Running an Electric Car: An educational guide on the cost of owning an EV. - Our blog

Running an Electric Car: An educational guide on the cost of owning an EV.

Running an Electric Car: An educational guide on the cost of owning an EV.

Bishop' Stortford Property Market Adam Mackay 2nd November 2022

We’ve all heard about the benefits electric vehicles (EVs) have on the world around us – but how many of us have considered the impact that purchasing and running one will have on our wallets?

While nobody should be dissuaded from making the switch from fuel to electric, there are important considerations to make when purchasing any car - are EVs really cheaper? How much money can you save when charging instead of refuelling? And are there any hidden costs likely to spring up when you least expect them?

In this guide, we’ll look to educate prospective buyers on what it truly means to own an EV. We’ll assess a variety of factors, such as battery life, upfront fees, cost of charging, tax rates, grants and schemes, the impact of the energy crisis, and much more.

 

An introduction to EV uptake

 

 

Electric cars are becoming widely adopted across the UK, with EVs accounting for 12.4% of all new vehicles registered to the road in 2022.

 

This surge in popularity (up from just 1.1% of vehicles registered in 2015) speaks volumes about the changing attitudes of consumers. With sustainability awareness having more of an impact than ever on our spending choices, the age of the EV seems poised to begin.

 

 

Let’s take a deeper dive into just what the current EV landscape looks like, as well as what’s currently preventing these types of vehicles from becoming more widely adopted.

 

Global leaders in electric car ownership

 

 

The EV market is constantly shifting as more people, and businesses, adopt the use of this greener form of transport. Despite that, the names dominating the list of global unit sales for 2021 are familiar ones:

 

And when it came to the most popular models, Tesla once again led the way – with two of the top five units being a part of their range.

 

The numbers also indicate that Europe is at the forefront of EV adoption, with Scandinavia in particular leading the way when it comes to the percentage of electric-to-fuel cars on the road:

 

 

Other notable countries:

 

While China leads the way in regards to total number of charging points, the data tells us it’s Norway who provides the best charger-per-capita. A combination of several recent studies found that for every 10,000 citizens, there were the following number of charging points:

 

New incentives are being introduced all the time as the electric market continues to develop. These will adapt and evolve with the demand of the consumer, as well as the needs of the governments issuing the grants.

 

So how does the global outlook appear for the future? Fans of electric will be pleased to know that projections are strongly in their favour.

 

Current expectations predict there to be as many as 66 million EVs on global roads by the year 2040 – up significantly from the 3.24 million which were registered in 2020, and 6.75 million in 2021.

 

 

If the figures end up coming to fruition, the percentage breakdown of EV sales for the following decade could be as follows:

 

 

Current blockers to further EV adoption

 

Despite a host of benefits, and a clear uptake in the number of road users willing to give EVs a try, there are undoubtedly still reservations for the average consumer to overcome. A recent poll found what some of the biggest stumbling blocks for drivers are:

 

67%

Lack of charging stations

We’ve already seen how access to charging will vary depending on where you live. For a lot of drivers, a clear lack of public charging points is a massive detractor when it comes to making an electric purchase. Encouragingly, this is something which is constantly improving. More charging stations are being introduced on a monthly basis.

 

64%

Lack of variety

It might not be something which you give much thought to, but some drivers are relatively stuck in their ways when it comes to the make or model of car they want to drive. This has been a particular issue for those needing medium or heavy-duty vehicles. In good news, this is another factor which is being continually improved by manufacturers.

 

58%

Initial cost

 

While you’re likely to make a steady saving over the course of several years, the upfront costs of an EV (such as the purchase price, installation of charging units, and insurance) can all be off-putting for drivers. Just remember that it’s all worth it in the end, with drivers of EVs set to save hundreds (if not thousands) across a vehicle’s lifespan (more on this later).

 

The costs of EV ownership

 

 

We all know that EVs can be a little pricier than traditional vehicles when it comes to their upfront costs. But how many of us can say we really understand the price of owning an EV after a few years behind the wheel?

 

Exploring upfront costs of EVs

 

 

Just as with internal combustion engine (ICE) vehicles, there’s no one-price-fits-all answer when it comes to the overall upfront cost of your car. That said, many manufacturers produce ICE and EV versions of the same car, so it’s easier for us to make a comparison between the two types.

