How much does it cost to run an electric car?
The surge in demand for electric vehicles (EVs) has been remarkable, registering a substantial 78.4% increase in October 2023, outpacing both petrol (up 2%) and diesel (down by 1.1%). While demand continues to rise, the overall supply growth rate for EVs has shown signs of softening, experiencing a year-on-year decrease of 11% in August 2023. This shift indicates a stabilisation in used EV prices, marking a positive trend for potential profitability. This development is particularly noteworthy considering the sharp decline in used EV prices earlier in the year, plummeting by 33.6% from December 2022 to June 2023.
Understanding the true cost of owning an electric car is crucial before making a purchase, enabling consumers to make informed decisions. Despite the higher upfront costs of EVs, the overall ownership expenses are significantly lower than those of petrol or diesel cars. Notably, petrol and diesel prices have been on an upward trajectory over the past three years, exacerbated recently by global oil production cuts extended by Russia and Saudi Arabia.
This image is sourced from The Irish Times
As you consider transitioning to an electric vehicle, it's essential to assess key cost factors. These include the cost to charge an EV, expenses associated with installing an electric car charger at home (if desired), ongoing maintenance costs, and the initial purchase cost of the EV. Evaluating these factors comprehensively will empower you to make a well-informed decision and embrace the economic and environmental advantages of electric vehicle ownership.
The initial cost of owning an electric car
The initial cost of purchasing a vehicle is a crucial consideration for any prospective buyer. Historically, electric cars were perceived as premium options with higher price tags compared to their petrol counterparts. However, as technology advances, the purchase price gap has been narrowing. Today, many EV models are competitively priced and the overall cost of ownership is lower than petrol cars, especially if you consider the operational expenses.
How much does it cost to run an EV compared to petrol or diesel alternatives?
Over the last couple of years, the prices of petrol and diesel have experienced fluctuations in the UK. At the end of March 2022, the rates of duty on petrol and diesel were reduced by 5p per litre, resulting in a decline in prices. However, this decrease was short-lived as there were significant price increases, especially in May and June 2023. By October, Simon Williams, the RAC fuel spokesperson, expressed that "if retailers were treating drivers fairly, petrol would be at least 7p cheaper" than its current price.
The approximate annual fuel cost for a Ford Focus is £1,230 whereas, the approximate cost to charge an EV is Volkswagen ID.3 is £630. Meaning in total you would save £600 every year!
| Make & Model | Powertrain | Approximate cost per mile | Approximate annual fuel cost |
|---|---|---|---|
| Volkswagen ID.3 | Electric | 6.2p | £630 |
| Ford Focus | Diesel | 12.1p | £1,230 |
Tax incentives and government grants
One of the driving forces behind the growing popularity of electric cars is the support provided by governments worldwide. Numerous countries offer financial incentives and tax breaks to encourage the adoption of EVs - you can read more about it here. These incentives can significantly offset the initial purchase price, making electric cars more financially attractive.
In the UK we have pledged to stop selling diesel cars by 2035. Second-hand cars will not be affected by this ban and may be bought and sold freely, as they are now. This ban is part of a £12 billion Green Industrial Revolution that the Government hopes will create 250,000 jobs as the country invests more in battery technology, carbon capture and green energy.
However, there is still more to do. There are now one million EVs in the UK, which is a huge milestone for the country but people are still limited by the price of getting into an electric car.
“Affordability is still a real issue. Our recent research reveals that cost is the biggest barrier to getting an EV for 68% of people. This has kept far too many drivers out of the electric car market, and the government needs to be putting more policies in place to support consumers. ”
There have been several different government grants implemented over the past couple of years; examples of government grants include the plug-in car grant (which ended in 2022), the electric vehicle charge point grant and the on-street residential charge point scheme. These initiatives specifically target EV charging because it is a significant blocker to widespread EV adoption. In our blog, ‘Going green with grants: your guide to electric car government grants’, you can read more about the specific incentives offered by the UK government.
This image is sourced from AutoCar
Industry leaders are calling for the government to do more to support people switching to EVs. The Environment and Climate Change Committee has published its report ‘EV Strategy: Rapid Recharge Needed.’ In the report, the committee is calling on the government to:
Tackle the disparity in upfront costs between electric and petrol/diesel cars,
Turbocharge the charging infrastructure by reviewing outdated and disproportionate planning regulations and tackling delays in the rollout of key public funding programmes,
Ensure charging is reasonably priced,
Invest in UK recycling to ensure this is undertaken by responsible operators.
