1. Home
  2. Car insurance
  3. Car insurance guides
  4. Cost of running an electric car

Cost of running an electric car

Sales of totally electric cars have taken off in recent years, with the number of registered electric cars more than doubling between 2020 and 2022.

With manufacturers such as Ford and Jaguar announcing plans to phase out petrol and diesel cars over the next decade, electric looks to be the way forward. 

So what do you need to consider before you join the electric car revolution? What is the cost of running an electric car? And how does car insurance differ for electric cars?

 

How much does it cost to charge an electric car?

Batteries come in different sizes, and the cost of electricity regularly changes, too. So it’s handy to know how to work out the cost of charging your battery.

The good news is that it’s easy to do if you take the size of your car’s battery (in kWh) and multiply it the cost of electricity (in pence per kWh).

So taking the Energy Price Guarantee electricity cap at 34p per KWh (as at November 2022), it would cost about £20.40 to fully charge a typical 60KWh battery at home.

A more cost-effective way of charging your car is to put it on charge when you’re doing a big shop.

Many supermarkets now offer free electric vehicle (EV) charging. Tesco, for example, offers this at hundreds of its stores, though you have to pay if you opt for rapid charging.

Other free charging points across the country can be found in shopping centres and car parks.

Make sure you know if there are any conditions attached for using them, such as needing to make an in-store purchase or having a time limit.

Meanwhile, Tesla has announced that it's going to allow some of its Supercharger points to be used by all electric cars.

If you’re on a longer trip, motorway service stations offer charging points. But like petrol and diesel bought on the motorway, this could be a more expensive option.

 

How long does it take to charge an electric car and does the cost change with charging speeds?

The time it takes to fully charge an electric car from empty depends on the car battery and the type of charger.

Batteries in electric vehicles also prefer warmer weather and so might take longer to charge when it’s cold.

Chargers come in 3 speed categories:

  • Slow charge
  • Fast charge
  • Rapid charge

There’s no one-size-fits-all, but generally speaking it costs more the faster you want to charge.

Slow charging

Often used to charge an electric car overnight, these take around 8 to 10 hours for a full charge.

Fast charging

These tend to be found in places such as supermarket car parks and houses with off-street parking. A full charge can be done in 3 or 4 hours.

Rapid charging

Electric vehicles with rapid charge capacity could be fully charged in as little as an hour.

The fastest charging points are those on Tesla’s Supercharger network.

Generally, it’s a good idea to think of an electric car as being like a mobile phone -  do the main charge overnight and top it up during the day.

 

Is it easy to find somewhere to charge an electric car?

As of November 2022 there are over 32,000 public electric vehicle charging devices available in the UK. spread across 14,000 locations.

The number of electric charging stations has grown significantly over the last few years, and it shows no signs of stopping. Earlier in 2022, the government announced that it planned to create 300,000 electric charge points in the UK by 2030.

 

Does servicing electric cars cost more?

This depends. Electric cars have fewer parts to go wrong than internal combustion engine (ICE) cars but these parts tend to be more expensive. They also might need specialist garages.

Again, as electric cars become more popular, the price of parts for electric cars should fall and more places are likely to be able to maintain and repair them.

The cost of replacement batteries is a main concern and manufacturers recognise this and might offer warranties. These cover the battery for a set number of years or miles.

 

Is electric car insurance more expensive?

Electric versions of some high-end cars could cost a lot more to insure than their petrol or diesel equivalents. 

At the more affordable end of the market, electric car insurance could cost about the same as a standard car insurance policy.

Some specialist insurance policies already exist for electric cars, offering things such as recovery to the nearest charging point.

The choice of these sorts of policies is expected to increase with the rise in popularity of electric cars.

Compare car insurance quotes

 

Do electric cars have to pay car tax?

If you have a zero-emission car you don’t have to pay for vehicle excise duty (VED) but you still need to register for it.

Zero-emission cars are also exempt from the car tax surcharge on cars costing more than £40,000.

But electric cars will no longer be exempt from tax after 2025. This comes after the 2022 autumn statement from chancellor of the exchequer Jeremy Hunt.

Car tax bands for hybrid electric cars depend on when the car was registered, their cost and their emission levels.

 

Are electric cars exempt from the London congestion charge?

Since October 2021, only EVs qualify for the 100% discount on the congestion charge in London.

 

Do electric cars keep their value?

As electric cars have become more popular their resale values have become more aligned with those of similar conventional vehicles.

In general, cars lose about 60% of their value over a 3-year period. Electric models on the other hand, lose around 52% of their value. This figure might improve even further as we move towards the 2030 deadline where all new cars must be electric.

As you might expect, some of the higher-end models such as Tesla tend to stay pricey, but EVs in general seem to follow a similar trend to other cars.

