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Swapping to an electric vehicle could save you thousands

On average, you’re a 40-year-old woman. You weigh 72.2kg and you’re 5ft 4in tall. Your salary is £33,402, of which you donate £27 to charity per year. You set your alarm for 7.10am, embark on a commute of 29 minutes, and you walk less than one mile per day. You go on holiday 3.6 times a year and you own a small percentage of a dog. 

What you just read was completely pointless. Almost by definition, the average Brit doesn’t exist, and while these statistics are of some use when talking in vague, general terms about a country of 70-odd million people, they’ve never been particularly helpful from a consumer perspective. Which is why I initially ignored a release from Auto Trader, telling me that the average Brit could save up to £11,500 by 2035 by swapping their petrol car for an electric vehicle (EV). 

But there’s a grain of truth in there. Some Brits really could save thousands of pounds in fuel costs by buying an EV. Just as there might be a 5ft 4in, 40-year-old woman reading this article, mulling a trip to the scales just to check, there probably are readers among you who could make five-figure savings by investing in a battery-electric vehicle[1].

Some Brits really could save thousands of pounds in fuel costs by buying an EV – but it all depends on your unique lifestyle Some Brits really could save thousands of pounds in fuel costs by buying an EV – but it all depends on your unique lifestyle Credit: Getty

Electric cars are cheaper to run – usually

One of the reasons averages don’t help us make individual decisions is that the number of variables is just so unknowably vast. The scenario put forward by Auto Trader assumes an average weekly driving distance of 127 miles, split between school runs, supermarket trips, commuting to work and so on. It also assumes that a representative EV range between charges is 250 miles (that is rather high for a real-world, all-season average range, but we’ll run with it). Using these figures, it seems like a full charge would last Ms Average about a fortnight of careful motoring. 

This is interesting for two reasons. First, fossil-fuelled Brits seem to overestimate how often they would need to charge an EV. Auto Trader’s data says 41 per cent of respondents believe they would need to charge up every three days which, even in the most pessimistic and range-anxious terms, would imply they’re doing 70-odd miles every 24 hours. The fact is, most of us could make do with a modern EV by charging it once a week or less. 

Secondly, it means anyone charging at home is likely to make serious fuel savings if they buy an EV instead of a petrol or diesel car. The low cost of off-peak electricity means that drivers charging their car overnight pay a fraction of the cost of an equivalent tank of diesel. Even those more expensive home energy tariffs still represent a big saving over petrol or diesel costs. This is how Auto Trader arrived at its figures – someone driving 127 miles per week, charging up at home, could save £942 per year – or £11,539 by December 2035.

That’s me out of the running, though. Like most other flat-dwellers, I’m reliant on public chargers, which can be cheaper than fuel pumps if you use the slower charge points, but for rapid chargers, tends to be no cheaper and can even be more expensive. 

For instance, many public rapid chargers on the motorway charge 69p/kWh (some a bit more, some a bit less, but that’s a fairly common price to pay). That works out at nearly 22p per mile in an EV doing 3.2 miles per kWh, compared with someone who charges on an off-peak tariff at home, when that cost per mile can easily drop to around 4p depending on your tariff and your car’s efficiency. 

For some context, a petrol car doing 40mpg currently costs around 14p per mile, while a diesel car doing 55mpg is 13p per mile.

So, again, for those who charge at home it can save thousands. But, back to my non-average car usage; I don’t drive anywhere near 127 miles per week, which makes the cost advantages even more marginal. And that will also be the case for the millions of Brits who can’t charge at home but still have need for a vehicle, even if for lower-than-average mileage. In that instance, at the moment the “fuel” costs for an EV are currently no incentive at all. 

Electric cars cost more to buy 

That’s partly because electric cars are still pretty expensive. The average of about £50,000 makes it sound worse than it is – a larger proportion of EVs (compared with petrol cars) are luxury models with commensurate price tags – but even cheaper electric cars cost a lot more than their closest internal combustion equivalents. 

Ignoring the tiny £7,695 Citroen Ami and outdated Smart ForTwo for a moment, the cheapest full-fat electric hatchback on sale at the moment is the BYD Dolphin[2] – a budget Chinese model which costs £25,500. That’s not bad, but the ultra-affordable, fossil-fuelled Citroen C3[3] is around £12,995, so it’s hardly good value in that context. 

MG does buck the trend, with the MG5[4], MG4[5] and MG ZS EV[6] all coming much closer to comparable petrol or diesel cars and the rapid development of electric cars means they’re getting cheaper, but petrol has had a 100-year head start. 

This difference is similar in the second-hand market. There just aren’t as many used EVs around, for a start, and most affordable used EVs tend to be older models with limited range. It’s much easier to find a cheap, second-hand petrol or diesel car than a comparable EV, although that’s slowly changing as three-year-old cars from 2021 begin to drift into the classifieds. 

Of course, electric cars are becoming more affordable. The Dacia Spring – already for sale overseas for €17,300 (£15,000) – will soon go on sale in Britain priced at about £20,000. Volkswagen[7] has a budget EV in the pipeline, too, and a slew of Chinese new entrants are poised to undercut European brands further.

