Cars are money sinks: the second biggest purchase most people will ever make also requires spending large amounts just to keep them on the road. It is no surprise, then, that claims that electric cars will add to the bills have alarmed drivers around the world.
Our EV mythbusters series is examining claims such as this in detail. So far we have looked at fires in electric cars, mining for battery materials and range anxiety.
This article asks: are electric cars too expensive for people to switch away from petrol and diesel?
The claim
In September the UK prime minister, Rishi Sunak, delayed a ban on sales of new petrol and diesel cars to 2035 in part “because the upfront cost is still high – especially for households struggling with the cost of living”.
Across the world a wave of reactionary politicians have opposed electric cars, and cost has been a key factor in their complaints. In the US, Donald Trump has also attacked electric cars as “too expensive”, and has played up concerns about “range anxiety”.
In France, National Rally’s Marine Le Pen has set herself against electric cars, arguing that they would become a luxury product out of reach of Europe’s poorest.
The science
Any cost comparison between electric and internal combustion engine cars needs to take into account the upfront “sticker” cost of actually buying the car, and then the costs of running and maintaining it over its lifetime until it is sold or scrapped.
On upfront cost, electric cars are on average more expensive – in part because no manufacturer has produced a genuinely affordable mass-market electric vehicle. However, that is changing as manufacturers start making them at scale, which pushes down costs.
Bloomberg New Energy Finance predicts that electric SUVs in Europe will hit price parity with petrol equivalents as early as 2025, but the US will be three years behind because of a preference for larger batteries. Battery costs themselves fell by 14% over the past year, the consultancy said.
Data from Auto Trader, a UK car sales website, suggests that price parity is already here for some secondhand electric models versus their closest internal combustion engine equivalent. In September 2022 a three-year-old Renault Clio (with a petrol engine) was £7,000 cheaper than a three-year-old electric Renault Zoe; in November there was no price gap. In the same period a Jaguar F-Pace started out £13,000 cheaper than an electric Jaguar I-Pace but now the latter is £4,000 cheaper.
But on the total cost of ownership, it already appears to make sense for most people to switch. The UK government’s authoritative Climate Change Committee said in October: “Electric vehicles will be significantly cheaper than petrol and diesel vehicles to own and operate over their lifetimes, so any undermining of their rollout will ultimately increase costs.”
There are two main reasons for this. First, EVs have far fewer moving parts, which reduces the need for costly maintenance: no oil changes, air filters, fanbelts, gearboxes to go wrong. Second, energy costs are lower because electric motors are much, much more efficient at converting stored energy into motion.
“When I look at the price of petrol and diesel, to be honest, it sends a shiver down my spine,” said Edmund King, an electric car driver and the president of the AA, a UK breakdown service. The AA’s October UK figures show that petrol costs well over double home charging per mile.
Charging
Each country is different. In the US, costs for gas are generally lower than petrol in Europe because of much lower taxes. Yet even then, electric cars are “very competitive” against combustion engines, according to Austin Shivers, an automotive engineer at the American Automobile Association.
The AAA says that an average electric car will end up costing 67 cents a mile when taking everything from purchase to eventual sale (including depreciation) into account. That makes it more expensive than an average hybrid or the smallest SUVs at about 60 and 65 cents apiece but cheaper than larger sedans or SUVs at 74 or 80 cents – or the expensive pickup trucks beloved of American buyers that cost more than a dollar a mile.
For mostly urban drivers in cities such as Los Angeles, it “makes a lot of sense” financially but it is another calculation for Texas highway drivers, Shivers said. “It’s going to be very person-specific because everybody’s case is different,” he added.
However, there is a big disparity between the cost of charging slowly at home and at public rapid chargers. That has raised serious concerns that the transition could cost more for poorer households if the on-street charging network is not widespread where they live.
Any caveats?
Prices are very tricky to predict with any accuracy, and there are a lot of variables. One that has reared its head in recent months in the UK is insurance: the comparison website Confused.com said average EV premiums rose by 72% in the year to October, compared with 29% for petrol and diesel cars – although typically not enough in most cases to outweigh other, cheaper costs.
Insurers are not exactly forthcoming about the reasons for higher premiums but some suggested issues are that replacement parts and the mechanics to fit them are harder to find, and there are fewer trained mechanics. Another issue may be that insurers fear relatively minor collisions could write off expensive batteries. Euan McTurk, a battery electrochemist who runs Plug Life Consulting, said he believed insurers’ battery concerns would diminish as they gained more knowledge of the limited circumstances when car batteries need to be replaced.
The cost of refuelling will undoubtedly change as well. The price of electricity is still partly linked to fossil fuel prices, so could rise or fall in the future. Politicians in Europe know they will eventually have to impose taxes on electricity (or else raise income taxes) to fill the void left as duty from fossil fuel falls.
The verdict
Analysts such as Bloomberg New Energy Finance and the Climate Change Committee are clear that most electric cars are already cheaper over their lifetime than petrol or diesel.
Erin Baker, the editorial director at Auto Trader, said: “In the long term, electric vehicles can save consumers money, and it’s vital drivers know this. We’re not saying this will be an easy transition but for most people it will be worth it financially.”
New cars are expensive across the board but electric cars are now at or approaching the levels of their petrol equivalents. Nevertheless, a high upfront cost is still a real barrier for car buyers. Lower battery prices and the growing secondhand market should eventually help.
