See all Motoring AdviceWe all know by now that, sooner or later, we’re going to have to make the switch from cars that run on internal combustion (e.g. petrol or diesel) to ones which are propelled by electric power.
But for those looking to make the move earlier, how do the costs of running an electric vehicle (EV) truly stack up against one with an internal combustion engine (ICE)? Is it as simple as saying electricity is cheaper than petrol?
That’s what we’re here to tell you. In order to fully tot up the expenditure of buying an electric vehicle, there are different financial aspects to consider. Here, we’ll look at the broad strokes in the main, rather than getting down to the nitty-gritty of detailed figures, because there are so many variables – the price of petrol/diesel and electricity goes up and down weekly, you might get a really good finance deal on a new electric car which mitigates the cost, and so on.
Purchase prices
There is a general belief that EVs are more expensive than their ICE counterparts, but due to the way our Vehicle Registration Tax (VRT) benefits cars with zero CO2 emissions, this isn’t always the case. So while a Peugeot E-208, for example, is around 20 per cent more expensive than a similar-spec petrol model, a BMW i4 can be had for less than the 4 Series Gran Coupe.
It will depend on exact engine spec versus electric motor power, but make sure you do a comparison with a similar ICE vehicle in your chosen manufacturer’s range to give you an idea of whether the EV you fancy is better value or not. Also remember that manufacturers want to see you make the switch to electric cars, so PCP deals might give a more favourable monthly rate for an EV than a comparable ICE model.
Insurance costs
At present, EVs do tend to cost more to insure than equivalent ICE vehicles, but the gap in premiums is closing all the time. The reason for the inflated insurance on the EVs is down to the relative newness of their propulsion technology – because modern-day EVs have only been around for about a decade or so, and because they are still outnumbered by more traditional ICE cars on the roads, there isn’t as big an aftermarket for parts, making them harder to get hold of. Also, specialist mechanics need to work on EVs, another reason the premiums are inflated.
However, as more and more people switch to using EVs, the costs of insuring them will soon equalise as a greater spare-parts market grows, and more and more mechanics and garages become capable of maintaining them. Get a quote for the EV you want, then try a comparison with an ICE vehicle of similar spec, to see just how much more expensive the electric car is.
Taxes
This is where the EV starts to fight back. As all of our automotive tax laws are based on CO2 emissions, punishing vehicles with higher outputs, then EVs are in the lowest brackets for all significant taxes as a result of the fact they officially emit 0g/km. So for motor tax, you will pay a flat rate of €120 a year, whereas a relatively clean petrol or diesel car that emits more than 100g/km will be paying €180. If you want a high-performance EV, then to get similar power from an ICE vehicle would probably mean CO2 outputs of more than 200g/km, or even 225g/km. In which case, you’ll be paying either €1,250 or €2,400 per annum respectively – a huge difference to €120.
We’ve already touched on VRT, which is lower for EVs – and is the reason their purchase prices can often be cheaper here than for the equivalent ICE model. It’s set at just seven per cent of the open market selling price (OMSP) for vehicles emitting 0-50g/km, whereas it more than doubles to 14.25 per cent for a frugal ICE car (111-115g/km). Again, if you want powerful EV-like performance from an ICE car, you’ll likely have more than 191g/km coming out of the tailpipes, in which case the VRT rises to a huge 37 per cent of the OMSP, hence why performance cars are so expensive here.
EVs are also exempt from the NOx levy and their owners further benefit from better benefit-in-kind (BIK) tax rates if they’re used as a company car. As vehicles in category A, they have the lowest BIK percentages of 9-22.5 per cent, depending on your annual mileage. Any pure ICE car, most likely with a CO2 output of more than 99g/km, would be in at least category C (12-30 per cent BIK).
Fuel costs
This is the main area where you need to carefully do your sums, because – if you charge an EV correctly on the right connection – you could end up much better off than running an ICE car. However, that is dependent on lots of (or all) home charging, because public networks command much higher prices per kilowatt-hour (kWh) for their electricity.
According to the AA, at the time of writing (December 2023), the average fuel prices for petrol and diesel in Ireland both sat at €1.72 per litre. Typically, DC public networks in Ireland charge around €0.70-€0.75 per kWh, while the average domestic unit cost in the country is €0.43 per kWh (as of October 2023).
The long and short of this is that, no matter what size EV you want, how big its battery pack is, or how much performance you require from it, you will be much better off charging it regularly at home than you will be using the public charging network. It might be the determining factor which makes an EV cheaper to own and run overall across a three-year period, against an equivalent ICE model.
Using the Opel Astra as an example, the company sells the 1.2-litre 130hp turbocharged petrol auto in GS specification for €38,695. It does 0-100km/h in 9.7 seconds, has an official mpg rating of 50.4 and a 52-litre fuel tank. The Astra Electric, meanwhile, produces 156hp, costs €42,543 as a GS, does 0-100km/h in 9.2 seconds and officially goes up to 415km on a single charge of its 51kWh (usable) battery pack.
It would cost €86 to fill the 1.2’s tank for a theoretical maximum range of 929km, therefore costing around €0.09/km. On a DC charger at €0.75/kWh, charging the Astra Electric’s battery completely (not ideal on a rapid charger, admittedly) would cost €38.25 for 415km, working out at €0.09/km – which is no cheaper. But on a home charger at €0.43, a complete battery top-up would mean just €0.05/km, slightly more than half the cost of the Astra petrol. If you could run it like this permanently, you would soon recoup the additional €3,848 purchase price of the electric model in saved energy costs alone.
Maintenance
This is another major plus point for EVs. Because they do not have internal combustion engines, when it comes to service time they do not require new oil, air and fuel filters, and they don’t need replacement spark plugs either. They also don’t have traditional gearboxes, which also need upkeep on ICE vehicles, or other items such as clutches and exhausts which can require repair or replacement. So while EVs will still need servicing from time to time, the maintenance bills involved with them are much lower – up to a third less, according to various sources in the garage booking trade.
That said, there are also fewer garages with trained EV technicians operating in them at the moment, although that situation will change as more electric cars hit the roads in the years to come.