How much do electric cars cost to run? EV running costs explained

Beyond electric vehicles’ eco-friendly appeal, one of the most enticing aspects of EVs is their potential to reduce costs when compared to traditional petrol and diesel powered cars.

However, many potential buyers are still unsure about the overall running costs of an electric vehicle compared to a petrol or diesel car.

In this blog, we’ll break down all the expenses of driving an electric car and answer the question – How much does it cost to run an electric car? 

How much does it cost to charge an electric car?

Electric car charging costs

The cost of charging an electric car depends on several factors, such as the size of the car’s battery, the electricity tariff, and the charging method used. We will discuss how much it costs to charge your electric vehicle using various methods and explore the different electricity tariffs available to reduce the costs of charging at home.

Cost of charging an EV in public

The cost of charging an electric vehicle (EV) on public charging networks can fluctuate significantly, and these prices are rising because of the ongoing challenges in the energy market.

In July 2023, the weighted mean cost for charging an electric vehicle at public charging stations stood at 51 pence per kilowatt-hour (kWh) for slow/fast chargers and 76 pence per kWh for rapid/ultra-rapid chargers. This translates to approximately 14 pence per mile and 21 pence per mile.

Some networks also offer subscription plans, such as BP Pulse, where you pay a monthly fee in exchange for discounted charging rates. These options provide flexibility, especially when you’re on long journeys and need to charge your electric car on the go.

However, some public chargers may offer free charging. You can use tools such as Zap-Map to find these.

Cost of charging an electric car at home

Charging an electric car at home is generally cheaper than using public charge points.

Many electric vehicle (EV) owners primarily charge their vehicles at home, benefiting from the current energy price cap of approximately 30 pence per kilowatt-hour (kWh), which will drop to 27.35p kWh on 1 October 2023.

To demonstrate how much money you can save by charging your vehicle at home, charging a VW e-up! fully at 30p per kilowatt-hour would provide enough power for about 151 miles. This translates to roughly 7.4p per mile and a total cost of £11. In comparison, driving the same distance in an average petrol or diesel car would cost around £22.70, resulting in a substantial saving of £11.60 when using the e-up!

Moreover, installing solar panels or choosing a specific EV energy tariff can help lower the costs of charging an electric vehicle at home.

For home charging, it’s recommended to use a dedicated 7kW home chargepoint, which typically costs around £1000, but there are £350 grants available for some EV owners. If you are looking to get a home chargepoint installed, view our range of market-leading chargers.

Cost of charging an EV at work

If your employer provides workplace charging for electric vehicles, it can be a convenient option. However, it’s important to be aware that there may be associated costs. While some companies offer free charging as a workplace benefit, others have implemented various pricing structures.

The expenses you incur can fluctuate significantly, depending on factors such as your employer’s policies, the type of charging equipment available, and your usage patterns. Some businesses may charge a flat fee per hour of charging, while others may bill you based on the amount of electricity consumed. Additionally, membership fees might be involved if your workplace is part of a more extensive charging network.

The cost of workplace charging varies but is typically comparable to public charging unless your employer offers it for free.

Electricity tariff 

The electricity tariff you are on significantly determines the cost of running an electric car. Many energy suppliers now offer dedicated EV tariffs, which allow you to charge your vehicle at very low rates.

Octopus Energy offers the Intelligent tariff that allows you to charge at an off-peak rate of 7.5p per kWh. However, you need a compatible EV or an Ohme charger to take advantage of this tariff.

British Gas also offers the Electric Driver Tariff, which enables you to charge at 9.4p per kWh between 12 am-5 am. This tariff works with all charge points and electric vehicles, unlike Octopus Energy.

Many EV tariffs are now available, so shop around using a comparison tool and find the cheapest electricity prices.

Additional expenses of owning an electric car

Insurance costs

Electric cars typically have slightly higher insurance costs than diesel or petrol cars because of their high upfront cost and the expensive nature of repairing or replacing their unique technology, such as lithium-ion car batteries.

According to NimbleFins, the average cost of EV car insurance is around £654. However, insurance premiums vary significantly between cars, with quotes ranging from approximately £400 to well over £1,000 per year.

Nevertheless, as electric cars gain popularity, insurance expertise and options are growing, reducing electric car insurance costs.

Maintenance costs

Electric cars have fewer moving parts, don’t need oil changes, and have regenerative braking, which can reduce wear and tear. As a result, electric vehicles require less regular maintenance. This can lead to cost savings throughout the vehicle’s lifespan, compared to petrol and diesel vehicles.

Electric car tax costs (BIK, road tax)

In 2023, electric cars in the UK are not required to pay road tax (Vehicle Excise Duty) and are not subject to the expensive car supplement tax. Read our blog if you would like to find out more about this.

