The real cost of EV ownership
Fancy switching to an electric car but worried about the cost? This might help you out.
You might be tempted by an electric vehicle (EV) in an effort to live a greener lifestyle, save money on fuel, and zip quickly around town.
You’ll probably already know that electric vehicles can be more expensive to buy than an internal combustion engine (ICE) vehicle.
But what about the other costs associated with buying an EV?
Working out all the relevant costs can be a little confusing, so we've broke it down for you to make things easier.
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Buying a new electric car
The cost of buying a new EV is approximately 18% more than buying an ICE vehicle, according to a study by Vantage Leasing. This is due to the manufacturing costs associated with the batteries and electric motor.
While an electric engine isn’t necessarily more complicated than a petrol or diesel engine, there’s a lot more new technology that goes into each EV.
Already EVs have reduced in price thanks to advancements in this technology and they’re predicted to cost the same as petrol cars by 2024, according to a study by Bloomberg New Energy Finance.
But that’s not a reason to hold off on buying an electric car, as the savings come after you’ve bought one.
READ MORE: Electric cars: A complete guide
The government currently has a grant scheme for electric vehicles in the UK that will give you 20% (up to £3500) towards the cost of a new electric or hybrid vehicle.
This makes electric cars more affordable, but keep an eye on the prices for new vehicles on manufacturer websites. Often the on-the-road prices already include the discount from the grant.
You can also get up to £500 off the cost of installing a home charger through the Electric Vehicle Homecharge Scheme.
Cost of fuel
EV batteries are getting larger and more efficient, leading to increased ranges. Now that you can drive further than ever in an EV, it’s an even more appealing choice. But how do the charging costs compare to refuelling with petrol or diesel?
This all depends on where you charge, your home electricity tariff and the equivilent petrol/diesel cost. But even with the figures against you, it’s likely you’ll still come out on top with an EV.
You can directly compare refuelling costs between EVs and ICE vehicles. For example, assuming you do a daily drive of 20 miles, the cost per mile for an electric Nissan Leaf (40kWh Acenta Auto model) is 2.4p.
For a Ford Fiesta (with the 1.0L Ecoboost petrol engine), the cost per mile is 14.4p. (This is based on electricity costing 8p per kWh, and petrol costing 127.9 per litre).
If you want to compare an electric car with a diesel or petrol one, EDF has a calculator you can use.
Bear in mind that if you charge your EV at home overnight, you’re likely to get an even cheaper rate on your standard electricity.
Cost of insurance
The average cost of insuring an electric car is £1,263 (according to Confused.com data, Aug 2018 – Sep 2019).
The latest Confused.com price index, however, reveals the average price of car insurance in the UK is now £789 - this is across all powertrains and models.
This shows that the average cost of insuring an electric car can be much higher than the national average. This is down to the need for specialist parts and servicing if an insurance claim is made.
As EVs become more mainstream, these costs are likely to decrease.
READ MORE: Car insurance for green drivers
Cost of tax
All electric vehicles made prior to 2017 are exempt from vehicle excise duty (VED, often called road tax). This could save you hundreds over a year compared to the equivilent ICE vehicle.
New tax laws came into force in 2017 and while most EVs are still exempt from VED, those over £40000 when new will have to pay a premium tax. For cars made between 2017 and 2019, this is £310 per year for the first five years.
For cars made after 2019, this rate is £320 per year for the first five years.
This is still cheaper than the equivalent ICE vehicle as you’d have to pay based on emissions, as well as the premium tax of £310/£320 per year.
Cost of maintenance
Because the first-generations of electric vehicles are still on our roads, full maintenance costs are still unclear but several studies of EVs compared with equivalent ICE vehicles have shown maintenance costs to be an estimated 23% lower.
This is because EVs have fewer moving parts than an ICE engine. While a motor and battery might be relatively new technology in a car, it’s actually quite a simple set up.
An ICE vehicle is powered by a lot of moving parts including parts that wear or need replacing on a regular basis such as belts, chains, spark plugs and filters.
An EV doesn’t have this, so services are relatively straight forward for the mechanic carrying out the work.
READ MORE: Why an electric car could be right for you
If you make a lot of long journeys, you’ll probably need to stop more often and for longer than in a diesel car. You may need to take into account the cost of coffees and snacks while you wait around at service stations.
Any new car can be a big step so consider the costs carefully. While the purchase price of an EV might be more expensive than an ICE car, even when taking into account grants, there are cost savings to be had across the board, otherwise.
Consider how many miles you do each year and think about how long you intend to keep this EV. The longer you keep the vehicle, the more you’ll start to feel those cost savings.
It’s also worth looking at how an EV will fit into your lifestyle. The last thing you want is to sell it on after less than a year, or feel you need to hire an ICE vehicle in order to make longer trips. This will dramatically push up your ownership costs.