Analysis carried out by LV= General Insurance (LV= GI) in partnership with consultant battery electrochemist Dr. Euan McTurk of Plug Life Consulting has found that the Nissan Leaf, MG5 Long Range Excite and the Mini Electric Level 1 are three of the best value electric cars for drivers considering going green.
LV’s ‘Electric Car Cost Index’ examined the purchase (outright ownership), financing (lease and PCP) and running costs (fuel/charging, maintenance, insurance, tax) for 13 popular electric car models and their petrol or diesel equivalents, to demonstrate the true cost of being an electric car driver for people considering making the switch.
Three of the 13 electric cars – Nissan Leaf, MG5 Long Range Excite and the Mini Electric Level 1 – work out cheaper whether bought outright, leased or via PCP. All 13 cars are cheaper than the equivalent petrol or diesel model based on buying the car upfront and keeping it for seven years, while seven of the 13 are cheaper across a four-year lease term and four are cheaper on a three-year PCP agreement.
The savings on electric cars are heavily driven by lower average annual running costs – £1,147.21 compared to £2,201.58 for a petrol or diesel car.
|Electric Car||Petrol/Diesel car||Total saving over 7 yr ownership (including residual value)||Total saving over 4yr lease||Total saving over 3yr PCP||Annual running cost savings||Monthly running cost savings|
|Nissan LEAF 40 kWH N-Connecta||Ford Focus 1.0 ecoboost 125 Zetec||£3,210.63||£2,080.92||£308.23||£945.65||£78.80|
|Tesla Model 3 Saloon Standard Plus 4dr Auto||BMW 320i M Sport 4dr Auto (Pro Pack)||£10,585.47||£4,976.11||-£3,128.57||£1,703.27||£141.94|
|VW ID.3 Life Pro Performance 62kWh 5dr Auto||VW Golf 8 Life 2.0 TDI 115PS 7-speed DSG 5dr||£2,417.82||-£3,306.96||-£1,347.00||£772.41||£64.37|
|Kia e-Niro 64kwh 4+5dr Auto||Kia Niro 1.6GDi Hybrid 4-5dr DCT||£1,718.96||-£677.99||-£2,937.41||£852.15||£71.01|
|Volkswagen e-UP 32kWh 5dr Auto||Volkswagen Up 65ps Up 5dr manual||£2,620.42||£1,918.33||-£3,602.67||£994.21||£82.85|
|MG ZS EV Trophy 51kWh||MG ZS Exclusive 5dr 1.5 VTI-tech||£2,137.65||-£1,038.80||-£6,022.73||£1,109.84||£92.49|
|Peugeot E-2008 GT 50kWh 5dr Auto (vs Peugeot)||Peugeot 2008 GT 1.2L PURETECH 103 S&S||£1,282.84||£3,070.05||-£983.62||£927.75||£77.31|
|Skoda Enyaq iV 80||Skoda Kodiaq SE 1.5 TSI 150 PS DSG||£5,812.63||-£3,747.38||-£2,331.52||£1,434.80||£119.57|
|Hyundai Ioniq 5 Ultimate 58kWh 170PS||Hyundai Tucson Ultimate 1.6 150PS Petrol 2WD Manual||£2,459.25||-£2,263.84||-£5,039.25||£1,007.46||£83.96|
|MG5 Long Range Excite||Skoda Octavia Estate SE 1.5 TSI 150 PS 6G Manual||£5,473.40||£2,445.27||£2,269.85||£1,016.79||£84.73|
|Fiat 500e Red||Fiat 500 Red||£586.16||£5,527.26||-£1,618.95||£734.49||£61.21|
|Mini Electric Level1||Mini 3dr Hatch Cooper S Classic||£6,225.48||£2,641.45||£308.97||£1,240.95||£103.41|
|Vauxhall Corsa-e SE PREMIUM (ELECTRIC 11KW)||Vauxhall Corsa 5dr SRI EDITION 1.2 (130PS)||£5,675.97||-£1,562.42||£2,118.74||£967.08||£80.59|
Purchasing an electric car
The purchase price for electric cars is still higher than equivalent petrol or diesel cars. For balance the study explored a range of models across the purchase spectrum, from entry level electric vehicles (EVs) like the Volkswagen e-UP (£22,585), Fiat 500e (£25,495) and Vauxhall Corsa-e (£25,805), all the way through to high-end cars such as the Tesla Model 3 (£42,990), Hyundai Ioniq 5 (£42,295) and the Skoda Enyaq iV 80 (£40,130)
Of the cars analysed the average cost of an EV was £32,683, just under £7,000 more than the average petrol or diesel car at £25,685. However in some cases the gap is closing – the Vauxhall Corsa-e is only £2,175 more expensive than its petrol equivalent, and the difference between the Mini Electric Level1 and Mini Hatch Cooper S Classic is now less than £5,000.