 

 

Besides the initial purchase price, drivers of an EV are likely to also want to install a private charging point at home. While this isn’t a necessity, it’s something that greatly reduces range anxiety – as well as reducing the amount of time you’ll need to leave your car at a public charging location.

 

Prices will vary depending on the cost of labour, the quality of the charger you’re installing, and the equipment needed to accommodate a point at your home. In 2022, a homeowner can expect to pay roughly between £899 and £1,299 for home installation.

 

 

While this is a big sum to factor into your initial purchase, it will save time, money, and stress further down the line.

UK EV purchasing incentives

 

Most governments see a push for electric vehicles as an important part of their sustainability efforts. As such, there have been grants, schemes, and incentives introduced to make it more affordable for everyday people to invest in and purchase an EV. Here are some of the most popular in the UK:

 

EV chargepoint grant

 

Owing to the higher prices involved with installing a chargepoint at home, the government is willing to pay up to £350 (or 75% of the total cost if it’s less than that amount) for the price of installing one at your property if you are a landlord, renting, or living in flats.

 

The plug-in car grant

 

In order to subsidise the upfront cost of your vehicle, the plug-in car grant gives drivers up to £1,500 off the price of their EV, or 35% off the total price. The amount given will be whichever is lower.

 

Vehicle Excise Duty (VED) and congestion charges

 

Unlike regular vehicles, EVs are not subject to congestion charges in more populated areas. That means when driving through an Ultra Low Emission Zone (ULEZ), they’re not subject to paying a fee. They are also exempt from VED as long as they are 100% electric. Hybrid vehicles are not exempt.

 

Workplace charging scheme

 

Workplaces looking to install charging sockets can receive up to £14,000 off the total cost. This is broken down by a grant of up to £350 off the cost of installation per socket, across 40 different devices.

 

Capital allowance

 

In other good news for businesses looking to use EVs, you can write down 100% of the purchase against corporation tax in the year in which the car is bought.

 

Plug-in grant for vans

 

If a van is 2.5-3.5 tonnes of weight in gross, it’s eligible for a grant of up to £5,000 or 35% of the total purchase price. As with the regular plug-in grant, the amount you’ll receive will be whatever is lower.

 

Lifetime running costs

 

 

It’s over the lifetime of a vehicle where you’re expected to see the most bang for your buck. With fuel prices rising all the time, are electric owners finding they’re getting even more value for their money in the long term?

 

Cost of charging at home

 

Charging your vehicle on private property tends to be the most cost-effective and convenient option for most drivers. While prices will vary across the country (depending on the electricity rate of the area you live in), the national average charge per kWh of energy is currently 28p.

 

As an example, a 60kWh battery would require roughly £15.10 to be fully charged – which would see you travel around 200 miles.

 

And while this figure is already fairly low in comparison to what you might expect to pay for petrol or diesel, you can lower it even further by switching to a special electricity tariff which can lower that price some more.

 

EDF GoElectric, is a good example. At the time of writing, charges were just 4.5p per kWh of usage. That equates to just under £5 for a full charge.

 

The national average charge per kWh of energy is currently 28p.

 

Cost of charging in public

 

While charging at home offers familiarity and a fixed rate, charging your vehicle when out and about definitely also has its merits.

 

When it comes to the amount you can expect to be charged, things aren’t quite as black-and-white as they are when working out your home rates. A number of factors will affect how much you pay:

 

-Whether you’ll be offered a discount for being an existing customer at a business offering charging points

-The energy tariff which the public charging point uses

-The type of the charger you’re using. Most charging points can be viewed and accessed via mobile apps. If you’re looking to lower the cost of your charge, do some research before you drive and see which point is the cheapest.

 

If you want to work out roughly how much it will cost you to charge your car at a public point, you can use Zap-Map’s calculator tool.

 

Cost of charging at work

 

Some workplaces will offer free charging points as an incentive for their staff to drive EVs. This benefits them as it reduces the overall carbon footprint of the company.

 

Again though, this is not a one-size-fits-all approach. Some businesses will set up a system to charge their employees for charging. Common approaches to workplace chargers include:

 

-Free charging for all staff

-A time-based approach where a tariff is introduced after a certain period of time

-A flat limit on the amount of time a person can charge their car in a space

Make sure to discuss with your employer what kind of policy is in place before you decide to charge at your place of work.

 

Some workplaces will offer free charging points as an incentive for their staff to drive EVs.

