Electric cars already cheaper to own for four in five UK drivers, says industry report - here's how much it says you could save

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Switching to an electric car will be a better financial decision for 80 per cent of drivers as battery vehicle ownership is already 'much cheaper than public perception'.

That's according to campaign group Electric Vehicles UK after commissioning an in-depth report into EV running costs in Britain in 2025.

It considered total cost of ownership for 50 different EVs across 480 scenarios representative of living and driving situations for motorists across the country. 

It also accounted for how EVs are acquired - whether the car is purchased, financed or leased through popular salary sacrifice schemes available through employers - as well as how and when drivers are likely to charge them.

On average, it concluded that 80 per cent of Britons would find an EV cheaper to own than a petrol car. And the average saving over a typical ownership period is £5,850.

Experts backing the study say the report 'shatters long-held myths' that the premium price of battery cars cannot be offset by cheaper maintenance and servicing costs.

However, not all instances showed EVs to be the cheapest option.

For motorists living in properties without off-street parking, the saving benefits of running an EV is 'not always enough to offset the higher cost of public charging,' the report said.

Switching to an electric car in 2025 will be a better financial decision for 80% of drivers in the UK, a comprehensive new report has claimed

EVUK's study - in collaboration with think tank New AutoMotive - claims to provide 'definitive, data-driven analysis' of the total cost of battery EV ownership in the UK at present. 

The study considered all associated costs of running a new EV in 2025. This includes purchase price as well as outgoings on charging, servicing, insurance, taxation, and depreciation.

It measured this against three different annual mileage levels as well as whether drivers could or could not access cheaper charging via domestic energy tariffs.

The cost analysis was measured over a typical four-year ownership period and then compared against internal combustion engine (ICE) counterparts using the same mileage and fuelling criteria.

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'Customers who save will save on average £5,850 across the term of ownership for the 480 scenarios studied,' the report found.

It added: 'In 90 per cent of scenarios, consumers who can charge at home save by switching to an EV, compared to 58 per cent of scenarios where drivers rely entirely on public charging.'

Looking at new EVs only, tax incentives offered through salary sacrifice mean that for drivers charging mostly at home, savings occur in 97 per cent of cases with an average financial benefit over a petrol car of £4,700.

EVUK says electric cars will become even cheaper to own as we move closer to 2030 when a predicted decline in cost of batteries is said to bring price parity between EVs and ICE models before the end of the decade.

The study considers all associated costs, including purchase price as well as outgoing on charging, servicing, insurance, taxation, and depreciation for new models

The graphic shows how EV drivers will acquire their cars in 2025, where they;ll charge and how many will make savings, according to the report

The savings associated with choosing a used EV were even greater in some instances, it said, due to the lower cost of second-hand electric cars comparable to petrol models as a result of more rapid depreciation in the first 12 to 24 months. 

Thirty-five used EVs first registered between 2017 and 2023 were analysed against their ICE counterparts using the same mileage criteria, across an ownership period of five years. 

On average, an EV was £2,781 cheaper than its petrol equivalent. Notably, two battery models (26 per cent) were over £5,000 cheaper, and two models were more than £10,000 cheaper.

Commenting on the report, Ginny Buckley, TV presenter and founder on EV website Electrifying.com, said: 'Although the upfront purchase price of a new EV may be marginally higher in some cases, our comprehensive analysis reveals that lower maintenance and running costs can save drivers thousands of pounds over the vehicle’s lifetime. 

'In today’s economy, where every pound counts, it is essential to recognise that the real cost of owning an EV is far more competitive than many car buyers realise.'

90% of motorists who can charge at home will save by switching to an EV but  just 58% of those using only  the pricier public charging network will. As such, for more than four in five drivers in the latter scenario, a petrol car is still the better financial option

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The study said measures could be introduced to make EVs even more affordable in the short term.

The biggest of these is to bring down the cost of public charging, which is typically far more expensive than plugging in at home.

This is due to a combination of favourable domestic EV tariffs with extremely low rates during off-peak times, high standing charges of public operators and the 20 per cent VAT on public charging - which is four times higher than taxation on domestic electricity.

Matt Western: MP for Warwick & Leamington, and a former senior executive at Peugeot, added: 'It is of vital importance that the people of the UK are aware that, in most scenarios, electric vehicles save money, on top of improving local air quality.

'Cost of Driving Electric is a comprehensive piece of research that lays out the facts of owning an EV, and the benefits to the public, and the nation’s, pockets.'

He concluded: 'The evidence is mounting, for many EVs are the right solution.'