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Revealed: a guide to the cost of electric cars

Breaking down the cost of an electric car | OVO Energy

Yes, the upfront cost may seem pricey, but the savviest of motorheads will tell you that electric cars can save you money in the long run1

What do electric cars cost to buy?

Looking to buy an electric car? Well, first you need to decide how much you’re prepared to pay upfront. The bad news is that the initial cost of an electric car will sting you more than an equivalent petrol or diesel model, but it's important to remember that:

  • Electric cars are exempt from road tax.
    You’ll only pay a fee if you opt for a pricier model that exceeds £30,000.
  • The running costs of electric cars are much, much lower2
    Primarily because they’re cheap to charge (and you’ll never have to go a petrol station again). You’ll pay about ¼ of the cost per mile driven.
  • If you live in London, you’ll avoid the congestion charge.
    You’ll enjoy free parking spaces in some pay-and-display car parks, and car parks all over the country offer free charging for electric cars.

At the moment, they range from roughly £14,0003 for a Renault Zoe hatchback, a nippy electric car that’s popular with urban drivers, to over £100,0004 for a top of the range Tesla. To date, Europe’s best-selling electric car is the Nissan Leaf5, which is manufactured in the UK, and falls somewhere in the middle of the price spectrum – starting at £21,0006.

How do I get a government grant to buy one? 

The UK government’s keen to promote electric cars wherever they can, as part of their aim to reduce carbon emissions. That’s why you could get up to £4,500 to help you buy one. You can find about more about government grants for electric cars, here.

How do I get a grant for an electric car home-charging point?

Once you’ve bought an electric car, the government will also help you pay 75% of the cost of installing a charging point at home. It’s capped at £500, and only covers a single charge point, but that’s perfectly ok for those of us with only one or two vehicles to charge. And, by getting a home-charging point fitted you won’t be solely reliant on finding public charging points near you.  
 
To be eligible for the grant, you’ll need to use an OLEV (Office for Low Emission Vehicles) approved supplier, who will make a claim on your behalf. With the grant included, you’re looking at a couple of hundred pounds to install a 3kW unit, or £400 to install a 7kW unit, depending on which supplier you choose. Find out more about the scheme, here.

And what about the diesel scrappage scheme? 

If you’ve got a diesel vehicle, and you live in one of the most polluted areas of the country, you could receive a helpful £2,000 handout to help you buy a greener vehicle. It’s all part of the government’s new draft clean air plan, which aims to reduce emissions of toxic fumes in some of our most polluted towns and cities. It’s still in the early planning stages, but if the diesel scrappage scheme is actually implemented it could mean 15,000 diesel and older petrol cars are taken off the road and replaced with electric cars. 
 
Environmentalists argue that the diesel scrappage scheme doesn’t go far enough to address the impact of air pollution, which causes – according to estimates – over 40,000 premature deaths in the UK every year7. But the move has been welcomed by the Society of Motor Manufacturers and Traders. So if you’ve got a diesel vehicle and you’re looking to buy an electric car, keep your eyes peeled for more information. 

How much can you save with an electric car?

Get an electric vehicle and you’ll pay around £400 to travel 10,000 miles8, compared to roughly £1,300 for petrol or diesel. That’s a pretty smart saving. Especially when you consider that you can also pay back the extra cost of a new electric car in less than 9 years. That said, the exact cost of charging your electric car will be dependent on things like:

  • The size of your car battery.
  • The model of your car.
  • The electricity tariff you’re on. 

To crunch the numbers, you’ll need to switch your mindset from thinking ‘pounds per litre’ to ‘pence per kilowatt hour’. For instance, here’s the difference in the charging cost based on three of the most well-known electric cars – from the more powerful Tesla model, down to the Renault Zoe hatchback. 

Vehicle Battery size kWh cost Cost to charge Miles per charge Miles per £
Tesla s 100d 100 0.10 £10.00 335 33.5
Nissan Leaf 30 0.10 £3.00 155 51.6
Renault Zoe 22 0.10 £2.20 96 43.63

 

Which electricity tariff is best if I buy an electric car? 

