Why electric cars cost less to own each month than gas cars even though they're way more expensive

• Electric cars are more expensive than similar gas-powered options.
• But EVs cost less to own when you consider monthly payments, maintenance, insurance, and fuel.

Many people are scared away from going electric when they see how much a battery-powered car costs. And who can blame them? The cheapest gas car in the US retails for around $15,000, while the lowest-cost electric car will run you roughly double that.

But new research shows that buyers comparing sticker prices are thinking about things all wrong. They should be thinking about monthly payments, since the overwhelming majority of people finance their vehicles.

When you stop thinking about a lump sum and instead look at the monthly cost of owning an electric car — factoring in fuel savings, maintenance costs, and state incentives for EV purchases — buying one starts to look a lot more economical than a comparable gas car, according to a report from Energy Innovation and Technology LLC, an energy and climate policy think tank.

Previous research has shown that the high upfront cost of an EV may be worth stomaching for cheaper fuel and maintenance costs down the line, but the Energy Innovation and Technology LLC report determined that, in most states, it costs less to own an EV than a similar gas car from day one.

Researchers studied six electric models: the Hyundai Kona Electric SEL, the Kona Electric Limited, the Ford F-150 Lightning Pro, the Kia Niro EV EX Premium, the Volvo XC40 Recharge Plus, and the Nissan Leaf. Each model was compared against an equivalent combustion-engine vehicle from the same brand.

The firm determined the monthly cost to own each vehicle over its financing term, including loan payments, maintenance, gas/electricity costs, insurance, and other taxes and fees. Researchers modeled costs across all 50 states, accounting for a federal $7,500 tax break for clean-vehicle purchases, state-specific programs, and energy costs in different states.

The Kona Electric SEL and F-150 Lightning Pro were cheaper to own per month in every state despite carrying a $10,000 premium over their gas counterparts. Annual savings for those vehicles added up to $800 and $1,400, respectively. Three other models — the XC40 Recharge, Leaf, and Kona Electric Premium — had cheaper monthly costs in about half the country. Where they were more expensive, it was often by $15 or less, the report said.

Some of the most EV-friendly states, according to the study: California, Colorado, Delaware, New Jersey, Oregon, and Washington.

The savings only get better once an owner pays off their loan, since EVs are more efficient and require less maintenance than combustion-engine cars. Once it's paid, each EV in the study costs $1,500-$3,000 less to operate each year than its gasoline equivalent, according to the report.

Boosting the federal EV tax credit to $10,000 would make electric cars the more economical choice across the vast majority of the US, Energy Innovation and Technology LLC said.

The report adds to a growing body of research indicating that electric cars are cheaper over their lifetimes than conventional vehicles. But good luck finding one to buy right now. Thanks to supply-chain problems and big demand, there aren't enough electric cars to go around.