Drivers across the United States are suffering unprecedented pain at the pump, with national average prices spiking above $5 per gallon. Fortunately an inflation-busting option is ready to go – modeling shows electric vehicles save drivers thousands per year compared to internal combustion engines in most states.

But these consumer-protection economics hinge upon the U.S. Senate passing legislation that has languished for months after passing the House of Representatives. The existing $7,500 federal EV tax credit cap of 200,000 vehicles sold has been surpassed by GM and Tesla TSLA while Ford, Nissan, and Toyota will likely exceed it this year. Without those extremely valuable incentives, EVs and billions in annual savings will slip out of reach for many families.

If the Senate passes reconciliation legislation extending the EV tax credit cap for automakers and increases the federal tax credit to $10,000, it will insulate Americans from volatile global oil market price spikes and make EVs cheaper than gas cars in every state.

Forthcoming Energy Innovation modeling finds that extending the tax credit cap and increasing the tax credit would save consumers an average of $15.3 billion per year between 2023 and 2030, and total $122.3 billion over that period.

But if the Senate does not pass reconciliation legislation and fails to provide EV relief, it will handcuff consumers to record gas prices, forcing families to choose between driving or paying their bills.

EVs have long been cheaper to operate over their lifetime because of their high efficiency, lower fuel costs, and roughly half the maintenance needs. More than half of U.S. consumers think they are too expensive to own because of total sticker prices that are often higher than gas-powered vehicles.

Energy Innovation research busts that myth. EVs are cheaper to own than their gas counterparts starting the day they drive off the lot in most states, even when the sticker price is considerably higher, with the existing $7,500 federal tax credit.

National average monthly cost of ownership of electric vehicles and gas-powered counterparts during ... [+] finance term

Because 85% of Americans finance their car purchase with monthly payments, the total cost difference actually spreads out over an average six-year lease term. When fuel costs are combined with financing costs, state taxes and fees, federal and state rebates and tax credits, maintenance costs, and insurance costs, EVs can be hundreds of dollars cheaper per month and save an average of $6,000 over the vehicle’s lifetime.

This research was released in May and fuel prices have spiked since then, meaning EVs are even more economic compared to their gas-powered counterparts.

Energy Innovation compared the financing and operating costs of six different EVs (the Hyundai Kona SEL, Hyundai Kona Limited, Ford F-150, Kia Niro, Volvo XC40 and Nissan LEAF) to their gas equivalents. The Hyundai Kona SEL and Ford F-150 Lightning are cheaper in every single state, with the F-150 Lightning up to $213 cheaper per month and up to $20,000 cheaper to own over the vehicle’s lifetime.

Other models including the Hyundai Kona Limited, Volvo XC 40, and Nissan LEAF are cheaper than their gas equivalents in more than half of states. But even where EVs do cost more, the difference is often less than $15 a month. And again, over the vehicle lifetimes, every evaluated EV saves thousands compared to their gas counterparts.

If the federal tax credit is expanded to $10,000 as currently proposed, an amount lower than the $12,500 credit considered by the Senate in 2021, nearly every EV would be more affordable than its gas counterpart in every state. Consumer savings add up even faster in this scenario on a monthly basis and become even greater over the vehicle’s lifetimes.

Automakers and U.S. manufacturing jobs also win if the Senate passes the proposed tax credits. Extending the tax credit cap for automakers who have exceeded it would prevent sales from falling for some of the most popular American-made models, particularly the ultra-popular F-150 Lightning.

It’s no wonder the CEOs of GM, Ford, Stellantis (Chrysler’s parent company), and Toyota urged Congress to extend the cap in a joint letter issued last week. The CEOs cited more than $170 billion in investments through 2030 to bolster EV production and development, as well as increasing costs that threaten sales. “Recent economic pressures and supply chain constraints are increasing the cost of manufacturing electrified vehicles which, in turns, puts pressure on the price of sales.”

The proposed EV tax credits would also increase U.S. energy security by cutting demand for foreign oil. Previous Energy Innovation modeling showed that passing the EV tax credits would cut U.S. oil demand 180 million barrels per year by 2030 – more than twice the amount of crude oil we imported from Russia in 2021. Cutting foreign demand insulates consumers from global oil market volatility and takes money away from petro-state dictators like Vladimir Putin in a win-win move.

Even though fossil fuel proponents have said increasing domestic oil output by expanding fracking through greater subsidies and fast-tracked permitting, oil companies themselves say they need two to three years to increase U.S. production. That doesn’t help consumers today, and it doesn’t protect our economy over the long term because oil is a global commodity with prices largely determined by OPEC.

Stanton, CA - March 07: High gas prices at stations on the corner of Beach Boulevard and Lampson ... [+] Avenue in Stanton, CA, on Monday, March 7, 2022. (Photo by Jeff Gritchen/MediaNews Group/Orange County Register via Getty Images)

High gas prices “crushing previous records” are due to the war in Ukraine and various national embargoes on Russian oil reducing global supply. Combined with a global decline in refining capacity, they’re not likely to fall anytime soon.

Compare that to EV battery pack prices, which are the largest cost component of EV prices and have fallen 89% over the past decade, leading many analysts to predict EVs will cost less than gas-powered vehicles within five years.

That’s a great destination, but we’re not there yet. Until EVs reach price parity, federal EV tax credits are the way to ensure all Americans – not just wealthier households – are able to plug into cheap electricity instead of unnecessarily spending thousands of dollars on gas.

Record gas prices whenever it’s time to fill up the gas tank are hurting America’s families and economy. Volatile global oil markets and petro-state dictators are here to stay.

Cheap EVs are the solution to these intractable problems, not more domestic oil that will take years to produce and flow beyond our borders.

The Senate has a choice, either pass legislation that will save consumers billions and fight climate change, or chain drivers to record-high gas prices.