If you’re planning to keep your next car for a few years, you should be considering an electric vehicle to save money, that’s according to a new study.
Analysis of purchase prices and running costs found that family-size electric vehicles are now more cost competitive with petrol and diesel cars – and the longer you keep a battery-powered model the better it will be for your finances.
When taking into account the total cost of ownership, the research claimed the difference between a petrol and electric mid-size car is £132 a month in favour of plug-in models.
Electric family cars are cheaper to own, according to an annual report comparing the running costs of EVs and models with petrol and diesel engines
The claim that electric cars are now cheaper to own over an extended period has been made by LeasePlan in its latest annual Car Cost Index.
The report looks at the true cost of owning a car – including fuel, depreciation, taxes, insurance and maintenance – in 18 European countries.
It found that the common mid-size electric vehicle in the UK costs €918 (£837) a month to own, while an equivalent petrol model would be €1,063 (£969) – a cost difference of €145 (£132).
Mid-sized models included in the review include the Tesla Model 3, which has become Britain’s best-selling electric car this year, compared against the likes of the BMW 3 Series and Audi A4 with internal combustion engines.
The report claimed that smaller battery-powered cars – like the Nissan Leaf – remained more expensive than their fossil fuel counterparts due to their much higher purchase price.
However, the gap in ownership costs for this category of car diminishes after four years of ownership, with EVs becoming more affordable than petrol and diesel the longer you keep a car.
This is because owners of battery-powered cars have the financial benefit of far lower charging costs than refuelling a motor with an internal combustion engine, cheaper maintenance and tax bills and other subsidies linked to zero-emission vehicles.
Electric cars currently hold their value much better than models with internal combustion engines, which also has an impact on the long-term ownership costs.
The table shows that the cost of running an electric vehicle in the UK (far right chart) is much cheaper than an equivalent family model with a petrol engine – and also less expensive than a diesel car
For the study, LeasePlan used a Tesla Model 3 as an example of a mid-size family EV
The equivalent for cars with internal combustion engines were the BMW 3 Series (pictured) and Audi A4
Tex Gunning, chief executive of LeasePlan, said the cost of driving electric cars is now coming down, and motorists are seeing the ‘development of a strong second-hand market for quality used EVs’.
This includes the introduction of the new Volkswagen ID.3 family hatchback with a 260-mile range, which first arrived in the UK a month ago and cheapest versions will cost from under £30,000.
A larger ID.4 SUV will also be sold from 2021 along with a plethora of new plug-in cars from rival brands.
Yet despite the availability of EVs expanding and prices beginning to fall closer in-line with models with internal combustion engines, Mr Gunning warned that governments are failing to provide the charging infrastructure necessary to satisfy market demand.
‘National and local policymakers need to step up now and invest in a universal, affordable and sustainable charging infrastructure to enable everyone to make the switch to EV,’ he said in the report.
‘Supporting the transition to electric mobility is the best investment governments can make – EVs are good for drivers, good for air quality, and one of the most effective ways to fight climate change.’
Volkswagen’s new ID.3 hatchback has arrived in the UK in recent week. The cheapest versions are due to cost less than £30,000
VW has also announced a larger ID.4 electric SUV, which will hit UK showroom in 2021
In the UK, the number of electric car rapid chargers is set to more than double between now and 2024 as a result of additional funding.
The Government confirmed last year that it will invest a total of £400million to help bolster the public charging network, with £70million used to fund the installation of 3,000 rapid chargers over the next five years.
The government has also this week announced plans to investigate how public chargepoints should be regulated in the UK, particularly regarding pricing and data.
A consultation will be launched later this year by transport secretary, Grant Shapps.
In a statement made during the online Conservative Party Conference, Mr Shapps said: ‘As an EV driver myself, I know that it’s vital that EV drivers can have confidence in the public charging network.
‘That’s why we’re going to consult on regulating to improve the driver experience of use of electric vehicle chargepoints to make it as easy and hassle-free as it can possibly be.’
The government confirmed last year that it will invest a total of £400million to help bolster the public charging network between now and 2024
The government has yet to rubber-stamp plans for an accelerated ban on sale of new petrol, diesel and hybrid cars, which is currently set for 2040.
It had been widely expected that the ban will be fast-tracked to 2035, but that date could be hauled forward to 2030 in order for the UK to achieve a target of being net-zero for carbon emissions by 2050 – a move that would be supported by many Tory MPs and the Labour Party.
Industry figures show that 66,611 battery electric cars – those that run entirely on electricity – have been registered so far in 2020.
These zero-emission cars account for one in 20 new models bought in Britain this year.
More than three times the number of pure electric vehicles have been sold in the first nine months on 2020 compared with the same period in 2019.
More than one in five UK motorists said they were unaware of the taxpayer-funded plug-in car grant offering up to £3,000 off an eligible electric vehicle
More needs to be done in terms of electric car incentives, industry insiders suggest
While subsidies and incentives for electric cars are one of the biggest attractions to make the switch to plug-in vehicles sooner, they are not working as hard as they could be, according to two new reports.
The first study, based on a poll of 4,000 motorists by consumer motoring website Honest John, found that two in five drivers are unaware of the taxpayer-funded Plug-in Car Grant.
The scheme offers buyers of electric cars up to 35 per cent off the purchase price of qualifying vehicles, up to a maximum of £3,000.
Dan Powell, managing editor of HonestJohn said: ‘The Government has set itself an ambitious target of banning the sale of new petrol or diesel models, possibly as soon as 2030.
‘That requires a much greater uptake of electric and alternative fuel vehicles than there currently is.
‘While the Plug-in Car Grant is a great way to encourage this – from our research it’s clear too few people know about it.
‘The Government needs to do more to get the message out there and alert car-buyers to the help that is available for them as they go green.’
Transport secretary Grant Shapps has proposed for local authorities to paint parking spaces green in their busiest locations to reserved them exclusively for EVs
A separate report by The Motor Ombudsman found that the latest incentive for electric car owners – the introduction of green number plates – is doing very little to entice motorists.
A YouGov poll of 2,105 UK adults commissioned by organisation revealed that 88 per cent of UK drivers are not aware of the EV-specific number plates available form this autumn.
The scheme is designed to boost the profile of battery-powered cars and pave the way for future incentive schemes, which could allow them to use bus lanes and park free of charge in town centres in dedicated parking spaces that are painted green.
Almost three quarters of the panel polled by YouGov said they would be happy to have a green-marked plate fitted as standard if they were thinking of buying an EV.
However, only around a quarter of individuals thought that having dedicated green parking spaces for EVs would make them much more or a little more inclined to look at buying one, with 57 per cent being indifferent to the idea.
Commenting on the poll, Bill Fennell, chief ombudsman, said: ‘Despite the results showing that consumer awareness of the arrival of the new green plates remains low, the findings nevertheless show a positive picture overall that drivers are happy to embrace them.
‘However, when it comes to parking spaces being reserved solely for the use of EVs, it’s clear that the jury’s still out as to whether this will have any bearing on an individual’s decision to buy an electric vehicle.’
This month, a new comparison service has launched, helping electric car owners find the best tariffs, home charging and installation costs.
Rightcharge claims it can save bill payers more than £230 a year on their energy bills while drivers can also save more than £100 on the upfront cost of installing a charger.