Comparing EV and ICE Vehicle Cost of Ownership
1stAssociated are passionate about energy efficiency in residential and commercial properties and in general, for instance electric vehicles are forever improving with sufficient range and performance to be a practical alternative to petrol or diesel vehicles .
Here, we compare EV (Electric Vehicles) and ICE (Internal Combustion Engine) vehicles.
To make a fair comparison of the cost of electric and internal combustion engined vehicles to the end user requires consideration of quite a few different factors relating to capital cost, fuel, maintenance, insurance, depreciation, and tax treatment.
A private individual will get a different deal to a corporate fleet buyer buying fleet vehicles for pool car use, and a different deal again to a private individual acquiring an electric vehicle by using a salary sacrifice scheme (not available for ICE vehicles) or said individual receiving use of a company car as part of their remuneration package.
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Vehicle Related Cost Factors
EVs in 2020 cost more initially than the most nearly comparable model of internal combustion car. On the models compared, there seems to be a cost premium of around 30% on the list price. For newer models, the premium is lower whilst for older models the premium is sometimes higher. It is also possible that negotiation will result in a higher discount on ICE cars as electric vehicles are rapidly growing in popularity and available vehicles tend to be bought faster.
Early model EVs had higher depreciation than petrol, but lower than diesel. With more recent models, this has changed primarily as a result of their having longer range than the early models. A report by ING Economics Department June 2019 estimates that 2020 model EVs will retain a higher proportion of their initial value after 5 years than either petrol of diesel vehicles.
(40-47.5% versus 35-42.5 – petrol, or 27.5-35% - diesel. In my table of cost comparisons, I have conservatively used 49% residual value after 4 years for all vehicles.
EVs tend to cost the user around 20 to 25% of ICE vehicles in energy cost per mile when a suitable energy contract is obtained and kept in date. Savings are greater the greater the vehicle annual mileage, and especially so if an employer offers staff EV charging as a perk (free of benefit in kind tax).
Most maintenance costs for EVs are either about the same, or much less for EVs.
Tyres may cost a little more as EVs are heavier.
Brakes will take far less maintenance as friction brakes on EVs are only used in emergencies when regenerative braking cannot stop the vehicle fast enough.
Oil, oil filter, engine air filter, radiator, exhaust, starter motor, clutch, cam belts etc. do not exist on an EV, and the motor requires little or no maintenance.
Wipers, screen wash, air conditioning, tyre checks, bodywork, screens and windows, lights all similar to any other car.
For comparison, estimated maintenance costs are the same as for an equivalent ICE vehicle. A very conservative estimate.
Some EVs can be significantly more expensive to insure than equivalent ICE vehicles, especially for high performance models like those from Tesla. For basic electric vehicles of comparable performance to their nearest ICE equivalent, insurance is also higher, but the cost difference is far smaller.
Overall, taking into account only vehicle related factors and ignoring tax and incentive considerations, EVs tend to work out a little dearer to own for low to medium mileage drivers, and a little cheaper for high mileage drivers where fuel and servicing costs make up a larger proportion of the total.
Tax and Incentive Considerations
Salary sacrifice and benefit in kind savings will in virtually every case make EVs a more cost effective option than ICE vehicles for anyone able to avail themselves of these tax advantages. Enhanced capital allowance, and exemption from the congestion charge and road tax coffer further savings. Employers are also able to offer EV charging as a tax free benefit in kind.
Electric vehicles are now cost effective and technically capable enough to make a compelling case for their adoption - especially for high mileage drivers, and anyone frequently driving into Central London. In the future this will also apply to any other city centre where similar congestion charging or emission restrictions might be applied.
Table of Electric Cars April 2020
|Electric Vehicle||Price inc grant*||Range per charge miles||Comparable ICE Vehicle||Price|
|Tesla Model X||£79,000||300|
|Jaguar I Pace||£60,995||298|
|Tesla Model Y||TBC||250|
|Tesla Model 3||£39,000||250|
|BMW i3||£35,120||173||BMW 118d M Sport||£29,445|
|Kia E Nero||£31,120||253||Kia Nero Hybrid||£24,855|
|2019 Hyundai Ioniq||£29,450||194||Hyundai Ioniq Hybrid||£23,840|
|Hyundai Kona||£29,100||200||Hyundai Kona 1.6 T-GDi||£27,870|
|Peugeot E 208||£28,550||211||Peugeot 208 1.5L Blue Hdi GT||£21,680|
|2019 Nissan Leaf||£27,995||168|
|Vauxhall Corsa E||£27,815||211||Vauxhall Corsa 1.2 Turbo Auto||£19,020|
|2019 VW E Golf||£27,575||144||VW Golf S TDI||£21,635|
|MG ZS EV||£25,495||163||MG ZS Exclusive||£16,295|
|2020 VW E UP||£19,500||164||VW ID 115PS Gti||£15,055|
|Skoda Citigo E||£16,955||164|
|Note; A grant of £3,000 is given for EVs below £40,000|
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