What is the cost of running an electric car?
Electric cars are cheaper to run than their petrol and diesel counterparts, but exactly how much does an electric car cost to run?
While it's true that electric cars are typically more expensive to buy, lease or finance compared to their combustion-engined equivalents, after that higher initial investment, switching to electric can quickly begin to save you money thanks to low running costs and lower servicing costs.
Overall, the total cost of ownership (TCO) of electric cars is significantly lower than owning a petrol or diesel car – especially if you keep the initial outlay down by choosing one of the models on our list of the cheapest electric cars on sale right now.
Regardless, what exactly keeps the total cost of ownership down? And what costs do you need to consider before getting your first electric car? Here, we explain the major costs associated with owning an electric car...
Cost of charging an electric car
The main expense for electric vehicles is recharging. Just as normal cars need to be refuelled with petrol or diesel, electric vehicles need to be regularly topped up with electricity, with charging taking place either at home using a wallbox charger or at a public station. Where and when you charge determines how much you'll pay.
According to government estimates, 90% of charging takes place at home, with many homeowners investing in a dedicated wallbox charger to make the process safer, faster and more convenient. Home wallbox chargers can cost from less than £300 for a 3kW system, rising to over £1,000 for the fastest, most powerful 11kW units. However, this is a one-off cost that quickly pays for itself, plus the government provides a grant of up to £350 that often covers a good proportion of the cost of the most common wallboxes.
After that, it’s a matter of your energy tariff. Currently, electricity costs around 14p per kilowatt-hour on an average household tariff. That means it would cost you less than £7.50 to completely recharge the 52kWh battery in a Renault ZOE. On average, that works out to 3p per mile thanks to the ZOE’s 245-mile range. Therefore, if you drive over 10,000 miles a year and only charge at home at that price, you'd pay less than £300 for ‘fuel’ over a year.
For reference, even the most efficient petrol and diesel cars are likely to cost three or four times as much to run. However, you can reduce that figure further if you’re able to take advantage of a dual-rate tariff and schedule your car’s charging sessions for specific time periods at night when lower electricity prices fall.
Public charging stations tend to be more expensive to use. Tesla's Supercharger network – which is exclusive to Tesla owners – charges around 24p per kWh, while those using IONITY's rapid-charging network are charged 69p per kWh. However, chargers on these networks allow you to recharge at much faster speeds – up to 350kW in the case of IONITY – and certain charging networks like BP Pulse offer members and registered users discounted rates.
Electric cars and road tax
Fully electric cars are currently road-tax-exempt, so there's no annual Vehicle Excise Duty (VED) payment to make. This can bring big savings over the years. Currently, all other vehicles are taxed based on how much carbon-dioxide they emit. For example, the Hyundai Kona Electric costs nothing to tax, as it emits no CO2 at all. However, the petrol version of the Kona emits 121g/km of CO2, so it costs £155 a year to tax.
Plug-in hybrids and conventional hybrids meanwhile are classed as alternatively fuelled vehicles, but only get a £10 discount on the usual rate, meaning you still have to pay £145 to tax them.
Company-car drivers also benefit hugely from the lower Benefit-in-Kind (BiK) rates electric cars attract. For the 2021/22 financial year, electric cars only incur a 1% BiK rate, which will rise to 2% for the following three financial years. Compared to an entry-level diesel Mercedes GLC SUV, which attracts a 37% company-car tax rate, and can cost £3,251 a year for 20% taxpayers, the more expensive Tesla Model 3 Long Range costs only £97 a year in BiK.
How much do electric cars cost to service?
Another large bill motorists fear comes from servicing and repairs. The good news is that electric vehicles are in general cheaper to service and maintain than their petrol and diesel counterparts. The government’s Go Ultra Low campaign estimates electric vehicles can be up to 70% cheaper to service and maintain. This is largely because they have fewer moving parts and fewer items that wear over time.
For example, a 36-month service plan on a BMW i3 costs around £15 per month, compared to £20 for a BMW 1 or 2 Series, or £25 for a 3 Series. The same goes for other brands. Nissan, for example, charges £13.99 per month for its two, three or four-year service plans when purchasing an electric car, rising to £19.99 for petrols and £23.99 for diesels.
Where the real savings come is when you need to replace parts after the warranty runs out. Electric cars don’t need oil filters and have no cambelts or other items that are costly to replace.
How much do electric cars cost to insure?
Insurance prices in the UK have risen over the past several years, and although electric vehicles are different from conventional cars, they also have to be insured. While servicing, fuel and tax are cheaper for electric cars compared to conventional vehicles, electric vehicles tend to be more expensive to insure.
This is partly because their repair costs are higher, but also because there aren’t enough trained technicians in the UK to do the work. Research conducted in 2017 by comparison site comparethemarket.com found that some electric vehicles can cost 45% more to insure than conventional cars. However, this isn’t always representative.
Our research found we could be insured on a Hyundai Kona Electric for £648 a year. Using the same details of a 42-year-old engineer living in Banbury, Oxford, who's married and a house owner, the insurance on a diesel Kona cost £612.
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