Are Electric Vehicles Still Worth the Cost Without Federal Tax Credits?

Higher Gas Prices Strengthen the Case for EVs, but Depreciation, Charging Access and State Fees Complicate the Math

The financial case for buying an electric vehicle changed significantly when the federal government ended the $7,500 new EV credit and $4,000 used EV credit on September 30, 2025. For households financing a vehicle, the loss of several thousand dollars in purchase assistance can determine whether an electric model remains affordable.

However, the disappearance of federal incentives does not necessarily mean EVs are no longer cost-effective. Gasoline prices climbed sharply in 2026, electric vehicles continue to require less routine maintenance, and some states still offer purchase incentives worth thousands of dollars.

An analysis by Attorney Brian White found that the true cost of EV ownership depends on far more than the sticker price. Depreciation, collision repairs, charging location, temperature, state registration fees and access to workplace charging can all change the equation.

For some drivers, particularly those who can charge at home, an EV may continue to produce meaningful savings. For others who depend on public fast chargers or live in states with limited infrastructure and high annual fees, the cost advantages can quickly narrow.

Depreciation Remains the Largest Financial Risk

Depreciation is typically the largest five-year vehicle ownership expense in the United States, exceeding fuel, maintenance and insurance costs combined.

Across all vehicle types, the average vehicle loses approximately 45% to 46% of its value over five years. Gasoline vehicles typically lose between 40% and 50%, while EVs commonly depreciate by 55% to 60%.

Average Five-Year Vehicle Depreciation

Vehicle Category	Average Value Lost	General Pattern
All vehicle types	45% to 46%	Market-wide average
Gasoline vehicles	40% to 50%	Many sedans and SUVs fall within this range
Electric vehicles	55% to 60%	Higher losses among early and short-range models
Best-retaining EVs	30% to 40%	Select models compete with strong gas vehicles
Worst-retaining EVs	65% to 70%	Often early luxury or problem-prone models

The depreciation gap is one of the strongest arguments against EV ownership, particularly for drivers who expect to sell or trade their vehicle within five years.

Rapid advances in battery range, charging speed and driver-assistance systems can make older electric models appear outdated more quickly than gas-powered vehicles. First-generation models from less-established manufacturers can be especially vulnerable when buyers question battery longevity, repair access or long-term brand support.

The picture is not uniform, however. Newer long-range EVs with stronger warranties and better charging compatibility are retaining value more successfully. Some of the strongest-performing electric models now lose only 30% to 40% of their value over five years.