Q: When evangelical Christians say that they are saved by grace, not by works, are they saying that God does not expect them to do good works?
Not at all. The Bible is clear that salvation is the result of God's grace, effected by his power, given to us as a free gift (John 1:16-17; Acts 18:27; 20:24; Rom. 3:24; 5:15-21; Eph. 1:19; 2:5-10; Phil. 1:6; Tit. 3:7; Heb. 4:16; 1 Pet. 1:5). God accepts us as we are; however, he does not leave us the way we are. When the Bible says that we are saved by grace rather than by works, it does not mean that God does not expect Christians to do good works. It means that we do not depend on our performance of those good works to make us acceptable to God.
True faith results in obedience, produces good works, and exhibits love (Rom. 1:5; 16:26; Gal. 5:6; James 2:14-26). Those whose lives are characterized by flagrant disobedience to God's commandments are giving evidence that they do not truly believe and will not be saved (1 Cor. 6:9-11; Gal. 5:19-21; Eph. 5:5-6; 1 John 1:6; 2:3-6, 9-11; 3:6-15; Rev. 21:8).
A classic illustration is that good works are the fruit, not the root, of salvation. The source of the life in the tree is not the fruit; rather, the life in the tree is the source of the fruit. But a good tree will, of course, be expected to bear good fruit. So, someone who has repented (acknowledged their sin and therefore their need of salvation) and put their faith in Jesus Christ (accepting the gift of salvation that God offers through his death and resurrection) will want to live differently because of the grace of God in their lives.