A new study by personal finance platform MoneyLion has found that where American drivers live significantly affects the cost of owning an electric vehicle. The analysis broke down average six-year ownership costs by state, including annual charging expenses, auto loan payments and interest charges.
The top five cheapest states for EV ownership were Delaware, Oregon, Montana, New Hampshire and Alaska — all of which share one common characteristic: no sales tax on vehicle purchases. The research revealed substantial geographic disparities in what consumers pay to drive electric.
What the Left Is Saying
Environmental advocates point to the broader policy implications of making EVs more accessible across all regions. Peter Zalzal, an attorney with Environmental Defense Fund, emphasized the long-term financial benefits for consumers who make the switch.
"We're talking about thousands and thousands of dollars," Zalzal said. "And as gas prices increase, those savings are only greater. Fuel costs are a big piece of overall vehicle costs, and increases in fuel prices have significant impacts on people."
Progressive policy advocates argue that state tax structures should be reformed to encourage EV adoption nationwide, not just in states without sales taxes. They contend that federal and state incentives can help bridge the gap between higher upfront EV prices and long-term savings.
What the Right Is Saying
Fiscal conservatives raise concerns about government intervention in consumer vehicle choices through tax incentives and regulatory mandates. Some Republican policymakers have questioned whether EV subsidies primarily benefit wealthier consumers who can afford higher purchase prices.
State tax policies reflect local priorities and economic conditions, conservative commentators note. The absence of sales tax in states like Delaware or New Hampshire represents policy choices made by those state legislatures based on their own fiscal situations, not a template that should be imposed federally.
What the Numbers Show
The MoneyLion study used an average EV price of $55,211 and assumed a 13.5 percent down payment of $7,453, calculating six-year total costs including charging and loan interest.
Annual charging costs varied significantly by state — Kansas residents paid around $901 per year at the low end, while West Virginia drivers faced $1,593 annually for the same 1,000 miles per month of driving. The study assumed a 245-mile average charge range.
The five most expensive states for EV ownership were Washington, Tennessee, California, Illinois and Louisiana, respectively — all states with sales taxes that add to vehicle purchase costs.
According to Cox Automotive data, the average cost of a new EV exceeded $55,200 in April. By comparison, the average new gasoline-powered car cost $49,461 for the same month — roughly $5,700 less upfront.
The Bottom Line
The study highlights how state tax policies create significant variation in what consumers pay to own electric vehicles over time. While EVs carry higher purchase prices than traditional cars, proponents argue that lower fuel and maintenance costs can offset the initial investment.
University of California, Davis economics professor Erich Muehlegger noted that residential electricity prices are regulated and less volatile than gasoline prices, meaning EV owners are largely insulated from oil price shocks caused by geopolitical events. This stability appeals to consumers seeking predictability in transportation costs, though critics note it comes with trade-offs related to grid infrastructure and charging accessibility in some regions.