While electric cars have many benefits, such as being eco-friendly, extremely quiet and requiring less maintenance, one significant barrier to their widespread adoption remains their high cost.
Despite efforts to reduce the price of electric cars, they remain considerably more expensive than their petrol and diesel counterparts, which begs the question – why are electric cars so expensive?
In this blog post, we will explore the reasons why electric cars are still so expensive, what factors contribute to their high cost and whether this will change anytime soon.
The primary reason for the higher cost of electric cars compared to petrol or diesel vehicles is the expense of the battery, which represents a substantial portion of the EV’s cost. Although electric car battery costs have been falling in recent years, they are still a significant contributor to the overall cost of an electric car.
As with many innovative technologies, they tend to carry a premium price tag due to being produced in smaller quantities. Because the demand for electric cars is still relatively small, economies of scale are not yet in place to reduce costs.
Electric cars also use new technology that is still relatively unfamiliar to many manufacturers, which can increase production costs.
Finally, electric cars are not yet as widely available as petrol or diesel cars, so there is less competition among manufacturers. This can increase the total cost for consumers.
At present, there is a notable difference in pricing between petrol or diesel cars and electric cars. The Fiat 500 Electric carries a recommended retail price range of £26,435 to £34,195, whereas the Fiat 500 is priced from £16,790 to £18,290, which illustrates that new electric vehicles are more expensive to buy.
While it’s possible to lease a petrol or diesel Fiat 500 for under £200 a month, leasing an electric version typically costs over £300, indicating a significant difference in the price tag of electric vehicles.
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.
Currently, battery electric cars (BEVs) do not need to pay road tax. However, the UK government announced that zero-emission vehicles, including cars, vans, and motorcycles, will have to pay road tax beginning in April 2025.
Nevertheless, electric cars remain exempt from the Congestion Charge and the Ultra Low Emission Zone (ULEZ), resulting in further cost savings.
There is good news for those contemplating an electric vehicle for their business car. In 2023, electric vehicles have a 2% Benefit in Kind (BIK) rate. By selecting an electric vehicle, drivers are taxed on only 2% of the list price, in contrast to petrol or diesel models, which are taxed at 25% or higher. As such, switching to electric for a business car makes it a desirable option with a significant expense reduction.
In addition, numerous local councils offer incentives for electric vehicle owners, such as reduced-cost Residents’ Parking Permits or Green Vehicle Permits that enable free parking at shopping centres, train stations, and other locations. Owning an EV may also allow bus lane access and free use of charging stations. As offers differ from council to council, it is worth contacting your local authority to learn more.
The numerous incentives available for electric vehicles can lead to significantly reduced running costs, especially compared to internal combustion engine (ICE) vehicles.
The cost to charge an electric car varies depending on factors such as the type of charger and where you choose to charge.
If you use a smart home charger and charge during off-peak hours, you’ll get a discounted electricity rate due to the decreased demand, meaning you can charge for cheaper.
Many public chargers can be used free of charge. Read our blog to learn how to charge for free. Even public charging points that are not free to use are highly affordable and considerably less expensive than refuelling with petrol or diesel.
In addition, it’s possible to charge your vehicle for free during working hours if your employer offers workplace charging points.
As such, charging an electric vehicle is typically less expensive than filling up a petrol or diesel vehicle, especially if you utilise home charging during off-peak hours or have access to free charging stations.
However, the cost of charging an EV depends on several factors, including the cost of electricity in your area, the efficiency of your vehicle, and the type of charger you use.
According to GoCompare, insuring an electric car is usually more expensive than insuring a petrol or diesel car. This is because the specialised technology used in electric vehicles can be costly to repair or replace. Repairs may require specialised parts and mechanics, which can increase premiums.
However, as more insurers start covering electric vehicles, prices are likely to decrease. While premiums are generally higher for electric cars than traditional vehicles, this gap is shrinking, and prices are expected to continue to fall as more electric cars are introduced to the market.
Moreover, as we approach the UK government’s ban on new petrol or diesel cars, electric car insurance premiums are expected to continue to decrease to the point where they are lower than those of petrol and diesel cars.
Government grants are available for both electric vehicle chargers and the vehicles themselves.
In England, five government grants are currently available for the supply and installation of an electric car charger, with up to £350 available for some individuals living in domestic properties. You can read more about the current grants available for charging points here.
While the £3,500 grant for individuals purchasing an electric vehicle or plug-in hybrid has ended, grants are still available for specific EV types, such as vans, taxis, and motorcycles. You can find out more about these grants on the government website.
In the future, the increasing demand in the electric car market is expected to lead to a price drop.
Although the limited supply of lithium-ion batteries is currently restraining the market, the growing second-hand market for electric vehicles and the expected fall in battery prices provide hope for the future.
As EV uptake increases, the economies of scale will make it cheaper to manufacture EV components, including batteries, which are the most expensive component of an electric car.
