EV vs ICE: the cost of ownership
Despite rising electric prices, it’s still cheaper to run an electric car. Although there is a considerable rise since 2021.
It’s estimated that the average UK motorist spend £1,208 a year on petrol, and £987 on diesel. With the savings for 2022 for those switching would be £779 for petrol drivers, and £738 for diesel drivers (source).
Aside from insurance – which can be 25% higher for EVs due to production costs – the overall cost of owning an EV is generally less than an ICE vehicle.
So why are the costs cheaper?
Cheaper to refuel
Compared to petrol and diesel, refuelling a car with electricity is more cost effective. The average cost of electricity in the UK is currently 14.4p per kWh (source). And it’s estimated that the average pure EV costs just 4p per mile – with some of the latest vehicles such as the Nissan Leaf e+ running at just 3.7p mile. In comparison, a petrol car can cost anything from 9.9p to 17.2p per mile depending on engine size. Based on the average engine size of UK cars (1,610cc) it’s 11.8p per mile – working out at 3 times the cost of running an EV.
Cheaper to maintain
As previously mentioned, EVs have less moving parts than ICEs and therefore lower maintenance costs. Annual tax and maintenance costs are estimated to be 49% lower than for ICE models.
Grants, incentives & exemptions
There are also various government grants and incentives to help reduce the costs of EV ownership. Although the discounts available aren’t quite as good as they used to be, drivers can apply for a plug-in car grant, potentially receiving up to 35% (up to a max of £1,500) off the purchase price for vehicles up to £32,000.
EV owners are exempt from ULEZ charges, which as of last October extended up-to (but not including) the North and South Circular roads – which can cost as much as £12.50 a day. There are also further savings on road tax (0% for pure EVs) and other congestion charges. Additionally, company car drivers currently only pay 2% Benefit in Kind (BIK) tax 2022-24.
AutoTrader found that a 1-year-old EV only loses 12% of its value versus a 24% loss for ICEs. As used EVs are becoming more popular, their residual value has increased. On the contrary, petrol cars have a lot more depreciation, as do diesel vehicles, due to reputation damage in recent years.
Drive Electric recently calculated several EV and ICE comparisons to understand the difference in cost ownership. Taking four popular vehicles below (source).