Will electric cars save you money?
The future is now and electric cars are here to stay. At least that’s the way it seems. Electric cars have seen a surge in popularity after a shaky start to life. The advancements in technology that come with electric cars these days make them more capable all-around than the first models. Combined with environmental issues receiving plenty of public attention it’s clear that electric cars are going be getting a lot more attention over the next few years. But, will electric cars save you money? With the incentives in place to encourage us over to the apparent green side, it would certainly seem that way on paper. In this article, we’ll delve a little deeper and discover the real answer to the question will electric cars save you money?
Up front costs of electric cars
Much like standard cars, there are different prices for different makes and models of electric car. At the moment, they range from around £14,000 for a Renault Zoe hatchback, a nippy electric car that’s popular with urban drivers, to over £100,000 for a top of the range Tesla. Europe’s best-selling electric car is the Nissan Leaf, which falls somewhere in the middle of the price spectrum – starting at £21,000.
Cost wise, there is a range of options but with a standard urban city car like the Toyota Aygo coming with a price tag of £8995 there’s a definite price gap between this and the equivalent Renault Zoe at £14,000. With the up front cost of buying electric being some £5,000 more expensive, I don’t think electric will take over the world yet.
That being said, a recent article in The Telegraph suggests that electric car prices are set to reduce by 2018. Bringing costs more in line with new petrol and diesel car prices. So will this see the popularity of electric cars rise even further in coming years? Well, that very much depends on if electric cars can save drivers money in the long run.
Why do electric cars cost more to buy?
The cost of an electric car is higher than its petrol or diesel counterpart because of the lithium batteries needed to fuel the vehicle. Lithium batteries are difficult to source which drives the price higher. As the popularity of electric cars grows, so will the demand for lithium batteries. The volume of purchases will drive producers to develop a cheaper lithium battery in order to meet the demand.
Grants available on electric cars
Currently, the only government grant available to help with the cost of purchasing an electric vehicle is the Diesel Scrappage Scheme. The Diesel Scrappage Scheme is designed for people who live in one of the most polluted areas of the Country and drive a diesel car. If this is you, then you could receive a £2,000 grant towards purchasing an electric vehicle when you scrap your current diesel car. It’s still in the early planning stages, but if the diesel scrappage scheme comes to fruition it could mean 15,000 diesel and older petrol cars are taken off the road and replaced with electric cars.
Grants available on electric car charging stations
Due to various political and social pressures for the UK to become greener, the government also offer financial assistance to install charging stations. The grant gives electric car owners 75% of the cost of installing a charging point at home. The grant is capped to a single charge point with a maximum grant amount of £500.
Eligibility requirements state that you must use an OLEV approved supplier (Office for Low Emission Vehicles) to make the grant application on your behalf. This reduces the cost to install a home charge unit down to £200-£400 depending on the size of unit needed.
By fitting a home-charging point you’ll reduce the stress of solely relying on finding public charging points near you.
Costs of running an electric car
To travel 10,000 miles in a petrol or diesel car you’ll pay approximately £1300 in fuel. To travel the same distance in an electric car would cost just £400. That’s a saving of £900. The exact numbers depend largely on the make and model of car in question. The size of the electric car battery and the electricity tariff you’re on play a big part in calculating an accurate figure.
OVO energy advises that you need to switch your mindset from pounds per litre to pence per kw hour. They give a handy comparison of the charging costs of the three most popular electric cars.
|Vehicle||Battery Size||kWh cost||Cost to charge||Miles per charge||Miles per £|
|Tesla s 100d||100||0.10||£10.00||335||33.5|
Will I save on tax?
Yes, if you drive an all electric vehicle which produces zero emissions then you are exempt from paying vehicle excise duty. Up until 2017 all hybrid cars were also exempt from car tax. However, from April 2017 hybrid cars to attract a rate of vehicle tax. The new shake up around car tax focuses on when you purchased the car and the car’s CO2 emissions. Electric cars bought and registered now will only have to pay car tax if they cost more than £40,000 to buy. Even then, the rate of vehicle tax is just £310 per annum.
Nissan Leaf vs Toyota Aygo
Comparing the Nissan Leaf to the Toyota Aygo when factoring in things like depreciation, fuel cost and road tax the Aygo still comes out on top for value for money. Our calculations tell us that over three years you’d need to do 25616 miles PER YEAR in the Nissan Leaf to break even.
On a lease basis, the cost difference is around £50 per month. Over 3 years the Nissan Leaf would cost £1800 more + VAT so £2160 total. To break even now you would need to do at least 24500 miles over 3 years to break even or 8166 miles a year. A bit more enticing!
In conclusion, electric cars see the benefit of some savings during the course of ownership. However, the upfront costs are higher to purchase an electric vehicle. In 2018 the cost of electric cars is expected to reduce so it will become even more cost effective.