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Big Gap Remains in Average Price of Electric Car vs. Gas Car

Everything you need to know about paying cash for a car

An unpleasant truth about EVs is that they almost always have higher retail prices than their internal combustion engine (ICE) counterparts. In the first quarter of this year, there was a 42% gap in the average price of an electric car vs. a gas car.

The biggest gap in MSRPs, according to Edmunds price data, was 58.5% in the popular and relatively crowded compact SUV category. The average fully electric model, with a starting MSRP of $53,048, was a wallet-draining $17,326 more than the average of $35,722 for a gas-burning compact crossover.

The smallest gap was for large pickups: 18% at $76,475 for electrics versus $64,784 for ICE vehicles.

The price gap remains

EVs cost more to build than internal combustion engine vehicles of similar size and with similar features. That's been a fact since the dawn of the modern EV age, back in 2011.

Pundits promise that the gap will narrow and ultimately disappear. EV volumes will increase, bringing economies of scale into play. Battery technology will improve, making batteries less costly. Increasingly stringent air quality rules will require increasingly complex and costly emissions technologies for ICE vehicles, making them ever more expensive.

All that is true, but the timing is a big question mark. For the past three years, despite increasing EV sales, the price gap between electric and gas cars has remained fairly stable.

A note: We're talking MSRP — manufacturer's suggested retail price — and not actual transaction prices, which can include negotiated discounts, sale prices and dealer markups, along with factory incentives and federal, state and local tax breaks for EVs and plug-ins. Prices also include the destination and delivery charges levied by almost every automaker. High-performance versions and exotics aren't included; hybrids — conventional and plug-in — are in the internal combustion engine category.

It's not all about MSRP

Most shoppers tend to focus on the monthly payment or initial price of a vehicle rather than the total cost of ownership. That electric truck may have a higher MSRP but can end up being the smarter buy once fuel, maintenance and repairs, insurance, and available incentives are figured in.

For EV shoppers, the lease vs. purchase decision also is critical, said Jessica Caldwell, Edmunds' executive director of insights. Only a handful of EVs qualify for a cost-reducing federal clean vehicles incentive when purchased, but all qualify for the full $7,500 when leased.

If all EV transactions were leases, the average price gap after applying the federal incentive would be slashed by almost 50%.

Interest costs, too, are important and shopping for lower-interest financing can be as critical as shopping by MSRP. Edmunds offers loan rate and loan payment calculators that can show you how much you'll pay over the life of a loan at various interest rates.

Time will tell

The final factor in determining whether an EV will be cheaper than a gas car is the length of ownership. EV savings build up over time.

Someone who keeps a car for just a few years might not see those savings erase the purchase premium of an EV. A person who keeps a car for several years almost certainly will.

A recent total cost of ownership study comparing projected seven-year costs of the five most popular gas cars of 2023 and their closest electric counterparts found that in every case, the EV would save money despite its higher purchase price. The study, released earlier this year by the Natural Resources Defense Council and performed by Atlas Public Policy, found that savings ranged from just over $100 to just under $11,000.

Lots of luxury

The gap in the average price of an electric car vs. a gas car is as big as it is right now largely because carmakers tend to put their newest and best technologies in their most expensive models first. That means there are more luxury- and premium-level EVs than entry-level models, skewing average EV prices higher.

Americans bought 266,343 EVs in the first quarter of 2024. Luxury and premium trims — the bulk of them Tesla models — accounted for an impressive 72% of the total.

Vive la différence

To get a better idea of price differences, let's look at top-selling ICE and EV models in the various size classifications for the first quarter of this year.

Subcompact car

The average MSRP in this category is $22,627 for ICE models and $31,895 for EVs.

Kia's internal combustion engine Soul wagon is the leader in subcompact car sales. It ranges from $21,565 to $25,865. Nissan's Versa sedan, in second place, ranges from $17,863 to $21,830.

There's only one electric competitor in the class, the Mini Electric Hardtop, which is sold in one trim level that starts at $31,895.

Subcompact SUV

Among the smallest SUVs and crossovers, the average price for a gas model is $28,990 versus $40,917 for the average EV.

Honda's HR-V, priced from $26,450 to $30,550, and Chevrolet's Trax — at $21,495 to $25,395 — are the class leaders for small internal combustion engine SUVs.

On the electric side, the Hyundai Kona Electric, at $34,050 to $42,420, and the Kia Niro EV, at $40,975 to $45,975, are the top-selling subcompact SUVs.

Compact car

Pricing gets a little closer here, with the average for ICE models at $26,301 and the average for EVs at $34,538.

