Electric

The cost benefits of driving an EV

06 / 04 / 2022  |  Driver Guides

The gap between the purchase price of electric vehicles (EVs) and vehicles powered by an internal combustion engine (ICE) is constantly narrowing. On top of this, manufacturers are introducing more and more models of EVs which differ only from their petrol and diesel counterparts in the way they’re powered. It’s making the switch to EVs a more straightforward choice for drivers like you.

But once you’ve decided to make the switch, what about the day-to-day cost of driving an EV in comparison to an ICE car?

It’s here where the difference between the two forms of motoring becomes noticeable – and you might just be surprised at what you’re about to discover.

Charging costs

You know how frustrating it is when you fill up your car for one price, then a mile down the road you see a filling station with a cheaper price on its electronic display? The same applies when charging an EV; you don’t decide on the cost of the electricity, the company which provides it does. It’s a good idea to shop around if you know you’ll be using certain charge points regularly.

The capacity of an EV’s battery is measured in kilowatt hours (kWh). The cost of using an EV charge point is per kWh. As an example, if you drive an EV with a 90kWh battery and a public charging point costs 35p per kWh, it will cost you £31.50 (90 x 0.35) to fully charge it.

The recommended optimum percentage charge for an EV’s battery is around 80%, but actually this can sometimes be 100% and is dependent on manufacturer guidance.

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Overnight domestic charging on home tariffs is also likely to be considerably cheaper, with some suppliers even having special rates for EV drivers. Consider contacting your energy supplier to check your energy tariff as they tend to offer lower prices during off-peak times. Some charge points and apps will allow you to set when to charge your car – do this in low peak for maximum cost efficiency. You’ll need to factor in the cost of a home charge point, but there are government grants available, depending on the type of home you live in.

Tax benefits of EVs

Any brand-new car with an RRP of less than £32,000 that emits less than 50g of CO2 per kilometre driven (g/km) and has a zero-emissions range of 70 miles or more is eligible for a grant off the purchase price of up to £1,500. You could be saving money by driving an EV before you’ve even got behind the wheel.

Vehicle Excise Duty, which is commonly referred to as road tax, is another area in which EV drivers can have fewer outgoings compared to those in ICE cars. Drivers of pure EVs that have a list price of less than £40,000 don’t have to pay a penny in road tax.

And if you drive in central London, you won’t have to pay the daily London Congestion Charge. This exemption has the potential to save an EV driver more than £3,000 every year if their daily commute takes them through the zone, which was expanded in 2021.

Birmingham’s clean air zone (CAZ) surcharge has also been introduced on petrol and diesel cars which makes an upgrade to an EV more attractive as it will help you escape these hefty annual charges.

Company car and salary sacrifice EV drivers get an even better deal. The Benefit-in-Kind (BIK) tax, and the rates for zero-emission EV drivers are tiny in comparison to people in a similar position who drive a car powered by petrol or diesel.

In tax year 2022, the BiK rate on an EV is just 2% and it remains frozen at that rate until 2025. In the same period, the driver of a typical car emitting 102g/km of CO2 would have pay 25% BiK tax.

 

At your service

Taking an EV to a garage or service centre is also less costly with an EV, because it doesn’t contain as many moving parts as an ICE car. All EVs are automatic transmission, so no clutch means no gear box and no fuel means no fuel tank, fuel line or fuel pump. Because of these differences, government estimates have placed servicing costs as being 70% cheaper than those of a fuel-powered car.

It costs marginally more to insure an EV over an ICE car, but this is another benefit of choosing an EV through a company car or salary sacrifice scheme – your insurance is included.

An EV may even make you money

Vehicle-to-grid (V2G) technology is being pioneered by some energy suppliers. Their charge points store electricity in the car’s battery when the electricity is cheaper and more likely to have been generated by renewable sources, like solar or wind power. It then sells this energy back to the grid when there’s demand for it.

It's your choice

The choice of driving an EV or ICE car is entirely down to personal preference. If you’re considering choosing an EV as your next car, there’s never been a better time to make the switch.

From 2030, the sale of new ICE cars will be banned by the government as part of the drive to a carbon-free landscape.