You can read more about the recommendations and comments on the Parliament website.
Charging your EV
While the purchase price is crucial, it's equally important to consider additional costs associated with electric vehicles. Home charging stations play a pivotal role in the convenience of owning an EV. The cost of purchasing and installing a home charging station varies, depending on factors such as charging speed, brand, and installation requirements. Despite this initial investment, home charging stations can be cost-effective in the long run, offering savings compared to fueling up at traditional gas stations. Visit our guide to home charging here.
How much does it cost to charge an electric car at home?
| Make & Model | Battery Size (kWh) | Range (miles) | Fully charge cost |
|---|---|---|---|
| Mini Cooper Electric | 33 | 143 | £8.91 |
| BYD Dolphin Hatchback | 60 | 265 | £16.51 |
| Hyundai Ioniq 6 | 77 | 323 | £20.79 |
The average cost for refuelling a petrol or diesel car falls within the range of 19 to 21 pence per mile. In contrast, charging an electric car at home can be as economical as 3p per mile. Lamppost chargers typically incur a cost of around 14 pence per mile, while rapid public charging may amount to approximately 18 pence per mile. According to Nimble Fins, a typical driver could save up to £750 in 2023 by swapping to an electric car.
How much does it cost to charge an electric car in public?
Rapid chargers are typically located in motorway service stations and are generally one of the most expensive methods to charge your electric vehicle (EV). DC rapid chargers are typically rated at 50kW and can charge an EV from empty to 80% in less than an hour. As of May 2023, most network rapid chargers cost 74p/kWh, which equates to £19 for 30 minutes of charging.
Ultra-rapid chargers, with a rating of 100kW and above, can charge an EV to 80% in approximately 20 minutes. Despite being the most expensive way to charge your EV, they are perfect for those in a hurry. If you wish to delve into more information about the various types of chargers and the current state of public chargers in the UK, visit our blog post titled "Celebrating 50,000 Electric Car Charge Points in the UK."
Interestingly, Tesla used to provide an incentive for the Model S and X, offering free charging on Tesla Smart chargers for the first few years after selling these models. This was an enticing offer due to the potential savings available.
The table below shows the price difference between a home charger (7kWh) and a public rapid charger (22-100kWh) when charging a BMW iX3-e Estate (80kWh battery). Home charging proves £4.86 cheaper, emphasizing the convenience of home charging. To understand the cost per kWh, we used the AA recharge flat rate report for July.
| Home Charger (7kWh) | Public Rapid Charger (22-100kWh) |
|---|---|
| £10.97 | £15.83 |
Public charging prices rose in 2023: what you need to know
Zapmap published figures earlier this month to show how electric charging prices changed on the UK’s public charging network. This showed that the premium to charge on the high-powered rapid and ultra-rapid network remains at 47%. Even with the price increases across 2023, the figures from the Zapmap Price Index showed that as of January 2024, electric car drivers are still in a better position in the majority of cases compared to those driving petrol or diesel cars.
This is calculated by taking more than a million recorded charging sessions per month and calculating the weighted average cost that an EV driver pays to charge on a public charging network. The index takes into consideration the increases in price by individual charge point operators, as well as where the largest volume of energy consumption occurs.
| Month/Year | Rapid/Ultra-Rapid | Slow/Fast |
|---|---|---|
| December 2022 | 73p | 40p |
| December 2023 | 81p | 55p |
| Increase (%) | 11% | 12% |
The increase in costs on the rapid/ultra-rapid network, where the majority of charging takes place, is driven by two key factors. The first is consolidation - despite many EV charging networks holding their prices last year, some significantly increased theirs to bring them in line with the rest of the market. The second factor is changing the charging mix - more drivers opted for the faster and more expensive ultra-rapid charge points. Proof of this is from December 2022, where rapid chargers delivered 49% of all kWh in the month and ultra-rapid charge points delivered 29% of the total. Whereas, December 2023 saw rapid chargers delivering 32% of all kWh in the month, with ultra-rapid chargers delivering 45% of the total.
Despite the higher cost of rapid chargers, electric car drivers opted for high-powered devices more frequently in 2023. This shift was facilitated by the increased availability of these chargers, making them more accessible and contributing to their growing usage.