Thanks to the lower running costs, drivers who outright buy any of the 13 EVs analysed by LV= will recoup some of their initial outlay over the average ownership period of seven years, ranging from £586 on the Fiat 500e Red to over £10,500 for the Tesla Model 3. The average saving over seven years is £3,862.05, with 10 of the 13 cars saving over £2,000 during the ownership period, and the saving figure also factors in residual value – the price that the vehicle would sell for after seven years (assumes annual depreciation of 9.5%).
For many drivers that understandably are unable to buy the car outright, leasing is a much better option than taking out a PCP contract. Apart from the VW ID3, every car looked at is significantly cheaper to lease over a four year period than via a PCP on a three year contract, according to insights provided by vehicle leasing company CBVC. The monthly and annual prices on the table also factor in an upfront deposit, which on average is £3,189.72.
Only a handful of the EVs have cheaper annual lease costs than their petrol or diesel equivalents, including the Peugeot 2008 (£4,546 vs £4,562) and the Fiat 500 (£3,037 vs £3,833). However, taking into account the cheaper running costs, seven of the 13 cars analysed provide savings over a four year lease, ranging from £1,918 for the Volkswagen e-UP to £5,527 for the Fiat 500e. The average saving across all 13 cars on a four year lease is £774. Only four of the 13 cars recoup money over a three year PCP, with the MG5 Long Range Excite recouping the most at £2,270.
The savings EV drivers can make are driven by substantially cheaper running costs, which work out £1,054 cheaper on average annually vs driving a petrol or diesel car. This figure rises to £1,435 for the Skoda Enyaq iV vs its petrol equivalent, and to £1,703 on the Tesla Model 3 vs BMW 320i. Average annual maintenance for an EV, which includes a service and replacement tyres and brakes, is almost £200 cheaper (£304 vs £498), mainly because they have very few moving components, making them considerably less likely to break down as they age and much cheaper to maintain.
The biggest annual saving comes from charging the vehicle vs having to pay for petrol or diesel. On average EV drivers will pay just £467.40 to charge their car each year, based on driving 8,000 miles, while petrol and diesel drivers pay £1,199.40 to do the same mileage – a difference of £732. If drivers have an electricity tariff with a reduced off-peak overnight rate, then the annual cost of charging an EV is reduced to just £180.59.
The assumption is that electric cars are more expensive to insure but that’s not the case anymore. Insurance premiums are on average cheaper for the EVs analysed vs the petrol or diesel models – £297 vs £310. Insurance is cheaper on seven of the 13 vehicle pairings, with some cars including the ID.3 and Vauxhall Corsa-e substantially cheaper than their ICE equivalents, at 22 and 33% respectively
The other significant saving for electric car drivers comes from not having to pay tax on the vehicle, which for petrol and drivers is on average £193.68 annually. Over a seven-year ownership this equates to £1,355.76.
Gill Nowell, Head of EV at LV= General Insurance, commented: “Despite the upfront sticker price of an electric car being higher than the equivalent petrol or diesel car, it pays to look at all the costs involved. Even with escalating fuel and energy costs, if people can afford to make the switch to an electric car, either new or second hand, then charging up with energy at home rather than filling up at a petrol station is far cheaper – and better for the environment and our local air quality.”
Consultant Battery Electrochemist Dr Euan McTurk of Plug Life Consulting, commented: ”With petrol and diesel prices going through the roof, this is a timely reminder that electric cars can save money as well as emissions. Higher mileage drivers will save even more money by going electric, so if you do more than 8,000 miles per year, you’ll recoup your outlay much faster, and your savings will be even higher. Plus, because electric vehicles are so mechanically reliable, as they get older, they’ll spend much more time on the road and much less time in the garage than a petrol or diesel car of the same age, saving you considerable time and money – this bodes well for people looking to buy a second hand EV.”
Image courtesy of Shutterstock.