Total Cost of Ownership Analysis

Total cost of ownership includes all costs over the vehicle's useful life: acquisition (purchase price minus incentives and residual value), energy (fuel or electricity), maintenance (scheduled and unscheduled), insurance, registration and taxes, and downtime costs. A proper TCO comparison between an EV and ICE vehicle must use the same duty cycle, annual mileage, and ownership period. The acquisition cost difference has narrowed significantly—the average EV is now only $3,000-8,000 more than its ICE equivalent before incentives. After federal and state incentives, many EVs reach purchase price parity.