If you’re looking to buy an electric vehicle (EV) in the US, you probably won’t find a better deal than New Jersey.
Climate policy think tank Energy Innovation compared the monthly cost of buying and owning six EV models to six similar gas-powered cars across all 50 states, assuming buyers would need to borrow to buy and make a monthly car payment. On average, the six EV models — including the Ford F-150 Lightning pickup truck, Nissan Leaf Compact and electric Hyundai Kona SUV — were cheaper than their gasoline counterparts in 48 states and Washington DC.
But no state has consistently offered better electric vehicle deals than the Garden State (home to 3.9 million private cars). “If you’re looking to buy an electric vehicle, New Jersey is the place to be,” said Robbie Orvis, who leads the energy policy team at Energy Innovation and compiled the data for a study (pdf) published May 12. His analysis takes into account country-specific financial incentives, tax breaks, electricity and gas prices, and estimates the cost of maintenance, insurance, and financing for each car model.
New Jersey offers the most EV incentives of any US state
New Jersey offers EV buyers a generous set of economic incentives: The state offers anyone who buys or leases an EV a $5,000 rebate and waives the standard 6.625% sales tax on car purchases. Also, unlike 30 other U.S. states, New Jersey doesn’t levy additional fees on EV owners to offset the money drivers no longer have to pay in gas taxes. (These fees can range from $50 to $225 per year.)
When you add these incentives to the $7,500 EV purchase tax credit offered by the US federal government, New Jersey car buyers get a pretty good deal for choosing an EV over a gas-powered car.
But Orvis points out that economic incentives like New Jersey’s rebate program and the state electric vehicle tax credit depend on funding from the legislature. Last year, New Jersey had to shut down its rebate program because so many people were buying electric vehicles that the program used up its $30 million annual budget in just three months.
Meanwhile, the federal EV tax credit only applies to automakers that have sold fewer than 200,000 EVs; Once a company exceeds this sales threshold, its customers are no longer eligible for a tax credit. Tesla buyers will no longer get a federal tax break in the US, and Toyota, Ford and Nissan could soon be banned unless Congress changes the rules. (Key senators have signaled they are not interested in expanding the tax credit.)
Hawaii and Rhode Island lag behind in EV affordability
The only two states where Energy Innovation data suggests that buying an electric vehicle is generally more expensive than a gas car are Hawaii and Rhode Island. Part of this has to do with states’ less generous tax incentives for EV sales. However, most of the difference can be explained by the states’ relatively high electricity prices and relatively low gas prices, which limit how much money drivers save on fuel by switching to an electric vehicle.
In Hawaii, for example, it’s only 35% cheaper to charge an electric Ford F-150 than to fill up a gas-powered Ford F-150. Those are serious fuel savings, but they’re much less than the 78% fuel cost savings that an F-150 owner would achieve by going electric in Washington state.