Running cost comparison

Are electric cars cheaper to run? Running cost comparison

Last updated March 1st, 2024

Despite their typically higher upfront costs, electric cars (EVs) are widely believed to be cheaper to run than their petrol and diesel counterparts.

Historically, EV owners have benefited from low-cost charging, tax exemption - and even government grants towards the cost of switching to an electric model. When petrol and diesel prices hit their all-time highs in July 2022, going electric certainly seemed like an attractive option for many motorists.

Unfortunately, some developments have led to EV ownership costs increasing:

  • The Government’s plug-in car grant (PiCG) was withdrawn in June 2022.
  • Energy prices in the UK have risen dramatically since February 2022, which has led to higher charging costs for EV owners.
  • The Benefit in Kind tax rate for electric company cars increased from 1-2% in April 2022.

In this guide, we will examine whether EVs are truly cheaper to run than combustion engine cars. To get to the bottom of this matter, we’ll break down and compare running costs for EVs, hybrid electric vehicles (HEVs) and combustion engine (petrol and diesel) models.

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Combustion engine vs EV running costs

Cost Petrol/diesel cars EVs
Insurance Insurance costs vary, but petrol and diesel cars are often cheaper to insure than electric equivalents. Data from the Association of British Insurers (ABI) reveals that electric cars are 25.5% more expensive toinsure than their combustion engine counterparts. (The costs of repairs, materials and labour for EVs were cited as key factors impacting premiums.)
First-year road tax Owners of combustion engine cars must pay between £30 and £2,605 in road tax in the first year depending on their CO2 emission levels. EVs are exempt from road tax until 31st March 2025 (after which all EVs registered from 1st April 2017 will be charged a £10 first-year road tax rate).
Road tax (subsequent years) After the first year, all non-EVs are currently taxed at a flat annual rate of £180, irrespective of their road tax band. All EVs are exempt from road taxuntil 31st March 2025, after which they will be charged the standard annual rate.
Expensive car supplement for road tax If you buy a non-EV with a list price exceeding £40,000, you must pay a further annual tax of £390 for five years. EVs are currently exempt from the expensive car supplement.
However, from 1st April 2025, you must pay a further annual tax of £390 forfive years if your EV’s list price exceeded £40,000.
Fuel/energy Average fuel prices per litre (February 2024): - Unleaded: 141.94p, - Diesel: 150.11p, - Super unleaded: 156.93p.
Want to work out your fuel costs for a particular model? Try our free fuel cost calculator.
Public charging rates vary but 65p per kilowatt hour is typical.
Based on this figure, a full charge from empty would cost £65 for a 100kWh EV – or around £32.50 for a 50kWh model.
Home charging is generally cheaper, although the purchase and installation of a typical 7kWh fast charger may set you back £1,000-£2,000.
If your electricity rate is £0.30 per kWh, you can expect to fully charge a 100kWh EV for around £29.
Repairs and maintenance Maintenance costs vary. Combustion engine cars may need more frequent maintenance and repairs than EVs, but repairs are often cheaper. Maintenance costs vary. Whilst EVs may require fewer repairs, part and labour costs are often higher.
Parking concessions Parking concessions are rarely given to petrol/diesel cars alone. EVs qualify for free or discounted parking at some UK locations.
Emissions-based congestion charges Combustion engine cars may face daily charges for travelling within emissions-based zones. 
They may have to meet minimum emissions standards to avoid charges - or fines, in Glasgow’s Low Emissions Zone (LEZ).
EVs are usually exempt from daily charges inemissions-based chargeable zones.
In Oxford’s ZEZ (Zero Emission Zone), only fully electric powertrain vehicles are automatically exempt from daily charges.

Electric car running costs breakdown

According to data from the financial research site, Nimblefins, running an electric car typically costs around 9 pence per mile. Despite today’s high electricity rates, this is still only around half the cost per mile of a typical petrol car.

EV type Average range (miles) Average usable electric battery capacity (kWh) Average cost per mile
Non-luxury EVs 152 40.7 £0.08
All UK EVs 193 57.7 £0.09
Luxury EVs 249 81.1 £0.10

Why have EV charging costs changed?

Here are some of the key factors that led to an increase in EV charging costs:

  • The energy crisis took hold in February 2022, leaving many people with less money to put towards a new car. This means fewer motorists can afford to switch to an EV, as they are priced higher than combustion engine equivalents.
  • Higher energy prices mean that it is now much more expensive to charge an EV at home than before the crisis.
  • Charging at public stations is typically even more expensive, as all public chargers are subject to 20% VAT – which is 15% higher than the rate applied to domestic mains electricity. Whilst a minority of public charge points are free to use, it may not always be practical to do so.
  • Due to VAT costs and record-high energy prices, it can sometimes be more expensive to charge an EV in public than to fill an equivalent petrol engine.

How much does it cost to charge an EV in 2024?

According to Nimblefins, as of January 2024, the cost to charge an electric car to full capacity ranges from £5 (for smaller EVs such as the Smart EQ fortwo) to £25 or more (for many luxury EV models).

For the cheapest charging rates, consider installing a home wall box and choosing an energy provider with off-peak tariffs.

Hybrid cars vs EVs: Running costs breakdown

HEVs fall between combustion engine cars and EVs in terms of running costs. Let’s take a more detailed look at how they stack up against EVs:

Cost Comparsion
Insurance costs Insurance costs are variable, but like EVs, HEVs are often more expensive to insure than combustion engine cars due to higher repair and replacement costs.
First-year road tax Starts from £10 for HEVs registered after 2017 (may be higher depending on CO2 emissions).

