'EVs are £700 a year cheaper to keep on the road than petrol cars,' says green think tank

Owning an electric vehicle (EV) instead of a petrol car could save drivers around £10,000 over 15 years, according to a green think tank.

Analysis from the non-profit organization Energy and Climate Intelligence Unit (ECIU) calculated that this could be the case save approximately €700 per year by using a vehicle that runs on electricity compared to a vehicle that is unleaded.

With an expected lifespan of 14 years for each vehicle, drivers of internal combustion engines (ICE) face a hefty 'gasoline premium', the report said.

The ECIU compared the ten best-selling petrol cars of 2023 – including household favorites such as the Vauxhall Corsa, Mini and Nissan Juke – with EV equivalents.

While the upfront cost of new electric cars is one of the main reasons why drivers are hesitant to switch from petrol, the green group says that once ongoing costs are taken into account, an electric car can be a financially smart option for many drivers .

However, the gap between a brand new petrol and its electric equivalent can be enormous.

For example, the new electric Opel Corsa (€33,730) costs around €12,000 more than its petrol equivalent (€21,655), which would offset the savings.

The price of fuel is the biggest additional cost of running a petrol car, but vehicle excise duty (VED) and maintenance also drive up the daily cost of ownership compared to an electric car, the company claimed.

That said, EV owners won't benefit from the VED exemption for much longer, with Chancellor Jeremy Hunt planning to introduce tax on zero-emission battery models from 2025 as part of efforts to recoup lost fuel duty revenue .

ECIU transport analyst Colin Walker said: 'With drivers hit with a £700 petrol premium, a switch to an electric car will deliver a quick return on the investment made.'

Industry insiders have also highlighted the importance of drivers thinking about how annual savings can add up over the life of the car, offsetting the sharply higher purchase costs of an electric car.

Rod Dennis, RAC spokesman, said: 'For many drivers, the idea of ​​considering the total cost of running a car over its lifetime, rather than just thinking about the initial cost, seems a foreign concept, especially for the majority of people. who buy used instead of new cars.

'But as this research shows, when you add up the numbers, electric vehicles can be so much cheaper to keep on the road, and of course there are also the huge environmental benefits of driving a car that has zero tailpipe emissions.'

When will electric car prices fall?

One of the biggest barriers to entry for potential EV buyers is the upfront cost, but upcoming changes in the EV market could help change this.

The government's mandate to produce zero-emission vehicles was written into law this week, requiring at least 22 percent of new cars sold by every manufacturer in Britain this year to be zero-emission.

The threshold will increase every year until it reaches 100 percent in 2035.

Higher sales of new electric cars will lead to a greater supply of used battery cars in the coming years, which – in theory – should drive down prices across the market.

And manufacturers are starting to launch cheaper new electric cars.

Citroen's e-C3 (from around £22,500) arrives later this year. It will join the likes of the award-winning MG 4 (£26,995) and BYD Dolphin (£26,195), both family-friendly packages.

Brands including Renault and Skoda have announced plans to launch new electric cars under €25,000 (£19,000) in the coming years.

Dacia will bring its first budget-friendly EV – the Spring – to the UK market later this year, Renault's upcoming Twingo could cost less than £17,000 and Volkswagen's ID.2 will be its cheapest battery model yet.

Advances in manufacturing will also reduce the purchase price of electric cars in the coming years.

This was predicted by investment bank Goldman Sachs Battery prices will drop by about 40 percent – partly due to a reduction in the price of raw materials – which can reduce costs passed on to consumers.