The true cost of owning an electric car

The UK is one of of Europe’s biggest markets for electric vehicles (EVs), behind Norway and Germany. There are nearly 200,000 full EVs on British roads today and close to 400,000 plug-in hybrids (PHEVs). 

Although the coronavirus pandemic took its toll on new car sales last year, it encouraged more people to go electric. Sales of EVs in 2020 were up by 186% compared with the previous year, according to the Society of Motor Manufacturers and Traders (SMMT), with 108,205 registered. PHEV sales rose by 91% on the previous year, and together these two power types accounted for nearly 10% of new car registrations for the first time; that’s three times more than in 2019. 

That’s all very encouraging, but EV buyers could end up paying extra to go green. Many of those cars are more expensive to buy than their petrol and diesel-engined counterparts, and some cost more to insure and maintain. On top of that, if you can’t recharge your car cheaply at home you could end up paying more to run it than you would a petrol car.

To see how they compare with other types of cars in terms of costs, we’ve chosen some of our favourite EVs: the Volkswagen ID.3 Pro Performance Life (winner of the small electric car category at the 2021 What Car? Awards), the Tesla Model 3 Standard Range Plus (winner of the large EV category), the BMW iX3 (our top electric SUV), the Kia E-Niro Long Range (best small EV for long journeys) and the Audi E-tron (the highest-rated large EV for comfort). 

Buying

Many EVs are pricier than petrol or diesel alternatives. Volkswagen's ID.3, for example, costs around 16% more than a comparable Golf, while Kia’s E-Niro will set you back just over 20% more than a Niro Hybrid. However, the Tesla Model 3 is 10% cheaper than the equivalent BMW 330e PHEV and around the same as a 320d, while Audi’s E-tron represents a saving of nearly 10% over a comparable Q7. 

Insurance

At the top end of the market, some EVs can be a lot more expensive to insure than their petrol and diesel rivals. The priciest of our examples to insure is the Model 3, which costs a whopping 45% more than a comparable 3 Series. The E-tron also costs marginally more than a comparable Audi Q7. However, at the more affordable end of the market, there’s little difference between the ID.3 and Golf, or the E-Niro and other Niro models.

Doug Woodley, technical assurance manager at Thatcham Research, which helps to create insurance group ratings, says: “Many EVs are more powerful than their petrol and diesel equivalents and present a higher insurance risk based on relative performance alone. In addition, EVs are still broadly more expensive to buy than the equivalent conventional car. 

“The construction of EVs often differs from that of more traditional cars, too. Many utilise cutting-edge materials and manufacturing techniques, which tend to make them more expensive to repair following an accident. 

“Vehicle manufacturers are working to bring down the cost of EV ownership, and as the take-up of EVs grows, we would expect the cost of accident repairs to fall. So we expect the premium differential between EVs and conventionally powered vehicles to narrow in the months and years ahead.” 

Servicing

EV aficionados often brag about how cheap their cars are to service, but when you take into account the cost of other maintenance items, such as tyres, this isn’t the case with all models according to CAP HPI, which specialises in car valuations and background checks.

Buyers of the ID.3 can expect to shell out £778 in service and maintenance costs over three years, says CAP HPI. That’s 36% more than for a Golf 2.0 TDI Life and 42% more than for a 1.5 petrol Golf. 

“The difference between the Golf and ID.3 is mostly down to tyre size,” explains Steve Chambers, senior service, maintenance and repair editor at CAP HPI. “The ID.3 has a larger and rarer tyre size than the Golf, which has one of the most common tyre fitments. Electric vehicles also have a slightly higher historic tyre wear profile based on usage. 

“Vehicles used around town tend to wear out tyres and brakes more quickly than those spending more time on motorways. However, EVs tend not to wear their brakes as much as other cars because of the regenerative energy recuperation (which puts otherwise wasted energy back into the battery under deceleration) and the retardation this provides. That said, the tyres of any urban-driven car will still have to endure lots of acceleration and will most likely encounter a greater number of potholes per travelled mile.” 

However, in all three of our other comparisons, the EVs proved cheaper to maintain. The Model 3 costs 12% less than the 330e and 17% less than the 320i. In fact, the 330e is the most expensive of all, costing 27% more than the 320i over three years.

“The 330e is more than 300kg heavier [than other 3 Series models] and has battery power available, which gives a power boost. The view here is that with the extra available power and weight, the average wear on tyres will be slightly greater than that of the lighter, lower- powered variant,” says Chambers. 

Resale values

When EVs were an unknown entity among the majority of used car buyers some years ago, second-hand values were far lower than their conventionally powered counterparts. We heard horror stories from owners of cars that had retained as little as 17% of their original value after three years. 

However, the predicted values of EVs are now far more comparable with those of other cars, and when compared with increasingly unpopular diesels in some classes, they can be markedly better. 

Tesla’s tight grip on the market for its used cars in the UK has helped to bolster values. According to CAP HPI, a Model 3 will retain 56% of its original price after three years and 30,000 miles, while owners of comparable 3 Series models can expect to get back only 43-45% of their car’s list price. 

Highlighting the demise of diesel engines in smaller car classes, the Golf 2.0 TDI is predicted to shed 8% more of its value after three years than the petrol Golf and the ID.3. And high demand and a long waiting list for the E-Niro mean it should hang on to marginally more of its value than other Niros. 

However, the E-tron is predicted to shed value slightly faster than the AudiQ7, even though it costs marginally less when new. Chris Plumb, senior valuations editor at CAP HPI, says that this reflects a dip in average EV values in the wider used car market in the past year. 

He predicts that EV values are likely to continue to be dented by a number of factors. “The high new-cost premium that manufacturers put on EVs is not always reflected by consumers in the used market, making them look expensive through the first and second phases of their lifecycle,” he says. “While there is a healthy level of used retail demand, supply [of many models] has increased over the past 12 months, impacting what people are willing to pay for them. In addition, strong consumer offers on new cars has put additional pressure on used values.” 

Electric cars compared with rivals on cost

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