Lots of people with electric cars believe they’re better on an off-peak tariff, known as Economy 7, which offers a cheaper rate at ‘off-peak’ times (usually night times). Whether or not this works for you depends on:

  • When you plan to charge your car battery. 
  • How often you’ll be charging it at home (rather than at a public charging station). 
  • How much electricity you use at home (eg. if your estimated annual consumption is too high, switching to Economy 7 may not be a good idea). 
  • The availability of public charging stations near you. 

Most public charging stations found in supermarkets and car parks tend to be free, but Rapid charging points (that tend to be at motorway service stations) can cost £6.50 for a 30 minute charge9. Read more about how to charge an electric car, here

Here at OVO, we have just launched our new EV Everywhere tariff, which we have specifically designed for the needs of electric car owners, and which - with fixed energy prices for two years, 100% renewable sources and free membership of Polar Plus, the UK's biggest EV charging network - will save you more than £300 a year! Get a quote

Why do electric cars cost more upfront than petrol or diesel models?

The culprits are the costly lithium batteries. They’re expensive to source, and therefore drive up the price. However, some analysts10 believe that the total cost of owning an electric car will dip below the cost of petrol and diesel models by as soon as 2020 as battery technologies improve and costs are driven down. This decrease in the overall cost to buy an electric car, coupled with a continued rise in fuel prices, means that they’re set to become a more and more attractive choice as time passes. 

How are electric cars taxed?

Well, it all depends whether you opt for a hybrid or a pure electric car, and whether you’re buying one for personal or business use. Right now you won’t pay any car tax on electric cars that produce zero emissions. That’s as long as it’s powered by electricity from an external source or an electric storage battery that isn’t connected to power while the car is actually moving. Until this year, the Government has also been kind to hybrid cars, but since 1 April 2017 all hybrid cars attract road tax. 
 
Find out more about the tax benefits of electric cars, here.

How much will an electric car save me in car tax?

The government’s new car tax shakeup means that the sum you pay depends on when you register your car and the level of its CO2 emissions. Electric cars registered before April 2017 won’t pay any car tax, but due to a new ‘list price’ rule, any registered after April 2017 could incur a £310 yearly charge if they cost over £40,000 to buy upfront11

Electric cars could potentially save you hundreds of pounds during the years you own it5.

Cars registered before March 2001

These are taxed based on engine size because emissions data isn’t available for these models. Smaller engines incur a £145 tax charge, while the rest are charged at £235.  

Cars registered between March 2001 and March 2017

These are taxed based on emissions. Cars fall into 13 bands – each defined by the CO2 emissions of the makes and models of each vehicle. 
 
All cars pay a different rate of tax in their first year of registration, depending on their CO2 emissions band. After the first year, the ‘standard rate’ kicks in which is still related to the 13 bands, but increases a lot for those vehicles with much higher emissions. 

Cars registered after April 2017

The new system is still emissions based, but it divides cars into one of three groups after its first year on the road – zero emission, standard, or premium

Similar to the 2001 to 2017 scheme, the first year of tax relates to the 13 bands, but from the second year onwards, the rate falls to a new set rate; either £140 for the standard rate or £450 for the premium rate. Electric cars are exempt from the standard rate, but could still potentially pay a discounted premium rate of £310 per year for five years (before dropping to zero) if the car costs £40,000 or more to buy. This is due to a new ‘list price’ rule.

This means that if you go to town and buy a top-of-the-range Tesla, you’ll end up paying the £310 yearly charge for five years. In contrast, cars with a lower list price, like a Nissan Leaf won’t incur any charges and will see you saving anything from £20 a year to £500 a year depending on the car you’d be trading it in for.  

If you buy a hybrid or ‘alternative fuel cars’ (biofuel cars etc), you’ll only pay £10 or £25 in the first year, but will only receive a £10 discount on the ‘standard rate’ in the remaining years, meaning you’ll pay £130. 

Find out more about the tax benefits of electric cars, here.

Thinking of buying an EV?

We can help you charge your electric car everywhere, for less. Our EV Everywhere tariff is designed specially for owners of electric (and plugin hybrid) cars, and comes with fixed energy prices for two years, 100% renewable energy and free membership of Polar Plus, the UK's biggest EV charging network.

