EV Costs Vs Petrol Equivalents
In the UK, many drivers are interested in electric vehicles due to their various benefits. These include lower running costs, a significantly smaller carbon footprint, and the upcoming ban on Internal Combustion Engine vehicles. Should I switch to an electric car in 2023?
It’s clear that, at least right now, driving an electric car is the way forward.
The perception is that electric cars are more expensive than the Internal Combustion Engine (ICE) equivalent. And the British media asks when they might become more affordable in the UK. Look beyond the headlines; you may be surprised to find where savvy car buyers spend their money.
Are EV prices coming down?
Price has always been a significant factor in the EV purchase decision, with 63% of consumers believing an EV is beyond their budget. This view is regularly compounded by ill-informed commentators who don’t consider alternative ways of obtaining an EV.
Some consumers perceive the often-higher upfront costs as an insurmountable barrier to EV adoption. But we must consider that leasing parity between EVs and ICE vehicles doesn’t require the screen price to be the same.
Leasing an EV seems a sensible solution when times are uncertain. With pressure from the German car makers, the EU has extended the ban on new ICEVs to 2035, and at the time of writing, it looks like the UK will follow suit. Stating more research on synthetic “E” fuels is needed.
Some might argue that time is scarce for such research, especially when EVs are advancing at the rate they are and the planet’s climate needs fixing.
New Electric Tariffs
When considering the costs of running an EV, it will pay to think about the latest models and funding options available.
Take the new GWM Ora Funky Cat at under £250 pm or the stylish MG4 and the ever-popular MG ZS range. All start at sub £300 monthly, with an initial rental. An additional bonus is the lower running costs of an EV.
EVs are more cost-effective than petrol or diesel cars regarding running expenses for several reasons. In theory, charging an electric vehicle at a rapid charge point is cheaper than filling up a fuel tank at a petrol station to achieve the same range.
If you are charging using a home charger, it’s worth checking your cost of electricity. Then shopping around to secure the best EV tariff. Using the new “off-Peak” tariffs from Octopus at 7.5p per kWh and British Gas at 9.4p kWh, you could fully charge the popular MG ZS EV 72.6 kWh battery for just under £7, giving you a range of 273 miles (WLTP).
To fill the equivalent MG ZS petrol car with 273 miles worth of fuel at £1.44 per litre (£6.53 Imperial Gallon) would cost £45.71 at 39mpg(WLTP).
Even with the higher priced EV public rapid chargers(22kwh) costing around 45p/kWh, resulting in 273 (WLTP) miles of range for £32.67, it’s still cheaper and more environmentally friendly than a petrol or diesel car. Ultimately charging your electric car at home is best for keeping your EV running costs down.
|COST PER MILE
|MG ZS EV Long Range 73kWh 5dr Auto
|Home Charge @£0.094p per kWh
|MG ZS EV Long Range 73kWh 5dr Auto
|Rapid Charge 22kWh @£0.45p per kWh
|MG MOTOR UK ZS 1.0T GDi Exclusive 5dr DCT Petrol 39mpg
|E10 Petrol @£1.44 per litre or £6.53 imp gallon
What are the costs of running an electric car like?
When thinking about whether EVs are cheaper to run, electric cars have several advantages over combustion engines. One of the main benefits is that they have significantly fewer moving parts since they lack an engine, transmission, or exhaust system.
This means fewer parts can wear out or require frequent maintenance, resulting in lower maintenance costs for electric vehicles than traditional vehicles.
Electric vehicles (EVs) do not need oil changes since they lack an internal combustion engine. This means you can save money on oil and filter changes and avoid the time and inconvenience of these regular maintenance duties.
Many electric vehicles utilise regenerative braking technology, which allows for the capture and storage of energy during the braking process. This technology can decrease the amount of wear and tear on brake pads and potentially extend their lifespan, resulting in cost savings for brake system maintenance.
Certain cities impose Clean Air Zones (CAZ ) and will fine vehicles with high emissions. By owning an electric car, you can avoid incurring these additional costs.
Better Charging point availability
The other side of the ‘cheaper running costs’ argument is that the UK currently needs the infrastructure to support a country full of EV users, and there needs to be more charging points.
The UK’s electric vehicle charging infrastructure is growing at a steady pace. As of the end of July 2023, there were 45,737 charging points available across 26,805 locations.
This marks an impressive 40% increase in the overall number of charging devices from July 2022. It’s great to see the country moving towards an eco-friendlier future.
And on the subject of charging, in our experience, using a top-up charging method is highly recommended instead of waiting for your battery to fully drain before charging it to maximum capacity.
This approach requires a combination of home charging and fast, reliable public charging stations. Your overall running costs will inevitably increase if you encounter distant public charging points or slow charging processes, so a little planning goes a long way.
The Chinese Takeaway
The UK-designed MG Motor has recently emerged as the most triumphant entrant from the Chinese market. Last year, MG Motor recorded sales of over 50,000 vehicles in the UK, aiming to surpass this number in 2023.
