1. Home
  2. Car insurance
  3. Car insurance guides

The real cost of running an electric car

Sales of totally electric cars took off last year, with more registered in 2020 than in all the previous years combined.

Woman charging her electric car

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 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 electric vehicles (EVs) or 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.


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 ultra-low emission 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

At the end of 2020, there were 432,000 ultra-low emission cars in the UK, up from 269,000 the year before.


Are there incentives to buy an electric car?

Although the government isn’t as generous as it used to be, you might still get a discount on new low-emission vehicles.

Vehicle dealerships and manufacturers get a grant from the government so the discount should be reflected in the list price. The maximum grant available for cars is £2,500.

To qualify, vehicles have to have CO2 emissions of less than 50g/km and be able to travel at least 70 miles without any emissions at all:

To be eligible for the grant, cars must cost less than £35,000, including VAT and delivery charges.


What vehicles are eligible for a grant?

As well as cars, other electric vehicles such as electric motorcycles and electric vans can qualify for what is known as 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:

  • cars
  • motorcycles
  • mopeds
  • small vans
  • large vans
  • taxis
  • trucks

Not all low-emission vehicles get a grant. For the full list, check out GOV.UK.


How can I make getting a charge point more affordable?

If you want to install an electric vehicle charging point at your home the government could help pay for this as well.

The Electric Vehicle Homecharge Scheme pays up to 75% of the cost of putting a charging point in your home. The maximum grant is £350.

Government assistance is available to help with installing workplace electric vehicle charging points as well.


Is it easy to find a charging point for an electric car?

As of 1 July 2021 there were 24,374 public electric vehicle charging devices available in the UK. Of these, 4,551 were rapid chargers that can fully charge a car in a little as an hour.

Since 2015, the number of public devices has grown by 44% per year, on average. Rapid devices have increased at a much higher rate, with an average annual increase of 62%.

Zap-Map is a UK-wide map of charging points where you can filter for charging points near you.


How much does it cost to charge an electric car?

Taking the average domestic electricity price as being 17p per KWh it would cost about £9.00 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 charging, with Tesco recently announcing plans for 600 of its stores to offer free charging.

And if you’re on a longer trip, motorway service stations offer charging points. But like motorway fuel, this could be a more expensive option.


How long does it take to charge an electric car?

The time it takes to fully charge an electric car from empty will depend 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 three speed categories:


Slow charging

Often used to charge an electric car overnight, these will take around eight 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 three or four hours.


Rapid charing

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, which is just for Teslas.


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


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 three-year period. While some of the higher-end models like Tesla tend to stay pricey, EVs seem to follow a similar trend.


Are electric cars expensive to service and repair?

This depends. Electric cars have fewer bits to go wrong than internal combustion engine (ICE) cars but the bits 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 obviously a concern and manufacturers recognise this and might offer warranties. These cover the battery for a set number of years or miles.


Is it more expensive to insure an electric car?

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 traditional car insurance.

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


Are electric cars exempt from the London congestion charge?

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

The discount is currently much wider. It applies to vehicles that meet Euro 6 standards and emit no more than 75g/km of CO2 and have a minimum range of 20 miles of zero emissions.


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.

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


Can you have electric cars as company cars?

Electric cars can 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 will rise to 2% for the following three tax years.