15 years from the ban on fossil-fuel vehicles, and electric alternatives have finally become cheaper to own and drive than petrol cars, new research from insurer Direct Line has revealed.
In 2020, the average lifetime running costs of an electric vehicle, including its purchase price, stands at £52,133, while the equivalent petrol model costs £53,625 over its lifespan. That’s nearly £1,500 in savings from choosing an EV, even though EVs are more expensive upfront.
Those lifetime costs include an average upfront purchase price of £27.921 for an electric vehicle, 22% more expensive than a petrol car, at an average price of £22,976.
EVs are also 25% more expensive to insure, with average annual premiums of £1,172, compared to £938 for a petrol car. Direct Line attributes the steeper premiums to the higher production costs of EVs and their intricate onboard computers.
Thatcham Research also gave reason for the higher insurance costs. “The general construction of EVs differs from traditional cars and typically materials, parts and repairs are, more complex and costly. This makes the overall insurable risk less competitive than many traditional, internal combustion engine options,” insight and intelligence manager Anca Young said.
However, she suggested insurance costs would fall as the development and production costs of EV continue to decline.
The fuel and maintenance costs and tax are where EVs make up the difference. Compare your electricity bills for charging your EV to receipts from a petrol station and you’ll find EVs are 58% cheaper to “refuel.” Annual tax and maintenance costs, including MOTs and servicing, are also 49% lower than for petrol models.
In total, an EV’s annual running cost is just £1,742, while a petrol vehicle costs £2,205 a year.
All added up that means, on average, an electric vehicle costs the owner £3,752 a year throughout its life, compared to £3,858 for a petrol vehicle—an average annual savings of £107.
And of course, that’s not counting the carbon savings. Electric vehicles produce annual emissions of 0 kg CO2 (provided they’re charged with renewable power), while petrol vehicles pump 1,867 kg of carbon into the atmosphere each year they’re on the road.
Direct Line crunched the numbers using the average annual lifespan of a car, pegged at 13.9 years by the Society of Motor Manufacturers & Traders (SMMT). That means a car purchased today would be due to be replaced in 2034, just before the UK bans the sale of petrol, diesel and hybrid vehicles in 2035.
But Britons shouldn’t wait until next decade to switch to an electric vehicle, Direct Line said.
Neil Ingram, head of motor product at the insurer, said Britons could “already be saving money by switching from a traditional petrol or diesel car to an equivalent electric model.”
He also said consumers can expect the ticket price of electric vehicles to fall in the near future.
“We expect prices to come down in future, thanks partly to the Government's commitment to making greener vehicles more accessible but also to advances in technology ensuring that purchasing, refuelling, maintaining and insuring an electric car becomes easier, cheaper and better for the environment.”
Uptake of pure electric vehicles has been slow in recent years but appears to finally be accelerating. Figures from SMMT reveal that 30,957 battery electric vehicles had been registered by the end of June, a 160% increase from the same period last year, despite an overall downturn in the car market due to the coronavirus lockdown. In June, a full 6% of vehicles registered were EVs.
Direct Line also found in a survey that three in five (61%) motorists would make the leap to an electric vehicle—if the market and technology for green cars continues to improve.
However, 35% of respondents said they’re still put off by patchy EV charging networks, while 34% worried about the high upfront cost and 16% about the limited battery range of EVs.
Recently network company Scottish & Southern Electricity Networks (SSEN) calculated that electric vehicle ownership must increase by 11,000% for the UK to meet its target of net-zero emissions by 2050.
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