The Bottom Line: After a 5-year analysis of all costs—including depreciation, incentives, fuel, insurance, and maintenance—the average American driver will save approximately $6,000 to $10,000 by choosing a mid-range EV over a comparable gasoline-powered SUV. While the initial purchase price is higher, the significantly lower fuel and maintenance costs create substantial long-term savings.
Why This Analysis Matters in 2025 / 2026
The debate between EV and gas is no longer about just range anxiety or performance. It’s a critical financial decision. With fluctuating gas prices, a complex web of federal and state EV incentives, and changing insurance rates, a simple sticker price comparison is dangerously misleading. This guide provides a transparent, data-driven framework to calculate the total cost of ownership, empowering you to make a sound financial decision for your family.
The Contenders: A Real-World Showdown
To provide a true apples-to-apples comparison, we’ve selected two of the most popular, comparably equipped compact SUVs on the market:
Both vehicles offer similar size, features, and build quality, making them the perfect candidates for a cost analysis. All figures are national averages unless otherwise specified; your actual costs will vary.
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The 5-Year Cost Breakdown: Every Dollar Accounted For
We will analyze every expense over a 60-month ownership period, assuming an average of 13,500 miles (approx. 21,700 km) driven per year.
1. Purchase Price & Incentives (The Upfront Cost)
This is the most visible cost, but it’s heavily influenced by government incentives.
Vehicle
MSRP
Federal Tax Credit
Net Upfront Cost
Hyundai Ioniq 5 SE
~$44,000
-$7,500
$36,500
Hyundai Tucson SEL
~$29,500
$0
$29,500
Analysis: Even after the federal tax credit, the EV carries a $7,000 initial price premium. State incentives (like those in California or Colorado) can reduce this further, but for most buyers, the EV starts in a deeper financial hole.
2. Depreciation (The Hidden Cost)
Depreciation is the single largest expense for any new car owner. We use 5-year resale value projections from industry data.
Vehicle
Net Upfront Cost
Est. 5-Year Resale Value
5-Year Depreciation Cost
Hyundai Ioniq 5 SE
$36,500
$19,500 (44%)
$17,000
Hyundai Tucson SEL
$29,500
$15,000 (51%)
$14,500
Analysis: Due to its higher initial cost, the Ioniq 5 is projected to lose more value in absolute dollars, costing an extra $2,500 in depreciation over 5 years.
3. “Fuel” Costs (Electricity vs. Gasoline)
This is where the EV begins its comeback. We assume a national average of $3.60/gallon for gasoline and $0.17/kWh for residential electricity.
Vehicle
Efficiency
Annual Miles
Annual Fuel Cost
5-Year Fuel Cost
Hyundai Ioniq 5 SE
3.4 miles/kWh
13,500
~$675
$3,375
Hyundai Tucson SEL
28 MPG
13,500
~$1,735
$8,675
Analysis: The EV is a clear winner here, saving over $5,300 in fuel costs over five years. For drivers in states with high gas prices like California, these savings can easily exceed $8,000.
4. Insurance Costs
Insurance rates for EVs are often slightly higher due to higher repair costs for specialized components.
Vehicle
Est. Annual Premium
5-Year Insurance Cost
Hyundai Ioniq 5 SE
~$1,950
$9,750
Hyundai Tucson SEL
~$1,700
$8,500
Analysis: The EV costs an estimated $1,250 more to insure over the 5-year period.
5. Maintenance & Repairs
EVs have fewer moving parts, no oil changes, and less brake wear, leading to significant maintenance savings.
Vehicle
Est. 5-Year Maintenance Cost
Hyundai Ioniq 5 SE
$1,800
Hyundai Tucson SEL
$4,500
Analysis: With no oil changes, spark plugs, or timing belts to replace, the EV saves a substantial $2,700 in maintenance.
The Grand Total: A 5-Year Financial Verdict
Let’s add it all up to see the true total cost of ownership.
Cost Category
Hyundai Ioniq 5 SE (EV)
Hyundai Tucson SEL (Gas)
Depreciation
$17,000
$14,500
Fuel (Electricity/Gas)
$3,375
$8,675
Insurance
$9,750
$8,500
Maintenance
$1,800
$4,500
Total 5-Year Cost
$31,925
$38,175
Conclusion: Despite a higher upfront cost and greater depreciation, the massive savings in fuel and maintenance make the Hyundai Ioniq 5 a full $6,250 cheaper to own over five years.
Frequently Asked Questions
1. What about the cost of installing a home charger?
We haven’t included this as it’s a one-time home upgrade, not a vehicle cost. A Level 2 charger installation typically costs between $700 and $2,000. Even when factoring this in, the EV remains the cheaper long-term option.
2. Will the EV’s battery need to be replaced?
It’s extremely unlikely. All EVs sold in the US come with a minimum 8-year/100,000-mile battery warranty. Modern batteries are designed to last the life of the vehicle with minimal degradation.
3. How do different states affect the outcome?
States with high gas prices, high electricity rebates, and additional state EV tax credits (like California, Colorado, and Washington) will dramatically increase the savings of owning an EV. Conversely, states with very low gas prices and high electricity rates will narrow the gap.
Suhas is the founder and chief editor of vecharged.com, a leading US-based publication focused on the future of energy and mobility. With a deep passion for the technology that is shaping our world, his work focuses on providing clear-eyed analysis and rigorous, hands-on reviews of the latest electric vehicles, home solar systems, and portable power solutions. He founded vecharged to cut through the industry jargon and provide consumers with the data-driven, unbiased information necessary to navigate the clean energy transition with confidence. His insights have helped thousands of readers make smarter, more informed decisions about their energy use.
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