New analysis: petrol car drivers paid a £700 ‘petrol premium’ in 2023

New analysis from the Energy and Climate Intelligence Unit (ECIU) has found that the top 10 selling petrol cars of 2023 could cost their drivers around £700 a year more to run their vehicles than their Electric Vehicle (EV) equivalents.

Conversely, drivers of the top 10 selling EVs of 2023 – such as the Tesla Model Y - will pay almost £1,300 a year less to run their vehicles than drivers of the equivalent petrol cars. [1]

The analysis anticipates that over 300,000 EVs will have been sold in the UK in 2023. Over the course of their lifetimes, these EVs will generate a total of £5.6bn in savings for their owners, compared to their petrol equivalents. Meanwhile, the petrol cars sold in 2023 will cost their owners an extra £7.6bn, compared to their EV equivalents.

With the Government’s Zero Emission Vehicle (ZEV) mandate policy starting on 1st January [2], those opting to buy a petrol rather than an electric car in 2024 would pay an estimated £10,000 more in running costs over the lifetime of the vehicle, compared with an electric car. Meanwhile, the ZEV mandate will require that a minimum of 22% of the new cars sold in 2024 will be EVs – these are likely to save the people that buy them over £7.7bn over the cars’ lifetimes.

Colin Walker, Transport Analyst at the Energy and Climate Intelligence Unit, said:

“With drivers being hit by a £700 petrol premium, a switch to an EV will see a quick return on the investment made. Electric car sticker prices are falling, with analysts at Goldman Sachs expecting price parity to be reached by the middle of the decade. [3]

"However, since less than 20% of car sales in the UK are for new vehicles, it’s the growth of the second hand EV market that is critical if more families are to be able to access the cheaper driving than comes from EV ownership. With the ZEV mandate coming in to force next year, more new EVs will be sold which, in turn, will result in more EVs making their way on to the second hand market in the years to come.”

ENDS

Notes to editors

[1] the analysis used data from the SMMT and looked at a) the top 10 selling electric vehicles, and evaluated their running costs compared to equivalent petrol vehicles and b) the top 10 selling petrol vehicles, and compared their running costs to equivalent electric vehicles. Note that the equivalent vehicles chosen to make these comparison are not necessarily top 10 sellers themselves.

[2] The ZEV mandate requires car makers to ensure an increasing proportion of the cars they sell are electric. 22% of new car sales in 2024 will need to be EVs, rising year on year until 80% in 2030, and 100% in 2035.

[3] https://www.goldmansachs.com/intelligence/pages/electric-vehicle-battery-prices-falling.html