Full EVs are exempt from road tax – but will be taxed £10 in the first year from 1st April 2025.
Road tax (subsequent years) £180 per year for HEVs registered after 2017.

(Full EVs will be taxed at the flat annual rate from 1st April 2025.)
Road tax: Expensive car supplement Owners must pay a £390 annual tax for five years if their HEV’s list price exceeded £40,000.

(This tax will also apply to owners of EVs with a list price over £40,000 from 1st April 2025.)
Fuel/energy HEVs typically provide better fuel economy than their combustion engine rivals. If you have a plug-in hybrid (PHEV), the cost of powering your car will depend on both fuel and energy prices.

EVs are typically cheaper to run than HEVs but have higher upfront costs.
Maintenance and repair costs Much like EVs, HEVs are often more expensive to repair due to their sophisticated engines and technology. General maintenance costs shouldn’t be any higher than a traditionally-fuelled traditionally fuelled car, providing you stay on top of your servicing schedule.
Parking discounts HEVs are eligible for free or discounted parking in certain locations.
Emissions-based congestion charges HEVs are not usually subject to charges in emissions-based congestion charge zones. However, in Oxford’s Zero Emission Zone, HEVs (and all vehicles excluding full EVs) are subject to various daily charges.

Mild vs full vs plug-in hybrids: Which are the cheapest to run?

In this section, we’ll compare the three main types of hybrid car and their running costs to help you decide which is most economical for your circumstances.

  • Mild hybrids (MHEVs)

    Mild hybrids (MHEVs) are often cheaper than equivalent full or PHEVs. The crucial distinction between a MHEV and other hybrid varieties is that a MHEV’s electric motor doesn’t assist the engine in driving the car. Instead, it saves fuel by recovering kinetic energy, which is then used to power an ancillary electrical system.

    Mild hybrid cars occupy lower road tax bands than many combustions engine cars. However, they are taxed at a higher rate than most other hybrids, due to their greater reliance on a traditional engine.

  • Full hybrids (HEVs)

    Full hybrid cars – or Hybrid Electric Vehicles (HEVs) are powered by a combustion engine and an electric motor. Unlike a MHEV, a HEV can be powered independently by its electric motor. This helps to provide better fuel economy.

    HEV’s electric-only driving capabilities are best suited to short city journeys at low speeds, as the batteries are usually quite small. However, this also means they can be quickly charged to full capacity by the engine.

    Full hybrids provide some of the key benefits of electric motoring, without range anxiety. Even if the batteries run flat, you can drive a full hybrid on petrol or diesel power alone.

  • Plug-in hybrids (PHEVs)

    As their name suggests, PHEVs can be plugged in to charge their electric batteries. Therefore, PHEVs usually have longer electric ranges than HEVs.

    If you don’t usually exceed the electric-only range (typically around 30 miles) and charge your car every night, you could potentially run your PHEV on electric power alone. However, bear in mind that PHEVs can be on the expensive side and are sometimes not much cheaper than equivalent full electric models.

    To learn more about the different hybrid and EV varieties, visit our guide, ‘Types of electric cars’.

Are EVs the best option for drivers in 2024?

  • EV owners have encountered some fresh challenges in recent years, most notably the steep rise in electricity prices caused by the energy crisis.
  • The relatively high prices of new and nearly new entry-level EVs compared to equivalent non-EVs remains a barrier to ownership for some drivers.

However, there are some encouraging signs for aspiring EV owners:

  • As of January 2024, used EV prices are falling, which has helped to make modern electric cars affordable to a broader audience.
  • The all-electric automaker Tesla has reduced its prices to compete in the growing EV marketplace.
  • Public EV infrastructure is also improving. The latest Zap-Map data shows that in December 2023 there were 53,906 EV charge points across 31,056 locations. In April 2023, Zap-Map also reported that there were 3,568 free-to-use charge points.
  • Whilst forecasts indicate that the price cap for energy is likely to fluctuate throughout 2024, our energy bills should ultimately get cheaper. This should translate to cheaper EV running costs in the near future.

Are electric cars cheaper to run than petrol or diesel?

  • Despite steep rises in electricity rates since 2022, in most circumstances, EVs are still significantly cheaper to run than combustion engine equivalents. When it comes to running costs, hybrids occupy the middle ground between EVs and combustion engine cars.
  • EVs are also exempt from road tax (until April 2025) and many emissions-based congestion charges.
  • A PHEV could be an excellent choice if you have access to charging facilities and usually make shorter trips (under 30 miles).
  • However, running a PHEV could prove to be costly if you regularly make longer journeys, as once the electric battery runs out, your car will essentially work as a combustion engine car. As the battery adds significant weight to a PHEV, when operating on the combustion engine alone, they will typically run less efficiently than many modern purpose-built petrol and diesel cars.

Is it worth buying an older used electric car?

Members of various online automotive communities have discussed the benefits (and drawbacks) around buying used first-generation electric cars.

Used first-generation Nissan Leafs are available from around £5,650 on various online car marketplaces. It was noted that these cars have limited ranges compared to newer EVs with the reported range between 73 and 107 miles.

An early Leaf could be an excellent purchase for an older driver that sticks to shorter drives. This would provide favourable running costs at an accessible price point.

If you need a longer range, there are many quality used EVs on the market around the £10k price point that fit the bill (e.g. the Hyundai Ioniq, Volkswagen e-up! or Skoda e-Citigo).