for occasional top-ups.
- DC fast charging — the expensive end. If you'd rely on fast chargers most of the time, price your calculation using your actual local network's rates, because fast-charging tariffs can erase much of the energy advantage.
And don't forget charging losses — roughly 10% of the energy you pay for never reaches the battery. Include them in the math. For gas cars, the equivalent trap is the EPA window sticker: FuelEconomy.gov documents how cold weather, short trips and aggressive driving push real-world consumption well above rated figures for combustion engines too.
One practical note for home charging: going from Level 1 (a standard wall outlet, painfully slow) to Level 2 doesn't require a $2,000 wall-box installation. A portable Level 2 J1772 EV charger plugged into a 240V outlet delivers full home-charging economics for a small fraction of the cost — which matters when you're allocating infrastructure costs to a five-year calculation. If you're unsure what the different charging levels actually mean for speed and cost, our Level 1 vs. Level 2 vs. DC fast charging explainer breaks it down.
Step 4: Maintenance — Real but Modest Savings
EVs have no oil to change, far fewer wear parts, and use regenerative braking that extends brake life. A U.S. Department of Energy study puts scheduled maintenance for a battery-electric car at about 6.1 cents per mile versus 10.1 cents for a gasoline car — roughly 40% lower.
But "lower" is not "zero": budget for tires (EVs can wear them faster due to weight and torque), cabin air filters, suspension work, and out-of-warranty repairs. For the gasoline car, add oil changes, spark plugs, transmission service and exhaust repairs.
Depreciation and the Battery Question
For an EV's resale value, the factors that matter are battery health, real-world range, charging speed, remaining warranty coverage and how quickly the segment's technology moves. For a data-backed view of what batteries actually lose over time, our guide to EV battery degradation after 3, 5 and 10 years shows what's normal — and why battery replacement usually isn't the ticking cost bomb buyers fear.
Two rules here:
- Don't automatically budget a battery replacement. Check the battery warranty (8 years/100,000 miles is standard in the US), the model's diagnostic data, and known issues. A replacement is a warranty event, not routine maintenance.
- Don't assume gasoline cars hold value better by default. Newer long-range EVs have been holding value comparably to gas cars, while gas cars face their own demand-side risks.
So When Does the EV Win?
Factors in the EV's favor:
- High annual mileage combined with cheap home or workplace charging
- Lower scheduled maintenance
- Favorable local electricity rates, especially time-of-use plans
Factors against:
- Relying mostly on expensive public DC fast charging
- High purchase price combined with low annual mileage
- An expensive home-charger installation allocated to only one low-mileage vehicle
Run Three Scenarios, Not One
Before you decide, build three versions of the spreadsheet — favorable, realistic and unfavorable — and vary the inputs: energy prices, consumption, resale value and repair costs. Two refinements that keep the result honest:
- Existing home charging infrastructure shouldn't be re-charged at full cost; a newly installed charger can be spread over its service life or across multiple vehicles.
- Compare both total five-year cost and cost per mile. A car that's cheaper per mile but costs $10,000 more upfront only wins if you keep it long enough.
The Bottom Line
For most drivers with access to home charging and average mileage, the EV's energy and maintenance savings comfortably outweigh its higher purchase price and infrastructure costs over five years. If you can't charge at home and depend on public fast charging, the math gets genuinely uncertain — and a hybrid may serve you better.
The purchase price starts the conversation. The five-year total ends it. Do the full calculation with your own mileage, your own electricity rate and three resale scenarios — and buy the car that's cheaper under your conditions, not the average driver's.
FAQ
Which costs belong in a five-year EV vs. gas comparison?
Depreciation, energy/fuel, maintenance, insurance, taxes and fees, financing costs, and any charging infrastructure. Include tires, periodic state inspections, and likely out-of-warranty repairs for both vehicles.
How do I compare energy costs fairly?
Multiply your real annual mileage by realistic consumption and your local energy prices. For the EV, separate cheap home charging from public AC and DC fast charging, and add roughly 10% for charging losses. For the gas car, use real-world fuel economy, not the EPA window sticker.
When is an EV cheaper over five years?
When you drive above-average miles, charge mostly at home or at work, and the purchase-price gap to the comparable gas car is moderate. Consumer Reports calculates lifetime savings of 6,000–10,000 for mainstream EVs versus comparable gasoline models under these conditions.
Should I budget for battery replacement in the TCO calculation?
Generally no. Treat it as a warranty question: check the battery warranty terms, the model's known issues, and available battery health diagnostics. What you should model is the effect of battery condition on resale value.
How do I estimate resale value after five years?
Use current listings of similar used cars, published residual-value forecasts, and lease residual numbers — then build optimistic, realistic and cautious scenarios. Never rely on a single estimate, for either powertrain.