New analysis – ahead of petrol price hikes, EVs already three and a half times cheaper to run

ECIU compared a Kia Nero EV with a petrol Kia Sportage, a Jaguar I-pace EV with a petrol Jaguar E-pace, and a Nissan Leaf EV with a petrol Nissan Juke. Based on the typical driving and charging behaviour of EV owners, it found that that the pence per mile fuel costs for the EVs were on average 3.5 times lower than their petrol equivalents.

Even with the price of electricity having increased due to the gas crisis, it is now set to remain higher, but stable for the next two years under the government’s Energy Price Guarantee.

EV drivers typically leave home with their car at 94% charge and currently more than 90% of EV owners have access to charging at home. [3] This means they can access cheap, night-time tariffs – for example, the Octopus Go Tariff allows people to charge their cars at night for as little as 7.5p/kWh. [4] With 99% of car journeys being under 100 miles [5] (well within the range of most EVs), it is rare for EV journeys to require a fuelling stop outside the home. In fact public chargers, that are typically more expensive, account for only 10% of the charge that goes into the UK’s EVs. [6]

Colin Walker, Transport Programme Lead at the Energy and Climate Intelligence Unit (ECIU),said: “In spite of gas driving up electricity bills, electric cars are much cheaper to run than their petrol counterparts with lots of homes taking advantage of cheap night-time charging rates. OPEC’s decision signals further volatility in petrol prices, but with Government plans to reform the energy market and decouple the cost of cheaper renewable electricity from more expensive gas power stations, EV drivers should be able to save more by taking advantage of declining electricity costs in the coming years.”

Electricity prices have been driven higher by the gas crisis, because gas power plants usually set the price despite providing only 40% of our power. Plans are being developed to ‘decouple’ cheap renewables from gas power prices, allowing EV customers to access wind and solar that are nine times cheaper than gas power prices seen this summer. [7]

The latest statistics from the SMMT show that electric vehicle sales have jumped by 22% in 2022, whilst petrol and diesel sales have slumped by 15 and 43%. With EVs now accounting for one in in six new cars sold, [8] more UK drivers are now accessing these savings.

Based on a realistic scenario of a mix of home and public charging, the owner of a Kia Nero EV will pay 5.1 pence per mile, whilst the owner of a petrol Kia Sportage can expect to pay 17.6 pence per mile – 3.5 times as much. This would save the EV driver £670 a year when driving the UK average of 5,300 miles a year. If an EV owner was to solely charge their vehicle on a cheap night-time tariff, the fuel costs for the Kia Nero drop to 2 pence per mile, making it over 9 times cheaper to fuel than the Sportage and saving the EV owner £830 a year. For the owner of a Jaguar I-Pace EV, these savings are £930, rising to £1160 if solely charging their vehicle on a night-time tariff.

For those without access to off-street parking and cheap, night-time tariffs, EVs remain cheaper to fuel than petrol cars, but the gap is smaller. Efforts to help those without off-street parking access the same savings are underway, and include: the work of some public charging networks to explore offering cheaper night-time charging tariffs; calls by some organisations to reduce VAT on public chargers from 20% to 5% (in line with the VAT levied on electricity purchased at home) [9]; and the Government’s Local Electric Vehicle Infrastructure initiative. [10]