Electric vehicles are now on average £107 CHEAPER a year to own than petrol cars, analysis of lifetime running costs reveals
The sweet spot for electric vehicle ownership has been achieved, with the average zero-emission model already cheaper to own than a petrol car, new research claims.
In 2020, the average lifetime running costs – including purchase price – for an electric car is £52,133, while an equivalent petrol model is £53,625.
On average, an electric vehicle would cost the owner £3,752 a year over the course of its life, compared to £3,858 for a petrol car, resulting in an annual saving of £107, according to Direct Line.
The latest Department for Transport data suggests the UK has already surpassed 100,000 pure-electric cars on the road, with 99,374 licenced zero-emission vehicles registered in 2019.
In 2020, Society of Motor Manufacturer and Trader figures show that 30,957 battery electric cars have been registered by the end of June, which is almost 160 per cent higher than sales in the first six months of last year.
Last month, pure electric cars accounted for 6 per cent of all motor sales, as the market continues to shift in favour of alternative-fuel vehicles – though the figures have in recent months been skewed by the plummet in registrations of new motors during the coronavirus lockdown.
Direct Line’s claim that electric cars are now cheaper to own is despite the average zero-emission model costing around £5,000 – or 22 per cent – more than a comparable model with a petrol engine.
That’s even when taking into account the £3,000 subsidy eligible for sub-£50,000 zero-emission cars though the Government’s Plug-in Car Grant.
The insurer has calculated that annual running costs average £1,742, or £33.50 per week for an electric car, which is 21 per cent cheaper than the running costs of a petrol car at £2,205 per year or £42.40 per week.
Annual tax and maintenance costs (including MOTs and servicing) for electric vehicles are 49 per cent lower than for petrol models, while refuelling costs 58 per cent less.
However, insurance costs are on average 25 per cent higher for electric vehicles. Direct Line says this is due to ‘current production costs and complexities involved in the calibration of computers used in these cars’.
The numbers were crunched based on the anticipated lifetime of a vehicle, which SMMT estimates to be around 13.9 years.
That means any new car bought today would likely need to be replaced by the end of 2034, just before the Government’s ban on petrol, diesel and hybrid cars comes into force.
The research also revealed that electric vehicles hold their value better than petrol equivalents, with analysis of AutoTrader’s second-hand car data revealing that a year-old electric vehicle only loses 12 per cent of its value, compared to a 24 per cent write down for petrol models.
Neil Ingram, head of motor product at Direct Line, said Britons could ‘already be saving money by switching from a traditional petrol or diesel car to an equivalent electric model’ now, rather than waiting for the 2035 ban to be implemented.
‘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,’ he added.
In the last fortnight alone, Nissan has unveiled its new £40,000 Ariya family car, BMW has launched its first electric SUV called the iX3 and the zero-emission Polestar 2 has arrived on UK shores.
On top of cheaper running costs and the plug-in car subsidy, electric car owners can also currently take advantage of the Electric Vehicle Homecharge Scheme, which contributes £350 to the cost of installing a wall-box charger at their properties.
There’s an additional saving of £300 could be made by having the installation carried out by an Energy Saving Trust-approved engineer.
It has also been reported that ministers had been considering the introduction of a scrappage scheme to boost electric car sales and help the motor industry recover from the economic hammer-blow delivered by the Covid-19 pandemic.
The Prime Minster had been said to be mulling the idea of a £6,000 incentive for those who traded in their old petrol and diesel cars for a brand new zero-emissions model, though the scheme has since been cast in doubt.
The findings come as a survey conducted by Direct Line revealed that almost two-thirds (61 per cent) of motorists would make the switch to an electric car if the technology and green car market continues to improve.
The biggest issues with the current selection of electric vehicles are the limited charging network (35 per cent), the high up-front cost (34 per cent) and the limited battery range (16 per cent).
However, the research also revealed that some people are still reluctant to make the switch, with over a quarter of motorists (27 per cent, or 11.4 million UK adults) stating that they would only ever buy a petrol or diesel vehicle if given the choice.
Anca Young, insight and intelligence manager at Thatcham Research, said demand for electric cars is being helped by Government incentives, especially for fleet buyers who benefit from 0 per cent electric vehicle company car tax, and that higher insurance costs for electric vehicles will begin to decline.
‘Although the cost of Lithium-ion batteries used in EVs is reducing, they remain more expensive than conventional internal combustion engine (ICE) powertrains and are therefore generally more expensive to purchase,’ Young explained.
‘There’s movement towards greater collaboration between vehicle manufacturers with a view to reducing the cost of EV development and production.
‘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.’
Source : thisismoney
