FOR IMMEDIATE RELEASE
May 21, 2025

Contact:
Josh Valentine, jvalentine@swenergy.org

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[PHOENIX, AZ] – Arizona offers excellent savings potential for drivers who switch to electric fuel, better than most other states in the U.S. Southwest, according to new research by the Southwest Energy Efficiency Project (SWEEP), a non-profit organization working to save people money and promote clean transportation. 

“Transportation is the second-largest cost in a typical Arizona family budget — reaching almost $16,500 a year for families in Phoenix,” said Laura Wickham, Senior Arizona Associate for SWEEP. “Electric transportation is a huge opportunity to save money on getting around, and the opportunity is better in Arizona than in many other places.”

SWEEP found that over a 200,000 mile vehicle lifetime, an Arizona driver could save as much as $10,000 on the total cost of owning and operating a sedan by choosing an electric model. An Arizona pickup driver could save as much as $30,000 on the total cost of a vehicle ownership by going electric. That is comparable to a 13-27% discount versus similar models of combustion vehicles. This figure includes the $7,500 federal electric vehicle (EV) tax credit, which the U.S. House of Representatives is currently proposing to repeal. For comparison purposes, SWEEP calculated savings in terms of net-present value (in other words, how much would it cost to pay for 200,000 miles of vehicle ownership today). 

The savings potential depends on the type of vehicle. Electric pickups tend to offer the greatest overall savings, because they are much more fuel-efficient than gasoline pickups. The difference in fuel efficiency between an electric and a gasoline sedan is smaller, making the overall savings potential smaller. However, sedans also tend to cost less both up-front and overall than larger cars or trucks. (To explore the full results of SWEEP’s analysis, see this spreadsheet.)

This finding is counterintuitive, since Arizona does not have any state-level tax credits or up-front incentives for EV purchases or leases to draw consumers’ attention to the potential for cost savings. In comparison, Colorado offers a state tax credit of $3,500 and an additional $2,500 for EVs with a manufacturers’ suggested retail price of less than $35,000. In 2024, more than one in five new light-duty vehicles in Colorado were electric, compared to about 9% in Arizona. 

However, the overall savings potential of EVs in Arizona is higher than in Colorado. That’s because gasoline prices in Arizona tend to be the most expensive in the Southwest. Additionally, Arizona Public Service and other utilities offer relatively inexpensive electricity rates for residential and business customers during off-peak hours (overnight and early morning). As a result, EV drivers can save more on fueling up in Arizona than in Colorado — as long as they have access to a power outlet at home or at work. For example, a driver in Maricopa County can fuel an electric sedan at home for the equivalent of $0.66 per gallon, compared to $0.96 per gallon in Denver. (SWEEP offers a fuel savings calculator, linked here, to explore these factors in more geographic detail.)

“Electric vehicle incentives point people towards an opportunity to save money,” said Wickham. “The opportunity to save is much bigger than the incentive. The more people that are aware of that, the bigger the benefits will be.”

If Congress were to repeal federal EV tax incentives, more vehicle buyers would likely end up choosing to stick with combustion technology, because people tend to prioritize sticker prices over the total cost of vehicle ownership over time. For example, researchers at the Princeton REPEAT project estimate that nationally, EV sales would drop by 40% in 2030 without federal incentives. If that happened in Arizona, SWEEP estimates that drivers would lose out on about $3.5 billion in consumer savings (net present value). (See this blog post for the methodological details behind SWEEP’s calculation.)

Additionally, if demand for EVs fell by that amount as a result of repeal of federal EV incentives, it would pull the rug out from billions of dollars of investments and thousands of jobs in the state — particularly in South Central Arizona, which is emerging as a nationally important center for battery and EV manufacturing. 

Potentially undercutting transportation electrification further, the U.S. Senate is expected to vote on May 21 on whether to strike down states’ ability to enforce the Advanced Clean Cars and Clean Trucks programs. These policies require manufacturers to deliver more electric and plug-in hybrid vehicles for sale to participating states, which has helped drive demand for batteries and vehicles made in Arizona. (Arizona is not currently participating in the programs, but it has participated in the Clean Cars program in the past.)

“If Congress rolls back EV incentives or strikes down the Clean Cars and Trucks programs, we’ll waste more money on gas,” said Wickham. “States that opt-in are helping to make cost-saving electric vehicles more readily available. Without these tools, we’ll end up with more pollution and less savings.”

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The Southwest Energy Efficiency Project (SWEEP) is a public interest organization promoting greater energy efficiency, clean transportation, and beneficial electrification in Arizona, Colorado, Nevada, New Mexico, Utah, and Wyoming. swenergy.org