![\"Fuel](\"https:\/\/www.newsbeep.com\/il\/wp-content\/uploads\/2026\/04\/be60412270a4d8567bc0f08d9625386a.jpeg\")
Fuel costs alone do not make EVs the best financial choice for consumers. – Getty Images <\/p>\n Fuel costs alone do not make EVs the best financial choice for consumers. – Getty Images <\/p>\n
Higher gas prices have more people looking at electric vehicles \u2014 but if you\u2019re EV-curious, it\u2019s important to remember that fuel costs are far from the only factor when deciding whether an EV makes financial sense.<\/p>\n
American car shoppers have increasingly been eyeing electric vehicles in the wake of the U.S. and Israel\u2019s war with Iran, which has sent gas prices up to an average of more than $4 a gallon across the U.S.<\/p>\n
Most Read from MarketWatch <\/p>\n
From the end of February to the end of March, searches for new and used EVs on Cars.com increased by 25%, according to data from the company. Half of surveyed car shoppers said they are considering an EV or a plug-in hybrid EV due to rising gas prices. Even car-rental companies are seeing a surge<\/a> of interest in EVs.<\/p>\n Even as electricity rates have increased<\/a>, charging an EV still costs less than filling up a gas tank. A new Kelley Blue Book analysis<\/a> estimates someone driving the national average of 1,015 miles per month would \u201cneed to refuel about three times each month and spend about $147.24 ($49.08 x 3) for gas, compared to $59.66 for charging an EV at home\u201d at the average 17.65 cents per kWh.<\/p>\n Yet fuel costs alone do not make EVs the best financial choice for consumers. Simply put, \u201cspending $55,000 to save on $5-per-gallon gas, the economics don\u2019t work out,\u201d Ivan Drury, director of insights at Edmunds, told MarketWatch.<\/p>\n A car should meet your needs in terms of size and other features first. \u201cDon\u2019t rely on the price of gas to make your determination,\u201d he said. \u201cThe worst thing you can do is drive it for a year and say, \u2018You know what? This just doesn\u2019t work for my family,\u2019\u201d and end up trading in a car with thousands of dollars in negative equity<\/a> \u2014 a more severe problem with EVs, which depreciate in value quickly.<\/p>\n Read more: These hidden costs of car ownership are giving buyers sticker shock long after they leave the dealership<\/a><\/p>\n High price to buy or lease EVs <\/p>\n First, there\u2019s the high cost of EVs for those planning to buy. The average transaction price for a new electric car was $56,170 in March, according to data from the car-buying site Edmunds. Dealers lowered EV prices from the average $60,446 a year ago to compensate for the loss of the EV tax credit, which expired in September 2025.<\/p>\n Despite those reductions, EV prices remain considerably higher than the average $45,092 for new non-EVs.<\/p>\n Even used EVs are more expensive than other options, with an average sales price of $31,817 compared to $25,839 for all used cars.<\/p>\n Meanwhile, the price to lease EVs remains high as well. While there are still attractive EV lease deals<\/a> \u2014 with some dealers offering payments of less than $300 per month with $4,000 down \u2014 on average, the monthly payment on a new EV lease in March was $665, compared to $594 for non-EVs, according to Edmunds.<\/p>\n At this point, \u201cthe ideal [EV] customer is one who has the easiest way to charge, and who doesn\u2019t have a long commute,\u201d said Drury \u2014 not consumers who are price sensitive.<\/p>\n More more MarketWatch: Buying a car out of state can save you thousands of dollars \u2014 but ask these 3 questions first<\/a><\/p>\n What to consider if you\u2019re looking at an EV <\/p>\n Recent policy changes have created potential hurdles for EV drivers. After allowing the EV tax credit to expire last year, the Trump administration has also halted funding<\/a> to build charging stations and has proposed<\/a> a requirement that chargers contain mostly domestically made parts.<\/p>\n \u201cThe Trump administration is committed to maximum optionality for American consumers without Joe Biden\u2019s heavy-handed mandates,\u201d White House spokesman Kush Desai told MarketWatch in an email. \u201cThe Trump administration\u2019s proven economic agenda of tax cuts, rapid deregulation and energy abundance is creating a prime growth environment for businesses and consumers alike.\u201d<\/p>\n Local incentives for EV buyers may still be available \u2014 including newly announced funding<\/a> in New York state \u2014 but the uncertainty surrounding the EV market has slowed sales. Electric vehicles went from 10.6% of new-car sales in the third quarter of 2025 to 5.8% in the first quarter, according to Cox Automotive data<\/a>.<\/p>\n Demand for hybrids, on the other hand, has continued to \u201cdemonstrate solid growth,\u201d Cox noted<\/a>, led by Toyota TM JP:7203 and Honda HMC JP:7267.<\/p>\n Related: Americans would love this $25,000 hybrid SUV \u2014 but it\u2019s not available here yet<\/a><\/p>\n As EV sales increased<\/a> in other countries, \u201cthe U.S. EV market has clearly entered a new phase,\u201d said Stephanie Valdez Streaty, Cox\u2019s director of insights, in a statement<\/a>. \u201cWhat comes next will be driven less by policy and more by fundamentals: more affordable products, smarter pricing strategies and continued investment in infrastructure.\u201d<\/p>\n The bright spot for the EV industry has been the used market, where demand remains positive, according to a recent report<\/a> by CarGurus. Used models such as the Tesla TSLA Model Y (with an average price of $30,100), Hyundai KR:005380 Ioniq 5 ($25,500), and Chevy GM Equinox EV ($26,200) were popular in the first quarter.<\/p>\n