The costs of running an electric car

Charging an electric car at home is always the cheapest option. Some energy providers now offer EV-focused tariffs that can cut costs even further. These are usually dual-rate, where electricity is cheapest overnight when your EV is charging, or single-rate – i.e., the same rate is paid throughout the day, but discounted if you own an EV.

To view the latest EV charging costs, click here.

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Other providers of EV charging tariffs include EDF Energy, Gridserve, BP Pulse, Ionity, and Ovo Energy.

The UK government offers a grant to save money on the installation of home EV charging points. The Electric Vehicle Homecharge Scheme offers up to 75 percent – up to a maximum of £350 – towards installing a smart charge point at your property. Depending on which model you choose, many car manufacturers include this when you buy an electric car. 

Charging on the public charging network – chargers found at motorway services, petrol station forecourts, car parks and other locations – is more expensive, but sometimes a more convenient way to charge an EV.

EV users can also charge your EV for free in certain locations. For example, 7kW and 22kW chargers at Tesco supermarkets are free to use. 

All you need to know about charging electric cars – including connector types, costs and EV range – can be found in our comprehensive guide here.

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Because they emit no CO2, electric cars are liable for zero annual Vehicle Excise Duty (VED) or ‘road tax’. This is another way to massively save costs, especially on vehicles with a list price of more than £40,000. At this price, a £335 surcharge applies to combustion-engined vehicles, added to the Standard Rate of £155 for an annual fee of £490.

For example, an electric Audi Q4 e-tron, priced at £40,035, is free from any VED charges in both the first and subsequent years of registration as it is considered a zero-emissions vehicle. However, a similarly sized £43,440 Q5 TDI emitting 164-174g/km of CO2 costs from £555 per year in VED in the first year of registration, then £490 for the next five years. 

Moving to smaller cars, a Renault Zoe costs zero per year in VED, whereas a petrol Renault Clio with 118-130g/km of emissions costs £180 in the first registration year and £155 per year thereafter.

The Next Green Car website has a very comprehensive list of VED rates. 

It’s not only private drivers that save money when driving an electric car. Company car drivers can also save when it comes to Benefit-in-Kind (BIK) taxation. As with VED, BIK rates favour greener cars, with lower CO2-emitting vehicles attracting a much cheaper BIK rate.

For example, a diesel-powered BMW 330d M Sport emits 131-139g/km of CO2, and has a BIK rate of 31 percent. The all-electric BMW i4 eDrive40 M Sport of a similar size is emissions-free, with a lower BIK rate of one percent for the same 2021-2022 period. However, it is more expensive to buy.

EV tax savings are likely to decline as these cars become more popular. The UK government Plug-In Car Grant – which offers discounts on electric cars – used to apply to all plug-in hybrid vehicles (PHEVS), too, but they are now excluded. 

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• Electric car insurance – is it cheaper?

As recently as 2019, EV insurance costs were traditionally more than those of combustion vehicles, but this is now starting to change.

The price and power of the vehicle, as well as the driver’s age and experience, now often have a larger impact on the price of insurance, rather than the power source it uses.

Read our comprehensive guide to fully understand electric car insurance, and find a dedicated electric vehicle insurance policy here.

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The electric motors, batteries and transmission of electric vehicles have many fewer moving parts than those of a petrol or diesel car, and this means you can save money, as they are cheaper to maintain and repair.

EV batteries also have long warranties – usually eight years – which tends to be more than the warranty for the car itself. 

Despite their relative simplicity versus a combustion car, EVs do still need regular servicing, though. As they are heavier, tyres and suspension parts may wear out more quickly. 

Read the RAC guide to EV maintenance, servicing and repairs, which details all you need to know about looking after an electric car. Watch a quick overview here as well:

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Depreciation is how much value a car loses over time. It’s one of the most significant costs of owning a car.

The rapid development of EV battery technology and – mostly unfounded – worries about battery degradation mean EV depreciation can be greater (i.e., they lose more money) than combustion models.

Leasing can help alleviate this, and is more suited to EVs than petrol or diesel vehicles as it insulates you from depreciation costs. However, it won’t be for everyone, and the benefits can depend on how long you plan to keep the vehicle.

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Aside from cheaper tax and maintenance, there are some other financial benefits to owning an electric car. 

For example, you can drive into the low-emission zones that are becoming commonplace in UK cities without charge. And you avoid paying the London Congestion Charge. You can view the latest changes here.

EV drivers may also benefit from free or subsidised parking, and can use bus lanes in some areas.

Cost of running an EV vs a petrol car (price from November 2021)

^{1 12,000 miles, charged at 16p/kwh}

^{2 12,000 miles, filled up at £147.3 per litre}

^{3 Cars under a year old: 2 x services, 2 x pollen filters and 2 x brake fluid change (if required)}

^{4 Cars less than a year old: 1 x oil service and 1 x oil and inspection service}

In summary, yes, you can save money on motoring if you drive an EV. Potentially cheaper to ‘fuel’ and tax, as well as to insure – if not to buy initially – electric vehicles can also save you cash when driving into some UK cities.