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    Are electric cars cheaper to run?

    For a long time, a major argument for switching to an electric car was the lower running costs. Between cheap charging, tax breaks, government subsidies, and their longer lifespan, it seemed fairly certain that, despite their typically higher purchase price, EVs would end up making more economic sense over time compared to petrol or diesel engines. 

    However, since mid-2022 we have seen an energy crisis push electricity prices up to double what they have been, and in new statements we’ve seen road tax (otherwise known as VED) rise for EVs, and grants to switch to EVs have been scrapped. 

    Tesla has slashed the prices of their cars, and most car brands are electrifying their ranges quickly in anticipation of the 2035 switchover. But, are the running costs for EVs also becoming more accessible? This could depend on whether you live in an area with good infrastructure for EV driving.

    This is all important information you should be thinking about if you’re considering selling your car to make the EV switch.

    To learn more about the cost to run EVs versus fossil fuel engine cars, read on.

    First – how much are fossil fuel car running costs?
    Why has the cost to charge EVs changed?
    How much does it cost to charge an electric car in 2022-23?
    How much are hybrid car running costs?
    Are electric cars cheaper to run than petrol or diesel?

    are electric cars cheaper to run
    Is a full charge still cheaper than filling the tank?

    First – how much are fossil fuel car running costs?

    Conventional petrol and diesel-engine cars are subject to the full gamut of charges. Their Vehicle Excise Duty (VED, or road tax) has no discounts or exemptions, and unless they’re compliant with the correct engine standards, they have to pay for each day they drive in London’s Ultra Low Emission Zone (ULEZ) and Birmingham’s Clean Air Zone (CAZ), and any other emissions-based zones in the UK. 

    If you’re thinking of buying a car in the near future, and are considering fossil fuel engine options, you should bear in mind the following running costs:

    CostsPetrol and dieselFully-electric
    InsuranceVariableVariable
    Road tax: the first yearMost petrol and diesel passenger cars will emit at least 100g/km of CO2 and therefore cost a minimum of £140 in the first yearFree until 2025. Then, £10 for cars registered after 2017.
    Road tax: subsequent years£165Free until 2025. Then, £165 for cars registered after 2017.
    Road tax: expensive car supplement£355 payable for five years if your car was bought for more than £40,000Free until 2025. Then, £355 payable for five years if your car was bought for more than £40,000
    Fuel/energyAt the time of writing, the RAC records fuel prices as follows:Unleaded 148.35 pence per litreSuper unleaded 163.53 pence per litreDiesel 170.33 pence per litreLPG 78.34 pence per litreAt the time of writing, electricity in the home is capped at 34p/KwH plus 5% VAT.
    Public chargers will cost at least this level, plus 20% VAT and potential further charges.
    Installing your own wall-box can cost from just £200, and allow you to make use of off-peak tariffs for at-home charging.
    Maintenance and repairsVariable, potentially cheaper but more frequently neededVariable, potentially more expensive but less frequently needed
    ParkingVariable, rarely free based on fuel typeFree/discounted parking for EVs in certain locations
    Local charges e.g. Clean Air Zones (CAZ)Subject to chargesUsually not subject to charges
    There’s a lot to weigh up when considering the running costs of EVs versus combustion engine cars.

    For more information on road tax and how it’s changing in 2025, check out our ultimate guides to taxing a car and tax on electric vehicles.

    Why has the cost to charge EVs changed?

    The cost-of-living-crisis that took hold in 2022 has slowed down the market share growth of EVs in three ways: people have less to spend on a new car, making it harder to switch to an EV; it’s much more expensive to charge an EV at home than it was before the energy crisis; and it’s even more expensive to charge the EV at public charging stations. Since public chargers are subject to a 20% VAT (15% higher than the rate on domestic mains electricity) they can end up being more expensive than filling a petrol engine, now that energy prices are so highly inflated. 

    Rapid chargers are even more expensive, making it hard to plan longer car trips in an EV. Current fuel prices are capped until March 2023, at which point these costs are all subject to change once more.

    Due to the inflated costs of electricity, many people are doubting EVs as an affordable option.

    How much does it cost to charge an electric car in 2022-23?

    To bring an Audi A6 Avant up from 20% battery level to 100% costs an estimated £5.18 at a public charger, versus £1.61 at home, for the energy only. This does not factor in any costs to use the charger itself, discounts users may have at certain branded chargers, or other factors. 

    There’s more on electric car charging in our guide. There are also several online sites and tools where you can plan ahead your public charging, such as ZapMap. 

    A good way to save money is to install a wallbox at home, if you have off-road parking. It’s one of the few EV costs that are still supported by a government grant. You could also choose an energy provider that offers an off-peak tariff, so you can charge your car cheaply overnight, for example. 

    How much are hybrid car running costs?

    If you’re expecting them to be somewhere in the middle, you’d be right! You still need to fill up the tank, but your range will go much further thanks to the electric motor kicking in. These days there is a wide range of hybrids. 

    Cost Hybrid
    InsuranceVariable
    Road tax: the first yearDepending on the CO2 output, from £10 for cars registered after 2017.
    Road tax: subsequent yearsFree until 2025. Then, £165 for cars registered after 2017.
    Road tax: expensive car supplementFree until 2025. Then, £355 payable for five years if your car was bought for more than £40,000
    Fuel/energyHybrids tend to have much higher fuel economy than fossil fuel engine cars. So, although fuel and energy prices are the same, you’ll go further on a tank of fuel. This also applies to plug-in hybrids.
    Maintenance and repairsVariable
    ParkingFree/discounted parking for EVs in certain locations
    Local charges e.g. Clean Air Zones (CAZ)Usually not subject to charges
    Hybrid’s are often a middle-ground between combustion engine cars and EVs

    Some plug-in hybrids have much longer electric ranges than the models that simply capture braking energy and turn it into electric power. Depending on whether you do more city driving, or long stints on motorways, there’s probably a hybrid model available with great fuel efficiency that suits your lifestyle. 

    Hybrids can be more expensive to purchase than fossil fuel engine cars, but the good news is that most car brands are rolling out hybrid versions of their most popular models, as a way of electrifying their range. So you can feel the difference for yourself between, say, your VW Polo and its hybrid sibling, and gauge whether the running costs will offset the higher purchase price. 

    Many car brands now offer hybrid versions of their most popular models.

    Are electric cars cheaper to run than petrol or diesel?

    Electric cars have been touted as cheaper to run for a long time. However, since mid-2022 this statistic has been up for debate, due to the increase in energy costs as well as taxation on public charging. 

    Furthermore, there used to be several generous public schemes incentivising adoption of electric vehicles. Many of these are no longer offered, and EVs are for the most part still more expensive than their fossil fuel counterparts. 

    The truth is that EVs aren’t going anywhere – and in fact, EVs represented nearly a third of all new car production in the UK in 2022. Policies around taxation, subsidies, and local charges are continually subject to change. So, you’re likely to end up being penalised less over the coming years by switching to an EV. 

    However, if you rely on driving long distances and need to find the cheapest possible way to do so in terms of running costs, it might be a petrol or diesel engine car that fits your needs best in the short-term. It’s worth going for a modern, high-quality engine with low CO2 emissions to keep the tax rate and potential CAZ charges to a minimum.

    Ready to sell your car?

    Ready to learn more about valuing, maintaining, and selling your car? Check out more of our guides here, covering everything from hybrid and electric car depreciation, to converting your car to dual-LPG fuel.

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