When we talk to fleet managers or individuals, people are often concerned that electric vehicles (EVs) are too expensive for them.
This simply isn’t the case though. In fact, researchers from the International Council for Clean Transportation (ICCT) showed that fully electric cars are already cheaper to run than petrol, diesel and plug-in hybrid models.
How much are electric cars?
At the moment, EVs are still regarded as new technology. In 2010, there were only around 12,500 electric cars cruising the world’s roads. Now there are more than five million, with over two million sold in 2018 alone. This means production costs are falling, which we’ve already seen with battery prices coming down significantly in the last few years.
How much does an electric car cost? Well, there are several things to consider. Firstly, you need to choose the make, model and trim level you want. Many people then compare the cost of this to the on the road (OTR) price of its petrol or diesel equivalent. In many cases at the point of direct comparison, the EV is more expensive than its internal combustion engine (ICE) counterparts. However, there are many other factors that make an EV cheaper than its equivalent once running costs and lifetime costs are taken into account.
Firstly, pure electric cars benefit from the government Plug-in Car Grant (PiCG) towards their purchase cost, which is currently £2,500. The PiCG is available on electric models including Nissan Leaf and Hyundai IONIQ. You can lease both cars through us for comfortably under £200 per month (+VAT) at the moment. The Renault Zoe is a little more, while if you’re looking for something bigger, then the Mitsubishi Outlander could be ideal at around £250 per month (+VAT) on a 9+47 deal. If you’re after a van, the Renault Kangoo takes advantage of the government’s scrappage scheme and comes in at just £99 per month (+VAT) on a 24-month deal with no deposit.
When you lease an electric car, you don’t need to worry about its resale value. However, it’s good to know that EVs hold their value better than their gas-guzzling counterparts anyway, which does help with leasing costs as there is less depreciation on the vehicle. You also won’t need to worry about high fuel prices or running costs associated with engine problems. So, say goodbye to having to replace timing belts, head gaskets and spark plugs, or taking your car in for air filter and oil changes.
How much does it cost to charge an electric car?
Here’s where it gets really good. The cost of charging an electric car is one of the biggest attractions of switching from petrol or diesel because EV drivers can save up to 80% on fuel costs.
To work out the cost of a full charge for a specific vehicle, all you have to do is multiply the size of the battery by the cost of electricity. Most people charge up overnight when energy is cheapest. There are now special EV energy tariffs where you can pay less than 5p per kilowatt-hour during off-peak hours.
Let’s say you have a Peugeot e-208. This car has a 50kWh battery. If your electricity costs 5p per kWh, a full charge is only £2.50 (50 x 5 = 250p / £2.50). With a range of up to 211 miles, the savings you can make on fuel are astronomical. If you cover 10,000 miles per annum, this means you’ll pay less than £120 for the year (10,000 ÷ 211 x 2.50).
Now let’s take a look at a comparison between an electric car and a diesel. If you cover 10,000 miles in a Volkswagen Golf 1.6 TDi SE Navigation – with a combined fuel economy of 68.9 mpg and a diesel cost of 130p per litre – you’ll pay out around £860. The VW e-Golf meanwhile costs just over £6,500 more if you buy one outright, with the government grant included. It has a 33kWh battery and range of 143 miles, so a full charge costs £1.65 (33 x 5 = 165p / £1.65). Those 10,000 miles meanwhile will cost around £115 (10,000 ÷ 143 x 1.65).
That means going electric will save you almost £750 a year on fuel alone. You can lease an e-Golf for just £192 per month (+VAT), based on a 9+35 contract with 5,000 miles per annum. You’ll need a charging point installed at home to make your EV as cost-effective as possible, but there are savings to be made here too. The government offers grants of £350 from the Office for Low Emissions Vehicles (OLEV) towards a smart home charger, while some manufacturers and energy providers offer free or heavily discounted home charging points. You can read more about this here.
What is the cost of charging an electric car at a public station?
Over 90% of EV charging takes place at home, as this is usually the cheapest way to top up your battery. If you need to cover more miles than the range that your car offers in a day though, you’ll probably need to use a public charging point. These are often ‘rapid chargers’ that can restore your battery from empty to 80% in just 30 minutes.
Some places, such as shopping centres, supermarkets and hotels, offer free charging. Generally, though, you’ll have to pay. The cost varies between providers, although you can expect to pay something between £1.30 and £3.90 per hour for a fast charging point. These top-up at a rate of 7-22kW of charge per hour. Rapid chargers offer 50kW per hour or more and often cost around £12.50 an hour.
Using our Peugeot e-208 as an example again, a full charge at a public fast-charging point that costs 18p per kWh is £9. If you go for a rapid charge at 25p per kWh, you’re looking at £12.50. This is why most people prefer to top up at home using a smart charger during off-peak hours. Public points are necessary when you travel longer distances though, and you can use Zap-Map to find charging stations across the UK.
Electric car battery replacement cost
Although batteries are much more reliable than combustion engines, the cost of a full replacement can be a concern. Especially when you’re talking about a sum of around £5,000 to replace the battery in a Nissan Leaf. However, we’ve been helping our customers go electric for 10 years. From our experience, batteries don’t fail.
If they do, there are usually long manufacturer warranties which cover them. Most car manufacturers expect their batteries to last for something between 10 and 20 years, and up to 200,000 miles. Indeed, Nissan reported in 2019 that they now believe their EV batteries will last 15-20 years, rather than the original prediction of eight years.
Leasing is the perfect way to avoid any issues with EV battery replacement costs. Your manufacturer warranty should cover your battery for the duration of your lease, and any issues – rare as they may be – will be quickly corrected.
Do electric vehicles pay road tax?
Another major attraction with EVs is that there’s no road tax to pay for pure electric cars. This is because it’s based on CO2 emissions, which battery-powered cars don’t produce. However, luxury EVs which have a list price of over £40,000, such as the Jaguar I-PACE S, attract Vehicle Excise Duty of £320 for the first five years. Though there are still other savings as these ‘luxury’ cars are exempt from paying London’s Ultra Low Emission Zone and Congestion charges.
What other costs are there?
If your company has a fleet of EVs, you may want to install some charge points in the car park. Currently, the government’s Workplace Charging Scheme offers businesses a contribution of £500 towards up to 20 charging points. That could help your bottom line to the tune of £10,000. Having these points for visitors to use can be a great way to show off your green credentials, while also leading to potential clients or suppliers staying longer on your premises.
Other Considerations
There are a final few things to consider when thinking about the costs of EVs and comparing them to conventional vehicles.
EVs will typically have maintenance costs 30% lower than conventional vehicles. Internal combustion engine vehicles have complex engines with many thousands of moving parts. All of these parts require lubricants and frequently wear out and need to be replaced. EV engines, by contrast, have just two. Many EVs also have regenerative braking which reduces wear on brake pads, lessening the frequency with which these need to be changed.
EVs also hold their value better. The prices for used electric vehicles are going up whilst prices for used diesel vehicles are going down. Of course, if you lease an electric vehicle then you don’t need to worry about depreciation anyway.
Sources:
https://www.theguardian.com/environment/2019/feb/12/electric-cars-already-cheaper-own-run-study
https://singularityhub.com/2019/04/29/electric-cars-are-estimated-to-be-cheaper-than-regular-cars-by-2022/
https://www.buyacar.co.uk/cars/economical-cars/low-emission-cars/536/government-electric-car-grant-the-complete-guide
Header photo by Nick de Partee
