FOR IMMEDIATE RELEASE
May 21, 2025
Contacts:
Travis Madsen, tmadsen@swenergy.org
Josh Valentine, jvalentine@swenergy.org
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[DENVER, CO] – Colorado drivers could lose as much as $5.5 billion in consumer savings over the next five years if Congress repeals the federal electric vehicle (EV) tax credits, 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 already the second-largest cost in a typical Colorado family budget, exceeding $15,000 per year for a typical Denver household,” said Travis Madsen, Transportation Program Director for SWEEP. “Electric transportation is a huge opportunity for families and businesses to save money on getting around.”
SWEEP found that over a 200,000 mile vehicle lifetime, a Colorado driver could save as much as $10,500 on the total cost of owning and operating a sedan by choosing an electric model. A Colorado pickup driver could save as much as $27,500 on the total cost of a vehicle ownership by going electric. That is comparable to a 13-26% discount versus similar models of combustion vehicles. These figures include the $7,500 federal 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 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.)
The main driver of savings potential is the fact that electricity is cheaper than gasoline. Colorado average gas prices in mid May 2025 are about $3.20 per gallon. In comparison, an electric sedan driver charging at home on Xcel Energy’s residential time-of-use rate (which offers a discount for using electricity during periods of lower demand, such as overnight or early morning hours) pays the equivalent of about $0.96 per gallon. And an electric pickup driver in Grand Junction charging at home on the best available Grand Valley Power residential rate pays the equivalent of $0.44 per gallon. (SWEEP offers a fuel savings calculator, linked here, to explore these factors in more geographic detail.)
Federal and state EV tax credits have been effective at spurring EV adoption, with one in five new light-duty vehicles in Colorado being electric in 2024. The nearly 45,000 new EVs that Coloradans deployed last year are expected to save drivers over $820 million over the vehicles’ lifetimes, freeing up significant space in household and business budgets.
“The main value of federal EV tax credits is to point people towards an opportunity to save money,” said Madsen. “The opportunity to save is much bigger than the incentive. The benefits for Coloradans will be larger if Congress preserves federal EV incentives, but even if the incentives do get repealed, the fundamental ability of electric vehicle technology to save people money will remain.”
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 Colorado, SWEEP estimates that drivers would lose out on $5.48 billion in consumer savings (net present value). (See this blog post for the methodological details behind SWEEP’s calculation.)
The U.S. House of Representatives is now considering a budget bill that would largely repeal federal EV credits after this year — and dramatically scale back a wide range of other clean energy incentives. Colorado freshman Representatives Jeff Hurd (CO-03) and Gabe Evans (CO-08) signed a letter in March asking party leaders to protect federal clean energy tax credits, noting their importance for energy affordability and independence. Their votes will be an important factor in the final shape of the bill, given the narrow margin of Republican control in the House.
Potentially making matters worse, the U.S. Senate is expected to vote today (May 21, 2025) on whether to strike down Colorado’s ability to enforce our Advanced Clean Cars and Clean Trucks policies. These policies require manufacturers to deliver more electric and plug-in hybrid vehicles for sale to participating states. (Colorado adopted the standards in 2023 (separately for cars and trucks), leading the mountain west region in its commitment to more efficient, cleaner vehicles.) The U.S. House of Representatives voted to disable the programs earlier in May after an extensive campaign by petroleum interests.
“If Congress rolls back EV incentives or strikes down the Clean Cars and Trucks programs, we’ll waste more money on gas,” said Madsen. “States that opt-in, like Colorado, are helping to make cost-saving electric vehicles more readily available. Without these tools, we’ll end up with less savings and more pollution.”
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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
