AAA Report: Gas-Powered Cars Cheaper than Electric Vehicles
A recent analysis by the American Automobile Association (AAA) indicates that gas-powered vehicles are generally more cost-effective than electric vehicles (EVs) when considering the total ownership expenses.
With electricity rates expected to rise and gas prices dropping as we move into autumn, AAA warns that by 2025, EVs could become the most expensive vehicle category. This situation contrasts starkly with efforts previously made by former President Joe Biden to promote EVs while restrictions on oil and gas leasing were simultaneously in place. The Trump administration, on the other hand, expanded oil and gas opportunities, contributing to a decrease in gas prices.
“This new assessment by AAA highlights a significant irony in the current enthusiasm for ‘clean’ energy. Rising energy costs have been a primary goal for advocates of climate change measures. But now that the actual drivers behind these rising costs are coming to light, it seems clear that what these advocates achieved was not just a push for green energy but also a decrease in the competitiveness of gas-powered cars,” an analysis observes.
The AAA report reveals a decline in vehicle costs from $12,297 to $11,577, which translates to about $964 a month—a notable drop since 2024.
“While EVs continue to carry a heavier burden in terms of ownership costs—like depreciation, insurance, and financing—they do enjoy lower operational costs, especially concerning fuel and maintenance. Last year, fueling an EV was about a third the price of filling a gas vehicle. However, with gas prices dropping significantly this year, while electricity costs climbed slightly, the overall ownership costs of EVs still seem to outpace the fuel savings,” the report states. This led to EVs becoming pricier across all categories evaluated.
Despite the Biden administration pushing for subsidies and backing California’s stringent EV mandates, several initiatives faced hurdles, particularly from Congress and former President Donald Trump. Some EV tax credits are also set to expire by September 30th.
Aging electrical infrastructure is becoming problematic, placing stress on the power grid. Some states are closing coal plants quickly to meet clean energy goals, further exacerbating supply issues. At the same time, gasoline prices are trending downward, with expectations for prices to hit 20-year lows, apart from a brief spike in 2020.
