Electric vehicle (EV) advocates often claim EVs are only marginally more costly, or even cheaper, than internal combustion engine vehicles (ICEVs). The claim accounts only for costs paid directly by EV owners. Adding costs paid by other taxpayers through government subsidies and tax credits tells a different story.

Comparing the Costs

Argonne National Laboratory (federally funded) estimates:

• Owner’s Purchase Cost: average EV costs ~$22,000 more than average ICEV
• Owner’s Operating Cost: average EV costs ~$14,000 less than average ICEV in 15 years (excludes ~$22 billion in government subsidies and tax credits)
• Owner’s Combined Cost: average EV costs ~$8,000 more than average ICEV in 15 years (~$536.46/yr)

(Source: Burnham et al. (2021), “Comprehensive Total Cost of Ownership Quantification for Vehicles with Different Size Classes and Power Trains,” https://www.anl.gov/argonne-scientific-publications/pub/167399.)

Texas Public Policy Foundation (privately funded) reveals hidden costs of EVs:

• Owner’s Purchase Cost: average 2021 EV costs ~$22,000 more than average ICEV (~$2,200/yr in 10 years)
• Owner’s + Taxpayers’ Operating Cost: average 2021 EV costs ~$40,651 more than average ICEV in 10 years ($4,065/yr) (includes ~$22 billion in government subsidies & tax credits)
  • Includes combined owner- and government-borne (= taxpayers-borne) cost of electricity equivalent to $17.33 per gallon of gasoline
  • Excludes hundreds of billions of dollars in Inflation Reduction Act subsidies to the EV supply chain (especially battery manufacturing)
• Owner’s + Taxpayers’ Combined Cost (excluding IRA supply chain subsidies): average 2021 EV costs ~$48,698 more in 10 years than average ICEV (~$4,900/yr)

Source: Bennett and Isaac (2023), “Overcharged Expectations: Unmasking the True Costs of Electric Vehicles,” https://www.texaspolicy.com/wp-content/uploads/2023/10/2023-10-TrueCostofEVs-BennettIsaac.pdf.

Cui Bono? (Who Benefits?)

In 2023:

• 4% of American households owned EVs, and over two-thirds of those were Californians;
• about 60% of EV owners had annual household income over $100,000, while only 20% had household incomes below $50,000;
• about 6% of households with income of $100,000 or more owned EVs, 3% of households with incomes of $40,000–$100,000, and 2% of households with incomes under $40,000;
• 6% of EV owners were Democrats, 4% Independents, and 1% Republicans;
• Californians owned 37% of all EVs in the US—5 times second-place Florida, 6 times third-place Texas, 9 times fourth/fifth-place Washington & New Jersey, and 12 times sixth/seventh/eighth-place New York, Illinois, and Georgia.
• Residents of the top 8 states owned about 6,700 in 10,000 of all EVs registered in the country; the bottom 20 states, fewer than 2 in 10,000.

Sources: Brenan (2023), “Most Americans Are Not Completely Sold on Electric Vehicles,” Gallup Organization, https://news.gallup.com/poll/474095/americans-not-completely-sold-electric-vehicles.aspx; Dugdale (n.d.), “Electric Vehicle Inequities,” https://www.parking-mobility.org/2022/12/19/electric-vehicle-inequities; Alternative Fuels Data Center, “Maps and Data—Electric Vehicle Registrations by State,” https://afdc.energy.gov/data/10962.

Conclusion

Federal and state EV subsidies and tax credits effectively redistribute income from poorer to richer, from Republicans and Independents to Democrats, and from 96 percent to 4 percent. The average EV owner receives the equivalent of $4,900 per year from fellow citizens for owning and operating an EV.