Fuel savings: Where it’s profitable to switch to an electric vehicle in the US
A new study of the American auto market shows how much a driver can save on fuel by switching to an electric vehicle. Nationwide, replacing a gasoline car with a typical EV charged at home allows savings of nearly $1,500 per year. However, this amount varies significantly by state — the greatest benefit is seen in the West.
Bloomberg analysts compared the average distance driven by Americans with typical fuel and electricity prices. Washington state took the lead, where gasoline prices are among the highest in the country, while electricity is among the cheapest thanks to hydroelectric plants. Local residents switching to an electric vehicle can save up to $2,346 per year. Oregon ranks second with savings of $2,057.
Other states where gasoline costs significantly exceed the cost of charging an EV include Nevada, Arizona, Idaho, Montana, Utah, Wyoming, and Colorado. According to a JD Power survey, about a third of drivers considering buying an EV cite fuel savings as their main motivation.
The same survey showed an increase in interest in May: 26% of car buyers identified themselves as “very likely” candidates to switch to electric, up three percentage points from a year earlier.
Electric vehicle market share by state (January-April 2026)
| State | EV Market Share |
| California | 15.7% |
| Washington | 13.8% |
| Nevada | 11.1% |
| Hawaii | 9.1% |
| Oregon | 8.4% |
| US Average | 5.5% |
| Wyoming | 1.3% |
| South Dakota | 1.2% |
| North Dakota | 1.1% |
| West Virginia | 1.1% |
| Oklahoma | 0.6% |
Costs working the other way
It must be acknowledged that the average EV still costs more than its gasoline counterpart, but buyers benefit from lower operating costs and less maintenance. The price gap is gradually narrowing, although EVs depreciate faster. The recent surge in fuel prices caused by the war in Iran has only strengthened the arguments in favor of electricity.
At the same time, Bloomberg reports that electricity prices have also risen — by 8.6% over the last 12 months, partly due to demand from data centers for artificial intelligence. However, this increase is minor compared to the jump in gasoline prices.
Given how high gas prices are, you save everywhere, but in these places the savings are particularly noticeable. It is, without a doubt, a huge advantage, — noted Cory Cantor, Director of Research at the Zero Emission Transportation Association.
Cantor added that buyers often ignore fuel costs: “You see gas prices everywhere, but you don’t necessarily see the price per kilowatt-hour unless you use an app. You have to calculate it yourself.” States where electricity is cheap and gas is expensive, in his opinion, are the most promising for the transition to EVs: “These are the places that give optimism about the long-term transition to EVs because market forces are at work here.”
The hidden pitfall: insurance
Of course, there is a downside. The analysis of fuel savings does not account for insurance, where EVs lose out. A separate study by Insurify showed that in Washington state, which tops the savings ranking, insuring a new EV costs 30% more than a gasoline counterpart: $3,260 versus $2,515. In Oregon, the difference reaches 36%, and in Nevada, 26%. Thus, part of the charging savings goes towards insurance.
However, the picture is not universally bleak. Nationwide, insuring an EV averages $3,159 per year compared to $2,218 for a gasoline car — a difference of 42%. But when comparing only 2024 models and newer, the gap narrows to 18%.
In some states, the situation is reversed. In Montana and West Virginia, insuring a new EV costs 4% less than a gasoline car, and Nebraska shows a similar trend. None of these factors negate the fuel savings, but the real cost of operating an EV depends not only on the difference between gas and electricity prices but also on insurance rates in a specific region.
Overall, while fuel savings are a strong argument for switching to EVs, especially in western states, the real financial benefit depends on many factors. The cost of insurance, which can be significantly higher for EVs, partially offsets the savings. Additionally, rising electricity prices, albeit slower than gasoline, also affect the overall picture. Thus, the decision to buy an EV should be based on a comprehensive cost analysis, including not only fuel but also insurance, maintenance, and depreciation, considering local conditions.