Rising fuel prices: Driving the shift to electric cars
Rising fuel prices have been a concern for drivers in the UK since the initial rise at the end of 2021. Russia's invasion on Ukraine drove oil prices to rise; as a result, fuel prices are becoming unsustainable for the average driver. This is causing consumers to find more affordable modes of transport, like electric cars.
A survey by Carwow found that 44% of drivers have changed their driving habits because of an increase in prices. It also found 69% of drivers are likely to shop around for the cheapest per/litre cost. Unleaded prices have increased by 6p in just one month, reaching 154p per litre and diesel now costs 158p per litre.
One misconception about electric cars is that they're expensive to purchase, but in reality, petrol cars are expensive to operate. However, there are ways of optimising the government’s tax incentives to help more people get into electric cars. Information, access, price, and complexity limit many people, slowing global progress. At The Electric Car Scheme, we want to change this.
Switching from petrol to electric not only reduces long-term expenses but also contributes to daily carbon emissions reduction. This post examines rising fuel prices and assesses the cost and environmental advantages of going electric.
This image is sourced from The Guardian
The fuel price challenge: why change is necessary
As mentioned previously, fuel prices have increased significantly in the last couple of years and this rise continues. In the early months of 2022, companies involved in refining oil into products like diesel and petrol experienced high-profit margins. Refineries produced less oil because of production limitations related to the Ukraine conflict. This ultimately meant fuel prices increased significantly.
The Competition and Markets Authority found that weak competition meant supermarket margins on fuel had increased, resulting in drivers paying more. Williams continues, “if retailers were playing fair with drivers petrol would be at least 7p cheaper than it is now. Some stores now show current fuel prices on the internet, so drivers can easily compare and find the cheapest option. The AA has been calling for this type of price tracking since 2012.
However, prices may not improve in the near future. Williams states that while we’re not in the upward spiral we were in last year (2022), “if oil producers continue to curb production then bigger forecourt price rises could be on the cards.” This means it may become increasingly difficult for consumers to afford fuel.
Changing driving habits
The price increase has caused petrol and diesel drivers to change their behaviours as budgeting has become increasingly difficult. 68% of people actively look for cheaper fuel stations instead of going to the most convenient.
However it is not only fuel prices that make it more expensive to own a petrol or diesel car. Sally Foote, UK Managing Director at Carwow, mentions “new charges associated with clean air zones like the expanded ULEZ area, as well as increased car tax since April 2023 and car insurance premiums rising.” These additional costs mean it is now more expensive to have a petrol car on the road.
Here’s an example of how this looks in comparison to running an electric car:
The calculations below are for comparison purposes only and your specific circumstances may yield differing results. For example, travelling more than 10,000 miles annually or entering low emissions zones on a regular basis will favour the MG.
In September the UK prime minister, Rishi Sunak, announced the delay on banning the production of petrol and diesel cars. The timeframe moved from 2030 to 2035, in line with European goals. This was to put the choice in the consumers hands as opposed to the government forcing people to make the change. If fuel prices keep going up, more people may switch to eco-friendly and cost-effective transport options.
Fuel vs electric: price comparison
Electric cars may cost more upfront, but you can make the investment back quickly because of the lower running costs. What Car conducted a test to understand whether it is actually cheaper to have an electric car compared to a petrol counterpart.
The first comparison was between a BMW i4 and a BMW MM440i. The former was plugged in and left until the battery reached 100%. When both cars were at capacity, their computers were updated to measure the journey range. The MM40i used 26.19 litres of regular unleaded for a 228-mile journey from Cobham services (Surrey) to Leeds. The total bill for the MM4Oi came to £52.09. The electric BMW worked out to be £5.64 (11%) more expensive than the petrol equivalent.
This doesn’t necessarily mean petrol cars are generally cheaper to run. The experiment focussed on refuelling and re-charging costs at motorway service stations, which is the most expensive way to charge an electric car. It is important to note that anyone who buys an new BMW electric car gets a 12 month subscription to BMW chargers. Also, charging your electric car at home is the cheapest way to do so - an option that is not available to those who drive a petrol car.
In other tests conducted by What Car, electric cars have proved more efficient than petrol and diesel cars in urban environments. This is because they can use the energy lost when slowing down to recharge the battery. The main takeaway from this test is if you are considering an electric car, you should consider how you will charge it. An electric car will cost less to run than petrol cars if you can charge it at home overnight.
A sustainable solution
A common misconception of electric cars is that the upfront cost is extremely high. This doesn’t have to be the case. Once you receive your electric car, the cost to run it is marginal compared with a similar petrol model. INews reports that running an electric car for five years costs around £3,985 on average, while a petrol car costs £6,125.
Charging an electric car is now easier than ever because the charging infrastructure has expanded rapidly in recent years. There are now more charge points than petrol stations in the UK.
Installing a home charger is now easier, more affordable, and more convenient than ever before.When you return from work, plug in your EV. By the next morning, you'll have more than 200 miles of range. Switching to electric cars is now cheaper and easier, thanks to salary sacrifice schemes like The Electric Car Scheme and more charging stations.
Installing a home charger is now easier, more affordable, and more convenient than ever before.When you return from work, plug in your EV. By the next morning, you'll have more than 200 miles of range.
This image is sourced from FleetWorld
Switching to electric cars is now cheaper and easier, thanks to salary sacrifice schemes like The Electric Car Scheme and more charging stations.
Helping the transition: The Electric Car Scheme
There are many salary sacrifice providers, so why choose The Electric Car Scheme? Sustainable choices should be obvious and affordable. When the choice is better for you and the environment - it’s a win-win.
The electric car salary sacrifice scheme is like the cycle-to-work scheme but for electric cars. It lets employees pay for an electric car from their gross salary before tax. This means you can receive the best prices of electric cars available with the opportunity to save 30-60%.
Employers set up the scheme as an employee benefit at no cost to the business. At The Electric Car Scheme, we provide market-leading protection to safeguard from unexpected costs because of unforeseen circumstances.
This is a great employee benefit that can help attract and retain happy employees. Learn more about how it works for employers here.
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