Benefit in Kind (BIK) taxation on a company car is lower for electric cars than hybrid cars, and the cost saving is even more significant when compared to regular petrol and diesel cars. In the next two financial years, 2023/2024 and 2024/2025, electric car tax rates are only 2%. But it will gradually increase by 1% each year, and by the 2027/2028 financial year, it will be 5%.

Government grants and schemes

Grants for charging infrastructure

In 2023, certain electric vehicle drivers who meet specific requirements can get a government grant that reduces the cost of getting a home electric vehicle charger by £350.

If you rent any residential property or own a flat, you can claim £350 towards installing a home charger. (You also need off-street parking and must own an eligible electric or hybrid vehicle).

If you run a business from your home and it’s officially registered there (as shown on your incorporation or VAT certificate), you can claim £350 towards getting a home charge point. You’ll also need designated off-street parking and an eligible electric or hybrid vehicle.

Grants for electric cars

The Plug-in Grant used to offer a reduction on the cost of new low-emission cars. However, starting June 2022, the Plug-In car grant doesn’t cover electric vehicles but still offers a discount on low-emission vans, motorcycles, and other eligible vehicles.

Are electric cars cheaper to run than petrol or diesel?

Charging an electric vehicle (EV) will increase your energy bill considerably. However, your potential savings will be significantly greater since you won’t be buying petrol or diesel, which is generally more expensive than charging at home or using public charging points.

Electric cars typically have fewer maintenance costs, and currently, EV drivers pay less tax than those with a petrol or diesel vehicle, which can further reduce costs.

Although insurance may be slightly higher for electric cars than petrol and diesel vehicles, the difference isn’t substantial, and prices will likely fall in the upcoming years.

As such, electric car running costs are likely to be cheaper than a petrol or diesel vehicle.

Other cost-saving benefits of an electric car

Free parking

Many local councils provide free parking for electric vehicles (EVs) in council-owned car parks and on-street parking. This could result in significant cost savings over time. For example, Sheffield City Council offer a Green parking permit that allows free city centre parking for Ultra Low Emission Vehicles (ULEVs) that meet specified criteria.

No congestion charge

In London, electric vehicles currently enjoy an exemption from the Congestion Charge. If you would like more information, read our blog.

Exemption from the Ultra Low Emission Zone

If you drive an electric vehicle in London, you are also exempt from the Ultra Low Emission Zone charges. This means that every time you drive within the Ultra Low Emission Zone (ULEZ), you will save the daily fee of £12.50.

Conclusion

In conclusion, when considering the overall cost of running an electric vehicle compared to a traditional petrol or diesel car, several key factors come into play:

• Charging Costs: The cost to charge your car depends on various factors, including your vehicle’s battery size, electricity tariff, and charging method. Charging at home is typically more cost-effective than using public charging networks, especially when utilising an EV-specific electricity tariff, which can reduce your electricity cost.
• Additional Expenses: Electric cars may have slightly higher insurance premiums because of their initial cost and unique technology. However, as these vehicles become more common, insurance costs are expected to decrease. Moreover, electric cars require less maintenance, resulting in long-term cost savings.
• Tax Benefits: In the UK, electric cars are currently exempt from road tax and the expensive car supplement. Company car tax (Benefit In Kind) is also lower for electric vehicles, providing financial advantages for their owners until at least 2025.
• Government Grants: Various government grants and schemes are available to reduce the cost of electric car ownership, including grants for installing a home EV charging point.
• Cost-Saving Benefits: Electric car owners may benefit from free parking in some areas and exemptions from congestion and Ultra Low Emission Zone charges in certain cities, such as London. These perks can contribute to long-term cost savings.

In summary, while there may be initial costs associated with buying an electric car and charging infrastructure, the long-term savings in charging, maintenance, and potential tax benefits make electric vehicles a cost-effective and environmentally friendly choice for many consumers.

Installing a dedicated EV charger at your home is a great way to reduce the cost of running an EV. With engineers nationwide, we can install home electric vehicle chargers across the UK in as little as ten working days.

For more information about installing an EV charger at your home, please call us at 03333 44 96 99 or fill in the contact form below. Our lines are open seven days a week, including bank holidays. View our range of market-leading EV chargers here. 

Follow us on Facebook, Instagram, Twitter, and LinkedIn to keep up to date with all things electric.

Related posts:

• How far can an electric car go on one charge?
• Do new builds have to have electric car chargers?
• Can you get a grant for an electric car charger?
• VAT on electric cars explained

Contact Us Now

Enter your information below, and one of our expert advisors will be in touch shortly.