Are electric cars cheaper to run?

The cost of running any vehicle will vary depending on factors like the upfront purchase price, fuel efficiency, ongoing maintenance and so on. You’ll also face external costs like car insurance, road tax and other necessities.

With all of that in mind, are electric cars cheaper to run than internal combustion engine (ICE) vehicles? The common conception is that EVs are cheaper, but what evidence supports this belief?

In this guide, we’ll look at some of the main running costs of different types of vehicles, focusing on how well electric cars perform in each area.

What Are The Running Costs Of Electric Cars?

Before we get into it, let’s be clear about what we mean by the running costs of electric cars. While the initial purchase price is a major part of the total lifetime cost, it’s a one-off expense.

Running costs are the kinds of expenses you can expect to encounter repeatedly during your ownership. Some of these are routine, such as the cost of petrol, diesel or (for a full-battery EV) electricity to charge the car back up after a drive.

There are also some unpredictable running costs associated with cars, and these include repairs and maintenance on top of the annual service or MOT. By combining the routine and unplanned expenses, you can figure roughly how much it will cost you to run the vehicle in a typical year.

Most Common Running Costs For Electric Cars

So, what are some of the expected running costs for electric cars? Let’s take a look at the main examples:

Charging The Battery

Just as petrol or diesel is one of the biggest ongoing expenses of ICE vehicles, charging your EV is the running cost you’ll probably encounter most often, so it’s also one good place to make savings.

The location where you recharge can have a big impact on cost. Superfast privately operated charging points will give you the fastest and biggest boost in the remaining range, but are among the most expensive ways to boost your battery.

Charging at home can be very economical. Electricity suppliers may offer you a discount if you drive an EV, while some offer dual-rate tariffs with cheaper energy at night when you charge your car.

In general, charging an electric car is cheaper than putting the equivalent miles’ worth of fuel into an ICE vehicle, especially during the political upheaval in oil-producing countries. So this is one running cost where EVs almost always come out on top.

MOT Test

There’s not much difference between EVs and ICEs in terms of MOT tests – your EV will need to pass an MOT test annually once it reaches three years old. However, an EV has no emission test, so it can’t fail its test due to exhaust fumes.

Because EVs have fewer moving parts, there’s generally less to go wrong with them, and issues that do arise are often software-related rather than hardware faults. All of this means that with some luck, you should be able to avoid unexpected repair costs arising from a failed MOT.

Road Tax

Zero-emission EVs are exempt from paying vehicle tax (commonly called road tax) and are also exempt from the £355 premium road tax charged on most other vehicles worth over £40,000.

This means that the top electric cars and new models on the market can be significantly cheaper to run, in terms of road tax alone. It’s worth knowing that the rules are different for hybrid electric vehicles (HEVs) and other ‘alternative fuels’, so go for a pure BEV if you want to make the biggest savings here.

Cost Of Electric Car Insurance

While it’s not a running cost like charging your battery or passing your MOT, you’ll still need to cover the cost of electric car insurance before you can legally hit the roads. According to the RAC, electric car insurance costs more than ICE insurance on average, but there’s more to this than meets the eye.

Because electric cars are still much newer than ICEs, so the ‘average’ EV insurance policy is not an accurate comparison. In general, EV car insurance applies to relatively new, high-value vehicles – so it’s not surprising that it appears to cost more.

In fact, significant progress is being made toward insurers all but ignoring the fuel type, and basing car insurance premiums on the vehicle’s power and the driver’s experience. Some insurers are also launching specifically EV-tailored policies with features like roadside recovery if you run out of battery charge.

Like MOTs, this is one area where the rules are broadly the same for ICEs and EVs alike, so if you have a no-claims bonus and can show you’re a safe driver, there are savings to be made across the board.

Cost Of Running Repairs

So what about those unplanned expenses – what if your EV fails to start on a cold winter morning, or fails its MOT? It all depends on what goes wrong. Breakdown cover might be enough to get your back up and running without a callout fee or insurance excess to pay.

According to research by car insurance provider LV= the average annual cost to maintain an electric car is around £300, whereas for an ICE it’s much higher at nearly £500. This covers items like a general service, new brakes and new tyres, but on ICEs there are also all the other moving parts to service and maintain.

Because of this, LV= found that three out of 13 of the top electric car models on the market (the Nissan Leaf, MG5 Long Range Excite and MINI Electric Level 1) were actually cheaper to lease, buy, or purchase via PCP than their ICE equivalents.

But all 13 were cheaper to run over a period of seven years, thanks to the lower maintenance expenses and the generally lower running costs. The more you drive, the more you save – so if you cover long distances for work, or even for pleasure, electric car running costs should be significantly lower over time.

Its worth remembering that all lease vehicles come with the manufacturer’s warranty, and if you including a maintenance package on your lease electric car any routine servicing and maintenance, including any applicable MOTs during the duration of the lease, will be covered with one simply monthly payment.