SOURCES:

  1. https://www.wewantanycar.com/news/would-an-electric-car-save-you-money/
  2. http://www.nextgreencar.com/electric-cars/buying-guide/
  3. http://www.parkers.co.uk/best-cars/2015/top-five-cheap-electric-cars/
  4. http://www.autoguide.com/new-cars/tesla/order-msrp-desc/
  5. https://en.wikipedia.org/wiki/Plug-in_electric_vehicles_in_the_United_Kingdom
  6. https://www.nissan.co.uk/vehicles/new-vehicles/leaf/prices-specifications.html
  7. http://www.bbc.co.uk/news/science-environment-39818083
  8. http://www.evchargingsolutions.co.uk/electric-vehicles/
  9. https://www.zap-map.com/electric-vehicles/electric-car-tax/
  10. https://www.forbes.com/sites/davidkiley5/2016/02/29/report-cost-of-electric-vehicles-falling-fast-will-drive-demand/#4c2e595f3ea9 and https://www.theguardian.com/environment/2016/feb/25/electric-cars-will-be-cheaper-than-conventional-vehicles-by-2022
  11. https://www.gov.uk/government/news/new-vehicle-tax-rates-from-1-april-2017

O​VO​ Energy Ltd, registered office 1 Rivergate Temple Quay Bristol, BS1 6ED, company no. 06890795 registered in England and Wales, VAT No. 100119879

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Please see below for full terms and conditions on 33% renewable electricity, 3% interest rewards, exit fees and saving claims.

 

1Monthly cost - Representative monthly direct debit costs based on a non-economy-7, dual-fuel, medium user (3100 kWhs elec. and 12500 kWhs gas) paying in advance by direct debit, including online discount.  All rates correct as of 22/11/2017, but may go up or down.

2Weekly cost - Representative weekly costs based on a non-economy-7, dual-fuel, medium user (3100 kWhs elec. and 12500 kWhs gas).  All rates correct as of 22/11/2017, but may go up or down.

3Pay Monthly Savings claims: Saving based on the estimated annual cost of OVO Two year fixed tariff for a non-economy-7, dual-fuel, medium user (3100 kWhs elec. and 12500 kWhs gas) paying monthly in advance by direct debit, including online discount. Comparisons made against the average of the Big 6 standard variable tariffs with equivalent features. All rates correct as of 22/11/2017.“The Big 6” are British Gas, Scottish Power, SSE, Npower, E.ON and EDF.

4Pay As You Go Savings are based on the average estimated annual costs for new PAYG OVO customers quoted through the OVO website (based on household and/or consumption information provided by those customers), compared to their current supplier and tariff. Comparisons taken between 01/01/2016 and 11/10/16. Incl VAT. Actual savings may vary according to your current supplier or tariff, individual tariff options, household information, consumption and location. 

We include almost twice as much renewable electricity as the national average: At least 33% of electricity in all of our tariffs comes from renewable sources. The national average, according to Ofgem as at March 2014 was 16.7%. For more information please visit this page.

33% of your electricity comes from renewable sources: 33% renewable electricity as standard as of 1st April 2015. Renewable electricity is generated from wind, solar, geothermal, wave, tidal, hydro, biomass, landfill gas, sewage treatment plant gas and biogas.

3% interest: Calculated at 3% per year for customers paying by advance direct debit.  The OVO Interest Reward is paid monthly based on   number of days in credit and the amount left in your account after you’ve paid your bill,  and the credit balance on which you can earn the OVO Interest Reward is capped. Terms apply: http://www.ovoenergy.com/terms/

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94% of surveyed customers would recommend us: OVO conducted a survey of their customers in between 1st January 2016 and 15th April 2016. Out of 15,312 customers who responded, over 94% rated OVO 6+ when asked 'how likely would you be to recommend us to a friend and family, on a scale of 1 to 10.

Britain's top rated energy provider: Britain's top rated energy provider in the Which? 2015 satisfaction survey. Survey conducted in October 2015. Awarded in January 2016.

uSwitch's Energy Supplier of the Year: OVO energy was voted and awarded  'Energy Supplier of the year' and best for: Overall Customer Satisfaction, Most Likely to be Recommended, Value for Money, Best Deal for You, Customer Service, Billing Services, Energy Efficiency, Meter Services, Online Services, Green Services and Transfer Process. OVO Energy scored a 96% customer satisfaction score.

Which?: Achieved the highest score of 78% in the Which? Satisfaction Survey conducted in September and October 2016.

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