Energy and Climate Intelligence Unit Suggests EVs Offer Quick Return on Investment for Drivers

New analysis by the Energy and Climate Intelligence Unit (ECIU) has revealed that new petrol cars could cost their owners £700 more per year to run compared to electric vehicles (EVs). The findings, based on the top-selling petrol models such as the Vauxhall Corsa, Mini, and Nissan Juke, suggest that over a 14-year lifespan, the difference in running costs could accumulate to a “petrol premium” of approximately £10,000.

The study compared fuel costs, which are higher for petrol vehicles, with the lower costs of charging electric cars. Other factors considered included vehicle excise duty and servicing costs. Although electric cars generally have a higher upfront cost, the ECIU points out that the long-term savings from lower running costs, combined with falling battery prices, make EVs a more affordable option over time.

Goldman Sachs predicts a 40% reduction in battery prices between 2022 and 2025, which would further narrow the price gap between petrol and electric cars, encouraging more drivers to make the switch. Under the UK Government’s zero-emission vehicle mandate, 22% of new cars sold next year must be zero-emission, with that figure rising annually until it reaches 100% by 2035.

ECIU transport analyst Colin Walker commented that despite the initial higher cost of EVs, “a switch to an EV will see a quick return on the investment made.” He also highlighted that the growth of the second-hand EV market is crucial for making electric cars more accessible to families.

Rod Dennis from the RAC emphasised the importance of considering the total cost of car ownership, not just the upfront purchase price. He also advocated for government measures to make electric cars more affordable, including the reintroduction of the plug-in car grant and reduced VAT on public chargers.

In another sign of EVs’ growing reliability, the AA reported this week that the number of breakdowns caused by running out of charge has dropped significantly. Just 2.3% of EV callouts in the year to October were related to battery power, a significant decrease from 8.3% in 2015. This trend, the AA suggests, signals the end of “range anxiety” for most EV drivers.