Moreover, the UK government’s plan to phase out the sale of petrol and diesel cars by 2030 is expected to drive the growth of the EV market even further and bring prices down significantly, making them more comparable to petrol or diesel vehicles.
Purchasing an electric car can result in long-term cost savings if you can afford the upfront cost. In fact, over the course of their lifetime, EVs can be more cost-effective than traditional petrol or diesel vehicles due to reduced running, maintenance, and charging expenses.
In conclusion, while electric cars offer several benefits, such as being environmentally friendly, requiring less maintenance, and providing quiet driving, their high cost has been a significant barrier to their widespread adoption.
The cost of the battery remains a significant reason why electric cars are more expensive than petrol or diesel vehicles. However, despite the higher upfront cost, electric vehicles offer several advantages that can enable you to save money over the long run, such as reduced maintenance costs, lower running costs, and incentives provided by the government and local councils.
As battery costs continue to fall, economies of scale increase and more insurers cover electric vehicles; prices are expected to continue to decrease.
Therefore, electric cars may become more affordable and accessible to the average consumer.
One of the main upsides to buying an electric vehicle (EV) is that they’re a lot cheaper to run, with electricity generally being cheaper than both petrol and diesel.
As previously mentioned, one way to significantly save on an electric vehicle’s running costs is to charge at home during off-peak hours or opt for a home electric car charger with tariff integration.
If you are looking to get a smart home EV charger installed, give us a call at 03333 44 96 99, or fill in the contact form below.
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This type of electric charger has it's own cable to charge your car.
This type of electric charger requires a seperate cable to charge your car.
Spread over a 60 month period.
Tenants and homeowners are eligible for finance.
You decide the amount of months.
Minimum of £1000.
We will contact you to process the credit application. Approval is subject to application, financial circumstances and borrowing history. 13.9% APR representative. T&Cs apply.
Your order is not confirmed until your application has been approved.
We lay SWA cable laid at 600mm deep, with a protective cable warning tape laid 150mm above the cable. These are laid on a sand or sifted sand soil bed then backfilled.
We position overhead cables at a minimum height of 3.5m and are run along a catenary wire. The cable run should not be accessible to vehicles.
Our instant price is fixed if it falls within our standard installation package plus any additions that you have selected (extra cabling for example). This package covers the majority of homes in the UK. Before we undertake your installation we will carry out a digital survey to check that nothing has been missed. After reviewing the survey results some additional work may be required in order to complete your installation safely and to the required standards. If this is the case, we will contact you well before the installation date and advise the cost of any required work. You can then continue with your installation, or alternatively we will refund you in full if you do not want to proceed.
Included in our standard installation is :
• Fitting of a single phase charge point to a brick or plaster wall or other suitable permanent structure
• Up to 10 metres of cable, run and neatly clipped to the wall between the electricity supply meter / distribution board and the charge point.
• Routing of the cable through a drilled hole in a wall up to 500mm (20 inches) thick if this is needed.
• The fitting and testing of electrical connections and protections required for the charge point.
• An additional three way consumer unit, if required
• Installation of a Type A RCBO in an RCBO enclosure
• Up to 3 metres of plastic trunking to conceal interior wiring.
• An O-pen earth protection device if the charge point requires it. (This is NOT an earth rod)
• Up to 4 hours of labour from your installer to complete the work.
• Electrical testing of the whole installation.
• Handover and setup of the charge point and any app that may be needed.
Not included in our standard installation (additional work) :
• Where the installation requires additional cabling over and above the amount you have told us about.
• Upgrade/replacement of the main incoming supply fuse where the local DNO (eg Northern Powergrid) would need to attend site.
• If the charge point is to be mounted on a post/pedestal rather than an existing wall and where you have not selected a post as an extra cost option in your order.
• Installation of a charge point to a three phase supply.
• Where gas and water mains bonding (earthing) is not in place at your property. If this is not in place, additional work would be required before installation of the charge point.
• Any groundwork that has not been selected during the order process.
A Surge Protection Device is not included in our standard installation.
What else you need to know :
• On the day of installation, please ensure that the area around your consumer unit (fuse box), incoming electricity supply meter and proposed charge point location (including where the cable is expected to be run) is clear and free of obstructions.
• We will need your WiFi password as part of the installation process in order to connect your charge point to the internet. Please have this available for the installer. Details will not be kept.
• The charge point must be on your own designated off road parking.
• The charger will be fixed in line with current guidelines at a height where it cannot be hit by a vehicle.
• Our installers are not able to enter loft spaces; lift floorboards or flooring; take apart any furniture of work above a height of 2m. If you anticipate that any of this may be required, then please contact us and we can discuss in more detail and provide you with a quotation.
• Should there be extreme weather conditions our installers may not be able to continue with you installation if it is not safe to do so (for example flooding). They will always do their best to complete the work where they can.
If you have any questions then please contact our customer service team who will be happy to help. Please also read our terms and conditions.