In the ICE column, Honda's Civic and Toyota's Corolla lead the class. The Civic ranges from $25,045 to $32,545 and the Corolla from $23,145 to $28,345.

While the BMW i4 doesn't compete with the Civic or Corolla, it is the best-seller among compact electric cars, ranging from $53,195 to $62,595. The Polestar 2 is in second place and is priced from $51,300 to $53,500.

Nissan's Leaf brings up the rear. We're including it because It is the lowest-priced of all EVs, with a starting MSRP of $29,280. Factor in the $7,500 federal tax credit that Leaf buyers can get and the actual acquisition costs fall to $21,780 for the base trim. For buyers who qualify for the full tax incentive, the Leaf is cheaper than any ICE compact sedan but the $21,145 Kia Forte.

Compact SUV

This is the most popular class in the market for both internal combustion vehicles and EVs. But on the electric side of things, premium and luxury models — and prices — dominate the list. The category's average ICE model price of $35,722 is 32.6% lower than the average EV price of $53,048.

The Toyota RAV4, ranging from $30,025 to $41,380, is the best-selling gasoline model, followed by the Honda CR-V, ranging from $30,850 to $41,550.

The Ford Mustang Mach-E, with pricing ranging from $41,890 to $61,890, holds down first place among compact electric SUVs and crossovers. Hyundai's Ioniq 5 crossover, with an MSRP ranging from $43,175 to $60,775, is second.

Midsize car

This is a big category for internal combustion vehicles, not so much for EVs. The average midsize electric sedan is $49,554, and the average ICE model goes for $32,035.

The Toyota Camry leads the internal combustion engine group, trailed closely by the Honda Accord. The Camry ranges from $27,515 to $37,940, and the Accord is priced between $28,990 and $39,985.

Among comparable electric midsize sedan models, the Tesla Model 3 — the second most popular of all EVs — leads the pack. Model 3 MSRPs, which have been changing frequently, now range from $40,630 to $55,630. Hyundai's Ioniq 6 is in distant second place. Pricing starts at $38,650 and rises to $51,300.

Midsize SUV

Prices rise in the midsize SUV and crossover class. The average ICE model here is $48,916, while the average EV, thanks to several luxury models, is $72,046.

Ford's Explorer is the most popular gas model in this category, with pricing ranging from $41,220 to $56,800. The MSRP for the second-place Subaru Outback runs from $30,240 to $44,140.

The top seller among midsize electric SUVs is Tesla's Model Y — the best-selling EV in the entire market. As of the middle of the second quarter of 2024, MSRPs ranged from $44,630 to $53,130. The Cadillac Lyriq is in far distant second place, with prices ranging from $58,590 to $63,190.

Large car

There's a big pricing spread in this class, with the average ICE vehicle at $49,988 and the average EV at $72,240.

The recently canceled Dodge Charger and the new Toyota Crown top the ICE list. MSRPs range from $36,920 to $59,515 for non-performance Chargers and from $41,445 to $54,465 for the Crown.

The Tesla Model S, priced from $74,630 to $89,630, tops the sales chart among large electric sedans. The Lucid Air is next, with pricing from $71,400 to $155,650.

Large SUV

Things get really crazy among big SUVs, with gas versions averaging $78,774, compared to $101,145 for EVs.

This is also domestic territory, with the Chevrolet Tahoe and Ford Expedition duking it out for top sales honors. Tahoe pricing runs from $58,195 to $78,895. Expedition MSRPs start at $57,520 and top out at $82,690.

Tesla's Model X, priced from $79,630 to $94,630, leads this segment's EV lineup, followed by the Mercedes-Benz EQS SUV, which ranges from $105,550 to $128,500.

Large truck

America's fascination with pickups has helped keep prices high in the full-size category, with the average for ICE models at $64,784 and for electrics at $76,475.

The F-150 from Ford leads the gasoline gang, with prices for SuperCrew models — which directly compare to the electric version — ranging from $45,510 to $75,730. Chevy's Silverado 1500 is in second place, with pricing for two-row models running from $44,595 to $71,895.

Ford and Chevy repeat their 1-2 finish in the large electric truck class as well, with the F-150 Lightning ranging from $57,090 to $87,090 and the Silverado 1500 EV, so far available only in one highly equipped version, with an MSRP of $96,495.

Edmunds says

Total cost of ownership — the metric every professional fleet manager uses in deciding which models to buy — is more important, and study after study has found that EVs, if kept for five years or more, generally will end up costing less than a gas car with the same features

Range and the availability of working public chargers can, for some, be valid reasons for shying away from an EV purchase. But for most of us, those higher EV price tags don't have to be a barrier.


See Edmunds pricing data

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