Over a quarter of British respondents in a recent CARWOW poll indicated their willingness to consider purchasing a Chinese car as brands from the region gain more visibility in the UK.
Its assortment of affordable petrol and electric vehicles has gained significant popularity, with approximately 51,050 MG-branded cars registered in the UK last year.
Its latest model – the MG4 – is currently the most affordable family-sized EV available and is one of only two models priced under £30,000.
Volvo’s new EX-30 is getting close to this with a starting price of £33’795, which would have almost been unthinkable a few short years ago, and let’s not forget the Chinese Geely group owns Volvo.
Better Quality and Value for Money
In the same poll, when questioned about their interest in Chinese vehicles, 33% of respondents stated that they provide superior value for money compared to the dominant mainstream brands from Europe, the US, Japan, and Korea in the UK’s new-car market.
Nineteen per cent of respondents reported them being more competitively priced, while 10 per cent claimed that Chinese brands have superior technology.
According to James Hind, the co-founder and CEO of Carwow, the recent increase in drivers willing to buy a Chinese car indicates the rapidly changing perceptions in the automotive industry.
More Chinese Brands are Coming.
Chinese car manufacturers aiming to enter the UK market face the challenge of winning over potential customers who must be made aware of their brands. They need to improve the public’s perception of their build quality to attract new drivers.
The build quality may have caused some concern, but it has undergone significant improvements and can now challenge the more traditional brands that the UK buying public is more accustomed to.
Mr Hind added: ‘Chinese cars have modern, sleek styling, and Chinese manufacturers are headhunting European designers to ensure new models have high kerb appeal.’
Chinese cars are also receiving high safety ratings in Europe, surpassing those of well-established European car brands.
2022 Euro Safety NCAP Best in Class award
In the 2022 Euro Safety NCAP Best in Class awards, none were European manufacturers, with the GWM Ora Funky Cat awarded Best Small Family Car.
Chinese brands are directing their attention towards electric vehicles. This is evident from the list of manufacturers below who either already offer electric vehicles in the UK or plan to do so soon.
- Aiways – The Chinese company Aiways may start selling cars in the UK in the upcoming months, and it has already established its European base in Germany.
- BYD – Build Your Dreams – has already introduced its first UK model, The Atto 3
- Chery – The Chinese automotive behemoth, Chery, is anticipated to present its inaugural vehicle in the UK at the beginning of 2024.
- Geely group- Has brands like Zeekr, Volvo, Polestar, Lynk&Co, LEVC already selling in Europe.
- GWM – The Ora Funky Cat, a small electric hatchback, is currently available in the UK. It’s the inaugural brand from the Great Wall Motor Group to penetrate the British market.
Why are Electric Vehicles Getting Cheaper?
China’s access to vast battery production capability means they can produce high-quality, long-range EVs much more cheaply than European manufacturers.
Across China, 125 battery Gigafactories are already active — with another 100 due before 2030: that’s currently more than ten times the combined number in Europe and North America. This is according to Benchmark Mineral Intelligence (BMI)—a specialist information provider for the EV supply chain. The UK has just one; you guessed it, it’s Chinese-owned!
This rapid expansion of battery production and the improved supply of Electronic Capacitors is inevitably set to drive the price of EVs down.
At the same time, new exciting brands increase choice in the market, which is excellent news for British motorists considering EVs.
Many people are still deciding whether to buy an electric vehicle stating high purchase costs as the barrier.
However, this is now clearly changing due to the competitive prices of Chinese manufacturers.
Chris Black, the commercial director at LeasePlan UK, notes that China has benefited from investing in research and development in electric vehicle technology early on.
With around 80 per cent of automotive batteries manufactured in China, they have a head start in achieving economies of scale at lower prices.
One route of lending worth considering in an unpredictable market is leasing. It lets you protect your capital, make the most of current promotions, reduce transportation costs, and, more importantly, fix expenses.
As electric cars are still a relatively new technology, leasing frees you from concerns about the vehicle’s future value or brand loyalty, as depreciation is the bank risk.
You can let the manufacturers and politicians worry about those issues and follow the lead of many other drivers who have already changed to greener transportation.
When leasing a car, the screen price becomes less relevant compared to when you are purchasing a car outright. This is because the lease cost is based on different factors. For Example, Residual Value, Cost of Money, and Quantity Rebates.
Multilayer Ceramic Capacitors. In recent years, the global electronics industry has faced a shortage of MLCCs due to various factors, including increased demand, supply chain disruptions, and limited production capacities from manufacturers.
Ambition to be the world leader in EV technology and an extensive supply chain for battery production.
When you take out your lease, the price, as is the maintenance price, is fixed for the term. So you know your costs regardless of what happens in the markets.
If you are charging from home, the illustrated deals above, from Octopus and British Gas are for a fixed term.