There are reasons to be positive, however:
“There is continued pressure on the government to equalise the VAT levels between domestic and public charging at 5%”
In this context, Melanie is highlighting the contrast between the VAT rates for domestic and public charging. While domestic charging incurs a 5% VAT, public charging is subject to a significantly higher rate of 20%.
How much does maintenance and servicing for an EV cost?
While electric cars are initially more expensive to purchase than their petrol or diesel counterparts, they do require less maintenance and incur lower servicing costs. The electric vehicle drivetrain has fewer moving parts compared to an internal combustion engine, making maintenance more simple and cost-effective. Concerns about battery degradation often deter potential electric car buyers, especially regarding the perceived high cost of battery replacement.
To address these concerns, several manufacturers, including Jaguar, Nissan, Renault, and Tesla, offer eight-year warranties on batteries. Real-world evidence suggests that battery decay rates are generally lower than feared, with some manufacturers expecting their batteries to outlast the entire vehicle, particularly when properly maintained.
In case of battery degradation, replacing specific sub-optimal cells is more likely than replacing the entire battery. As of January 2024, the average cost for an electric car battery is £7,235, according to BookMyGarage, but it's essential to note that such situations are relatively rare.
This image is sourced from Porsche
Moving on to other maintenance aspects, the process for electric cars is akin to that of petrol cars. Regular maintenance, such as maintaining recommended tyre pressure, is crucial. Electric cars, being generally heavier due to the battery's weight, can accelerate tyre wear, a factor worth considering. While electric cars feature conventional disc brakes, they primarily serve as an emergency backup to regenerative braking, which is more frequently used when braking in an EV.
When it comes to servicing, the average cost for an electric car is £143. In comparison, servicing a petrol or diesel car would cost £174. This translates to an 18% higher servicing cost for internal combustion engine (ICE) cars than for electric vehicles, as less testing and time are required for EV servicing.
Environmental benefits
Above, we have listed how much it costs to buy, run and maintain an electric car to give you an idea of how much you would be spending daily and how much you could potentially save in comparison to a petrol or diesel car. If you need more reason to adopt an electric car, then the environmental benefits of what an EV does to the environment compared to ICE vehicles should be the final nail in the coffin to make you switch.
Most electric car batteries are made in China, South Korea and Japan, where the use of carbon in electricity production is very high - this being said, more battery production facilities are being built in Europe and the UK, which is positive. Lithium batteries in EVs are made up of base metals like copper, aluminium and iron which are extracted from the earth.
However, mining these materials poses significant environmental and social concerns. Lithium production, in particular, demands extensive water use and occurs in regions already grappling with water shortages, likely exacerbated by global heating. The extraction process not only leads to land and water pollution but also triggers ecosystem degradation and violates the rights of indigenous and rural communities. New York University and the Geneva Center for Business and Human Rights found that auto, battery and electronic manufacturers were not doing enough to ensure the cobalt they’re using doesn’t involve child labour in Congo’s unsafe “artisanal miles.” We have a dedicated blog that discusses the lifespan of electric cars and goes into detail about lithium batteries, that you can read to learn more.
The benefits of BEVs will increase as the electricity grid becomes greener but according to Euronews.net, a BEV driven in Poland with a battery produced in China, still emits 37% less CO2 than petrol. As The Guardian put it, “the scientific consensus is overwhelming: on any realistic like-for-like comparison a battery car will be cleaner than its petrol or diesel equivalent” and “putting batteries in cars so far appears to be the only practical way to shift the tends of millions of light vehicles sold every year towards net zero emissions.”
What are we doing at The Electric Car Scheme?
Every company in the UK can help their employees on their journey to net zero by offering The Electric Car Scheme as an employee benefit. Salary sacrifice allows employees to save up to 60% when leasing any electric car of their choice; they simply agree to have a portion of their pre-tax salary deducted each month to cover the cost. As an employee you choose the car you want, add on any extras and drive away saving thousands! This enables employees to save on the upfront cost of electric cars since leasing involves no initial expenses. Consequently, more individuals can afford to drive electric vehicles, as the price is no longer a barrier impeding accessibility.
Save up to 60% on any electric car with salary sacrifice - because you pay before tax! The Electric Car Scheme will help you make the most of government incentives.
We have hundreds of cars to choose from, all you have to do is visit our quote tool and have a browse! The quote tool shows the breakdown of your savings and how much the car will cost every month. You can also add different specifications and customise your model to make it yours. We have included examples of three very different cars, all available at The Electric Car Scheme right now!
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Last updated: 28/02/24
Next update: 28/08/24
