Electric Vehicles: Cost Analysis
Are they really that expensive?
The common preconceived notion of an EV is that there is little choice, they are all expensive and cannot go very far on one charge. Let’s tackle some of those myths and look at what good an EV can really do.
There are now over 35 plug-in vehicle models on sale in the UK that qualify for the OLEV Plug-in Car Grant; so there is some variety. Are they eye-wateringly expensive though? Well we took a look at some numbers. Taking the most common EV in the UK (Nissan Leaf) and comparing it to the most common car (Volkswagen Golf, which helpfully has a petrol, diesel and hybrid in the range). In terms of list price, a diesel golf and a Nissan Leaf are very comparable, yes the popular petrol model is a little cheaper, but the hybrid is significantly more expensive.
Then the running costs kick in, servicing and maintenance costs etc for EVs are very similar to that of ICE vehicles, so the real differences lie in the fuel consumption. Sorry Volkswagen, we had to ignore your values for MPG and emissions! Instead we looked at real world feedback on MPG and scaled the emissions claims accordingly (this information is likely to be improved with the implementation of the WLTP on all new vehicles). Other assumptions included 8000 miles per year, 85% home charging (15p/kWh) and 15% paid for rapid charging (40p/kWh), a £4250 battery replacement every 8 years (Nissan) and fuel prices as of July 2018 (AA). The conclusion is that using an EV is more cost effective (under these assumptions) in the long term (>3 years).
In terms of emissions, we have considered both the refining of petroleum-based fuels and the tailpipe emissions, using a grid average 205gCO2/kWh and 20mgNOX/kWh for 2018 and following BEIS Energy and Emissions projections for subsequent years (link). In terms of emissions the EV is in a different league; only the CO2 emissions are shown on this chart, but the NOX emissions follow a similar trend. Not to mention lower particulate matter from EVs, not only through the lack of tailpipe emissions but also less brake dust due to regenerative braking.
So, EVs are cost competitive with ICE vehicles. Perhaps if you are doing low miles on a two- or three-year finance scheme a petrol vehicle is more effective for you, but it does come with significantly increased emissions. Battery technology is constantly evolving and reducing the costs of EVs; it would be interesting to return to this analysis in 12 months' time. There are also the other intangible benefits that we haven’t factored in, such as congestion charges and parking charges which are often free or heavily reduced for EVs. Moreover, with a greater uptake of renewable energy the grid is emitting fewer and fewer greenhouse gases resulting in even lower emissions.