'Even cheaper electric cars cost a lot more than their closest internal combustion equivalents' writes Wiseman 'Even cheaper electric cars cost a lot more than their closest internal combustion equivalents' writes Wiseman Credit: Getty

Some data suggest that EVs are depreciating faster than internal combustion cars, though this isn’t clear-cut, and prices have been notably unstable over the past year or two anyway with Tesla[8]’s repeated price cuts. Depreciation is obviously great for second-hand buyers, but potentially heavy loss of value for new EVs is bad news for those who want to lease, as leasing companies will account for potentially uncertain loss of value in the monthly price. Some analysts think these prices are over-inflated but, either way, leasing an EV can be an expensive prospect at the moment. 

Electric cars are cheaper to tax and maintain 

Timing belts, particulate filters, spark plugs, fuel pumps – all relics from the fossil fuel age, soon to be as antiquated as manual chokes and starting handles. The relative mechanical simplicity of EVs means they require a different approach to servicing, with fewer scheduled replacement of parts and, generally, less to go wrong. 

Even the most advanced petrol engines require moderately regular fettling by a mechanic to keep them sweet. Endless studies, some contradictory, have found EVs to be cheaper to maintain than petrol or diesel cars – a ballpark figure is 20 to 25 per cent cheaper per year than internal combustion. 

EV owners will continue to pay nothing for Vehicle Excise Duty until 2025. Beyond then, it starts to get complicated, but you can expect to spend £180 annually in the long run. Similarly, benefit-in-kind company car tax now stands at 2 per cent, but from 2025 this will begin to increase to 5 per cent by 2028. Still far cheaper than comparable petrol, diesel or hybrid options, which is likely why the market has recently seen fleet sales of electric cars increase, and retail sales drop slightly. In September 2023, fleet EV sales rose by 50.6 per cent while retail EV sales fell by 14.3 per cent. 

Even so, it is still worth pointing out that electric car sales have increased month-on-month for well over three years and look set to continue to do so, now accounting for more than 16.5 per cent of the UK’s car market. 

Electric cars are (much) more expensive to insure

Insurance is a major consideration. The soaring cost of premiums[9] has affected electric car owners the most, with some being quoted totally unworkable sums – or being refused cover altogether. It’s such a problem that some analysts fear it will stymie a shift to zero-emission vehicles, as cash-strapped motorists fail to understand why they should pay such a high premium for ‘going green’.

Insurers cite the high cost of repairs as a key reason behind the increased prices and “pause” on offering policies to EV owners. Thatcham Research suggests that EVs cost a quarter more to repair than petrol-powered cars, and the high cost of the battery means that EVs can become a total loss even in relatively minor accidents. A scarcity of spares is another reason that insurance companies have given for the high costs and reluctance to provide cover. 

I live in London and I work as a journalist, so my insurance is already pretty high. But I was still a bit taken aback by how much more it would cost me to insure an EV than a petrol car – it’s about three times as expensive to cover a 2021 Hyundai Ioniq 5[10] than a Nissan Qashqai[11] of the same year. In fact, it would be marginally cheaper for me to insure a Ferrari Portofino than the Hyundai…

Conclusion: averages are of limited use in making personal decisions.

It would be lovely if somebody could definitively say that running an electric car will save you cash but, unfortunately, there are just too many variables for any such claim to make sense. Whether you can charge at home remains a significant determining factor, but the cost of insurance is also an increasingly critical consideration that can determine whether EVs make sense for you and your household financially. Certainly, if you pay for your own insurance, you could find that the massive energy savings are eclipsed by the massive cost of your premium.

Ultimately, though, this isn’t just a question of affordability. In the same way we recycle our tins[12] and buy free-range eggs[13], most of us are happy to spend more time, effort and money in order to make a positive impact where we can. There are plenty of households which absolutely cannot afford to get an EV at the moment, either for financial or practical reasons. But there are plenty more who could make the switch to an electric car and save money by doing so – especially if you have that bang-average British lifestyle.

Regardless of how average you and your life may or may not be, is an EV cheaper to run? The honest answer: You’ll have to do the maths yourself to find out. 

References

  1. ^ battery-electric vehicle (www.telegraph.co.uk)
  2. ^ BYD Dolphin (www.telegraph.co.uk)
  3. ^ Citroen C3 (www.telegraph.co.uk)
  4. ^ MG5 (www.telegraph.co.uk)
  5. ^ MG4 (www.telegraph.co.uk)
  6. ^ MG ZS EV (www.telegraph.co.uk)
  7. ^ Volkswagen (www.telegraph.co.uk)
  8. ^ Tesla (www.telegraph.co.uk)
  9. ^ soaring cost of premiums (www.telegraph.co.uk)
  10. ^ Hyundai Ioniq 5 (www.telegraph.co.uk)
  11. ^ Nissan Qashqai (www.telegraph.co.uk)
  12. ^ we recycle our tins (www.telegraph.co.uk)
  13. ^ free-range eggs (www.telegraph.co.uk)

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