AUTOMOTIVE
IS IT CHEAPER TO DRIVE AN EV?
When considering everything from high gas prices to long-term ownership costs, buying an EV makes a lot of sense.
By Matt Bubbers | Illustration by Tom Froese
Sales of electric vehicles surged in Canada earlier this year. The reason? Affordability. For more drivers, EVs are becoming cheaper to own than their internal combustion engine (ICE) counterparts.
It may not yet be the case for every driver, but the math is increasingly tipping in favour of EVs when you consider the total cost of ownership. It’s a calculation that looks at not just purchase price, but factors in fuel and electricity prices, maintenance and other long-term costs.
“Even before recent events, the lifetime cost of an EV was typically less than for an ICE vehicle,” said Ian Jack, vice-president of public affairs at CAA National. “That’s more true today, with federal incentives back and the price of gas so high.”
Several factors came together like a perfect storm to make EVs more affordable and more appealing than ever for Canadians.
HIGH GAS PRICES
Gas prices spiked in the spring of 2026. The average price of gas in Canada hit $1.89 per litre in mid-June, and experts were predicting gas prices would stay relatively high all summer, which may lead more drivers to consider an EV soon. “The long-term trend is for EVs to get cheaper and the price of gas to go higher. Your mileage may vary on how quickly any of that will happen, but it is happening,” said Jack.
CHEAPER, BETTER EVs
While fuel is getting more expensive, EVs are getting cheaper, with compelling new models hitting the market.
Examples include the all-new 2026 Kia EV4, the updated 2026 Chevrolet Bolt and the all-new 2026 Nissan Leaf. All three cost just over $40,000 before government incentives, which is well below the price of the average new car — $48,000 according to the latest J.D. Power Canada data.
At $41,286, the Kia EV4 Light offers a driving range of 391 km, while the $45,286 EV4 Wind hits 552 km. Both models can recharge from 10 to 80 percent in about 30 minutes at a fast-charging station. Comparing the EV4 to Kia’s first EV, the 2015 Soul EV, shows how far the technology has come. The Soul cost nearly $50,000 after adjusting for inflation and had a range of 149 km.
Kia EV4. | PHOTO: COURTESY OF KIA
MADE-IN-CHINA EVs
Chinese-made EVs are also starting to drive down costs for consumers, and this is only the beginning. Tesla lowered the price of entry for its Model 3 rear-wheel-drive sedan to $42,132, including delivery and fees. Prior to that, the entry price was $79,990 for the all-wheel-drive Performance model.
After a barrage of U.S. tariffs on Canadian goods and retaliatory tariffs by Canada, the Canadian government lowered tariffs on a limited number — initially 49,000 — of Chinese-made EVs from 100 percent down to 6.1 percent. That allowed Tesla to bring its Chinese-made Model 3 to Canada at this new lower price.
Several major Chinese automakers — including BYD, Chery and Geely — are also now looking to enter the Canadian market. We don’t know yet which makes or models will arrive in Canadian showrooms, or at what price, but Chinese EVs typically undercut Western rivals by a significant margin. The Chinese Chery E5 electric SUV, for example, could theoretically retail for under $32,000, according to an estimate by B.C.-based think tank Clean Energy Canada.
Chery Omoda E5. | PHOTO: COURTESY OF CHERY
INTRODUCING THE EVAP
Last but certainly not least, the new federal Electric Vehicle Affordability Program (EVAP) is enticing buyers by offering a discount of up to $5,000 on new EVs and $2,500 on plug-in hybrid vehicles (PHEVs).
The incentive amount decreases over time, encouraging buyers to act fast if they want to take advantage of the full discount. On January 1, 2027, the maximum incentive drops to $4,000 for EVs and $2,000 for PHEVs. Over the first four months of the program, 34,601 buyers claimed the incentive.
It’s only applicable on vehicles with a pre-tax, pre-delivery fee value of $50,000 or less. EVs made in Canada are exempt from the cost cap, which is why the nearly $80,000 Dodge Charger Daytona Scat Pack is eligible. Chinese-made EVs, however, including the Tesla Model 3, are ineligible.
“The resumption of a federal tax credit has seen more consumer interest in EVs, and we certainly see that in market share figures,” said Robert Karwel, director of OEM solutions for J.D. Power in Canada.
In April 2026, sales of EVs and PHEVs were 21 percent higher than the same time last year, before the EVAP was introduced, according to Statistics Canada.
Dodge Charger Daytona Scat Pack. | PHOTO: COURTESY OF DODGE
While fuel is getting more expensive, EVs are getting cheaper, with compelling new models hitting the market.
CRUNCHING THE NUMBERS
With elevated fuel prices, filling up a popular SUV like the Toyota RAV4 costs roughly $2,775 per year, covering 15,000 to 20,000 km, according to CAA’s online Driving Costs Calculator. Travelling the same distance in the battery-powered Toyota bZ SUV costs roughly $625 per year in electricity. After five years, the fuel savings alone add up to $10,750.
EVs also cost less to maintain. According to CAA research, the average EV owner spends 40 to 50 percent less on maintenance compared to a gas-powered vehicle.
Adding it all up, the savings can be massive. Choosing an EV over an ICE vehicle could save a driver roughly $20,000 to $30,000 over the course of 200,000 km, according to a 2026 study by B.C.-based think tank Clean Energy Canada. And that was true before gas prices spiked in spring. The researchers found that in March, when gas was around $1.64 per litre, the savings from choosing the electric Chevrolet Equinox over the gas model would be $34,100 over 200,000 km, compared to $22,200 in February when gas prices were lower.
Of course, every driver’s circumstances are different. If you don’t drive much and won’t keep your car for a long time, an EV may not be cheaper. The lack of at-home charging could still be a dealbreaker for some drivers, too. But it pays to crunch the numbers yourself at CAA’s online Driving Costs Calculator. And, after careful consideration, you can decide for yourself. CAA
Related stories
The EV Charging Experience in Canada
The Cold Hard Facts: How EV Vehicles Fare in the Cold
CAA Reminds Motorists: Slow Down Move Over