According to Motorway, these are the electric cars that retain their value the best:

  • Smart EQ ForFour
  • Tesla Model X
  • Hyundai Ioniq
  • Porsche Taycan
  • BMW i3
  • Tesla Model 3
  • Polestar 2
  • Volkswagen e-Golf
 

Is it cheaper to run an electric car?

Overall, yes – electric vehicles are cheaper to run in the long run, but you might have to pay more at the beginning to get the car.

If you’re buying a new car, they’re generally more expensive to buy than vehicles that run on petrol or diesel. You might also have to pay for a charging point to be installed in your home.

But once you’ve got over the initial expense, the cost of fuel is cheaper, and there are also the tax benefits.

And servicing is more of a mixed bag. There are fewer things to go wrong but parts can be more expensive. But these costs are also likely to fall as electric cars become more prevalent.

 

What are the models with the cheapest electric car running costs?

According to ChooseMyCar.com, the 10 cheapest electric vehicles to charge and drive (as of November 2022) are:

  • Hyundai IONIQ Electric
  • Tesla Model 3 Standard Range Plus
  • Tesla Model 3 Long Range Dual Motor
  • Fiat 500e
  • Hyundai Kona Electric
  • Tesla Model 3 Long Range Performance
  • Mercedes-Benz EQA
  • Renault Zoe ZE50 R110
  • Volkswagen ID.3 Pure
  • Honda e
 

How can I reduce the cost of running an electric car?

The government scrapped the Plug-in Car Grant for electric cars in June 2022. The scheme allowed a discount of up to £1,500 off the price of a new electric car.

Other electric vehicles such as electric motorbikes and electric vans can still qualify for the plug-in vehicle grant.

The amount of the grant depends on what category the vehicle is in. There are also different criteria for different categories.

The categories are:

  • Wheelchair-accessible vehicles
  • Motorcycles
  • Mopeds
  • Small vans
  • Large vans
  • Taxis
  • Trucks

Not all low-emission vehicles get a grant. For the full list, check out the government’s website.

The government also stopped the Electric Vehicle Homecharge Scheme, which previously paid up to 75% of the cost of putting a charging point in your home, with grants of up to £350.

When you charge your car, planning ahead could save you money. For starters, know where your nearest free charging points are. 

But you’re also likely to want to charge your car at home. So consider going for an electricity tariff that costs less to use overnight, and then use that time to charge your car. You can also get specialist energy tariffs that offer discounted rates for charging EVs at night - though with the current energy market, many of these tariffs might not be available.

 

What types of electric car are there?

If you want to go all electric, there are cars that just rely on battery power and need to be plugged in to recharge. These are known as battery electric vehicles (BEVs). 

As these cars run only on electricity they produce zero emissions, so they’re also known as zero-emission vehicles (ZEVs). 

Well-known examples are the Tesla and the Nissan Leaf.

Then there are hybrid cars that combine a petrol or diesel engine with an electric motor and batteries.

The first type is a parallel or self-charging hybrid, also known as a hybrid electric vehicle (HEV).

Here, the engine is the main power source but the car can also run on just the battery or on engine and battery together. The battery gets recharged in the course of normal driving. The original Prius is probably the most famous of this type of car.

Finally, there are the hybrids that can also be plugged in to recharge their batteries and so are known as plug-in hybrid electric vehicles (PHEVs). 

These have bigger batteries than HEVs so can travel further on just battery power. The Mitsubishi Outlander PHEV is a popular example of this.

With the 2030 ban on the sale of new internal combustion vehicles also including hybrid cars by 2035, you can expect to see hybrids declining in popularity.

 

What is a ULEV?

There are a lot of acronyms in the electric car world. 

Another useful one to know is ULEV, which stands for ultra-low emission vehicle.

While EVs have zero emissions, the emissions from hybrid electric cars vary.

To be counted as an ULEV, vehicles must emit under a certain level of carbon dioxide from their exhausts. The limit is currently 75g/km of CO2 but this is likely to be lowered soon to 50g/km.

 

What ULEV vehicles are available?

Some 8.4% of all cars first registered in 2020 fell into the ULEV category. Some of them have zero emissions, some have low emissions. The most popular were:

  • Tesla Model 3
  • BMW 3 series
  • Kia Niro
  • Jaguar I-PACE
  • Nissan Leaf 

According to Department for Transport statistics, in June 2022, there were 910,000 ultra-low emission cars in the UK. this is up from 563,000 the year before.

 

Can you have electric cars as company cars?

Electric cars could be worth considering as company cars as they attract the lowest tax bands for benefits in kind.

For the tax year 2021/22 this is just 1% for cars that are 100% electric. It then rises to 2% for the following 3 tax years.

Some employees might also have the option of joining an EV salary sacrifice scheme, such as the one offered by Octopus Energy. These schemes allow employees to get a new EV for a few years with benefits such as:

  • Free maintenance
  • Free home charger installation
  • Free servicing and MOT