 

Other costs to consider with an EV

 

While the upfront and charging costs of EVs are worth keeping in mind, there are other figures which need to be considered when making a decision about buying one. Here are some of the most important ones:

 

Insurance

 

While a lot of factors (such as driver age, accident history, and years of experience) go into determining how much your car insurance will cost, EVs tend to be more expensive to insure on average. This is largely due to a lack of historic data to compare against – making it tougher for insurers to know what a realistic premium should be.

 

Maintenance

 

While there are fewer moving parts than on traditional combustion engines, they tend to be heavier in nature. This means there can be more pressure exerted on tyres and suspension, resulting in the need to service them as frequently (if not more so) than petrol or diesel cars.

 

Depreciation

 

While all cars will depreciate in value over time, EVs are subject to slightly harsher standards, owing to the rapid advancements being made all the time in technology. Uncertainty over battery life also leads some to wrongfully suggest EVs have a shorter overall lifespan than ICE vehicles.

 

Installations

 

 

We’ve already touched on it, but the cost of installing a charging point at home is something you need to factor into your decision. It’s a big expense. And one which can take years, not months, to recoup losses through saving on charging over refuelling.

 

What rising energy prices mean for EV owners

 

These are uncertain times for everyone. The last thing you’ll want is the additional threat of soaring charging prices to cause you stress. While prices for charging are going to rise as a result of the energy crisis, there have at least been some rough guidelines posted for owners of EVs.

 

Since the introduction of a price cap in 2019, the price of charging your EV at home has been fixed at 21p per kWh. In April of 2022, this figure rose to 28p. And while that doesn’t sound like a massive leap in and of itself, it could add up over the course of a year.

 

For example, the cost of charging a 40kWh engine would have set you back £8.40 prior to the hike. That same charge will now cost £11.20.

 

This change might be frustrating for some, but it’s nothing compared to recent rises in the price of petrol and diesel. An average top-up for a petrol engine is now as high as £100.27 – with petrol costing on average 182.3p a litre, and diesel 188.1p.

 

So even if the extra few pounds gets you down, EV owners can at least be grateful that they’re saving the best part of £90 every time they charge their vehicle.

 

The environmental cost of EV ownership

 

We all know that running an EV is less damaging than a traditional ICE on the world around us. But how many of us can say we really understand both sides of the coin? Let’s take a look at both the positives and potential hidden downsides of owning an EV in regards to its impact on the environment.

 

The good thing about owning an EV:

 

Zero emissions

 

The most well-known positive to owning an EV is the total lack of tailpipe emissions (in the case of non-hybrid options). The lithium batteries of electric cars mean that no CO2 is produced or sent into the atmosphere as you drive.

 

Eco-friendly materials in construction

 

In an attempt to make EVs as green as possible, it’s becoming commonplace to see recycled and organic materials used as part of the production process. These can not only make a car more lightweight and efficient, but also mean unsustainable plastics and metals are not used in construction.

 

Clean battery production

 

While early EV battery production was somewhat unregulated, the continued adoption of this kind of vehicle has meant that things are drastically improving. As far back as the end of 2019, it was found that battery production had already become two to three times cleaner than in 2017.

 

Heightening sustainability efforts

 

Perhaps most importantly of all, driving an EV means you’re helping to reduce the damage done via global warming. It’s the responsibility of all of us to do what we can to alleviate issues which could cause climate change to get progressively worse.

 

What you also need to consider:

 

Hybrids aren’t perfect

While pure electric cars reduce tailpipe emissions completely, hybrids are still susceptible to CO2 production. Although they are a step-up on ICE vehicles, tests have shown a hybrid vehicle could produce as much as 50-300g per km travelled.

 

Ignoring other alternatives

Electric power has proven itself to be a solid alternative to traditional methods, but it’s not the sole form of sustainable power. Hydro, geothermal, and wind power are all also viable options. By focusing so heavily on electric power, we could run the risk of neglecting valid alternatives.

 

Ultimately though, the amount of CO2 saved across the lifetime of an EV more than makes up for any detractors from an environmental perspective. Broken down on a km-by-km basis, the figures are stark.

 

 

This calculator tool shows just how much less carbon dioxide is being pumped into the atmosphere when driving an average European battery-powered EV on UK roads. The numbers show EVs produce 62g of CO2 per km travelled, in comparison with other methods.

 

Guide provided by Auto Trader.

 

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