Is Running An EV Significantly Cheaper Than A Petrol Car?

A few years ago, most individuals purchased an electric car due to its green credentials. Now, EVs are being acquired not only for its environment friendliness, but for the savings achieved by driving electric, especially when compared to petrol or diesel cars.

Some of the savings of driving an electric car are quite obvious. These include:

However, less understood by consumers are the real savings from the reduced costs of driving an EV.  

Electric And Petrol Cars Have Some Similar Costs

Electric and petrol cars incur similar types of costs across: insurance, breakdown cover, repairs and maintenance. The key difference is that electric vehicles do not use petrol or diesel fuel, instead the electric car operates on a battery that needs charging via a suitable charging point.  

The size of the battery differs depending on the type and model of the EV, with battery electric vehicles (BEV) which rely only on battery power, utilising larger batteries than plug-in hybrids, that use both battery and petrol to run the car. 

How Does The Battery Compare To A Fuel Tank?

A fuel tank is expressed in litres, while a battery is expressed in kilowatt hours (kWh). The larger the kWh capacity of the battery, the larger the size of the battery and the longer the range of the EV. Exactly the same principle as a petrol car. The larger the fuel tank, the greater is the volume (litre/ gallon) of petrol that can be filled, the longer the driving range of the car

EVs Will Soon Be Cheaper To Insure

We at e-zoomed believe that insurance costs for EVs should be at par, if not much lower than petrol variants, given the lower risk profile of EVs and drivers.

It is true that alternatively fuel vehicles (AFV), which includes EV, have been more expensive to insure compared to petrol and diesel cars.  In a May 2018 cost analysis between the BMWi3 electric car and the BMW318i petrol car, the insurance cost for the petrol model was £824 compared to £1,089 for the EV.

Insurance companies are taking note of the growing demand of EVs and have begun focusing on the rapidly evolving electric car market. As recently as April 2019, insurance giant LV=GI announced the launch of what has been described as the first insurance product developed specifically for electric cars.

Given the continuous flow of new EV introductions and the pipeline announced by automotive manufacturers, insurance premiums for electric cars are set to decline as competition increases for the EV insurance market.

e-zoomed has partnered with Brightside to source the most competitive insurance for your EV.  You can get a quote here!

EVs Are Less Expensive To Maintain

Electric cars are significantly cheaper to maintain and service given the fewer moving parts and components in an electric car, with savings of more than 20% compared to petrol cars.

Electric Cars Cost Just £8 To Charge Fully

For a typical EV (range between 100 to 200 miles), home charging will cost between £4 and £8 for a full charge, depending on the size of the battery and the electricity tariff.  

Public charging points can be more expensive, but certain EV plans, like the ecotricity Fully Charged Bundle, allow EV drivers to achieve attractive savings on both public and home charging. We also encourage carefully planned long distance journeys, such that the cost of public recharging is minimised.

How Do I Calculate The Cost To Charge My EV At Home?

No need to fret! The math is simple. Let’s assume that your EV has a 60 kWh battery. If your home electricity tariff is 13p per kWh then to fully charge the battery it would cost 60 kWh x .13 p = £7.80. This is significantly less than filling a fuel tank of petrol or diesel that could set you back between £70 to £100. 

So Which Is Cheaper To Run, Electric Or Petrol?

It is true that the charging of EVs at home entails an initial set up cost for the home charging unit that can vary between £250 to £1,000. However, you do get a government grant towards the purchase of the charging point.

EV owners recover this initial cost fairly soon given the significant immediate savings from not having to use expensive petrol or diesel to run the car.

According to Go Ultra Low journey cost savings calculator, if a Hyundai Kona Electric is compared to a Hyundai Kona diesel, the cost per mile for the electric is significantly lower at 3.8p per mile compared to 9.4p per mile for the diesel variant. Moreover, depending on your annual mileage, total savings could be in the hundreds of pounds using an EV. 

Next: why not read about electric car depreciation.


Author

Ashvin Suri

Ashvin has been involved with the renewables, energy efficiency and infrastructure sectors since 2006. He is passionate about the transition to a low-carbon economy and electric transportation. Ashvin commenced his career in 1994, working with US investment banks in New York. Post his MBA from the London Business School (1996-1998), he continued to work in investment banking at Flemings (London) and JPMorgan (London). His roles included corporate finance advisory, M&A and capital raising. He has been involved across diverse industry sectors, to include engineering, aerospace, oil & gas, airports and automotive across Asia and Europe. In 2010, he co-founded a solar development platform, for large scale ground and roof solar projects to include the UK, Italy, Germany and France. He has also advised on various renewable energy (wind and solar) utility scale projects working with global institutional investors and independent power producers (IPP’s) in the renewable energy sector. He has also advised in key international markets like India, to include advising the TVS Group, a multi-billion dollar industrial and automotive group in India. Ashvin has also advised Indian Energy, an IPP backed by Guggenheim (a US$ 165 billion fund). He has also advised AMIH, a US$ 2 billion, Singapore based group. Ashvin has also worked in the real estate and infrastructure sector, to including working with the Matrix Group (a US$ 4 billion property group in the UK) to launch one of the first few institutional real estate funds for the Indian real estate market. The fund was successfully launched with significant institutional support from the UK/ European markets. He has also advised on water infrastructure, to include advising a Swedish clean technology company in the water sector. He is also a member of the Forbury Investment Network advisory committee. He has also been involved with a number of early stage ventures.

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