Why it’s still cheaper to run an electric car – despite rising electricity prices

It won’t be news to anyone that energy prices are rising in 2022. Gas and electricity bills are set to go up by an average of some £700 for many households in the UK, in addition to tax hikes and increases in food prices. 

There’s no way to soften the fact that this is bad news for everyone, but how will the price rises affect the running costs of an electric car (EV)? Here, we’ll take a look at what it’ll cost to run an EV after the April 2022 price rises.  

Why have energy prices gone up? Will they continue to rise? 

Energy prices in the UK are governed by government body Ofgem, which sets a default tariff price cap in April and October each year. This dictates the maximum price that energy providers are allowed to charge for their default variable tariffs. 

The price cap is, of course, largely dictated by wholesale energy costs, which have now risen sharply. 

According to a spokesperson for Octopus Energy, prices have risen “due to a combination of several factors. Two of the main causes – global supply chain issues post-pandemic and long, late and cold winters in Asia and Europe last year – are likely to be temporary, so we are expecting them to normalise over time.

“However, the third main cause – the Russian invasion of Ukraine – has had the biggest impact on the global energy market. It is affecting Russian gas imports into Europe and the uncertainty is also throwing market prices for gas sky high, in turn impacting electricity prices and overall energy bills.” 

Gas has seen the biggest rise, with prices per kWh rising from 3.9p to 7p from April this year, according to Ofgem. Electricity will rise from 18.9p per kWh to 28p per kWh. It’s worth noting that there are still off-peak tariffs available, such as Octopus Go, EDF Go Electric and various others, who offer much cheaper costs of about 7p/kWh overnight. 

How much will an EV cost to charge at home? 

You can calculate how much an EV costs to charge by multiplying your electricity price per kWh by the usable battery capacity of your car. A Peugeot e-208, for instance, has a total 50kWh battery but only uses 46.2kWh of this (all car batteries are slightly limited in the interests of longevity), so 46.2kWh multiplied by your utilities price per kWh. So, at 20p it would cost £12.94 to “fill up” a Peugeot e-208 from empty – up from £8.73. 

The Kia e-Niro has a longer driving range courtesy of a usable battery capacity of 64kWh, so a full battery would cost £17.92, up from £12.10. The Mercedes EQS has one of the biggest batteries currently on sale, at 107.8kWh, and would cost £30.18 for a 100% charge. 

It’s well worth shopping around for those EV-specific or low-cost overnight tariffs that are still around (albeit harder to come by than before). Many drivers will be able to get all the charge they need by routinely charging for a few hours each night, and can therefore cut those EV fuel costs by more than 70%, with some tariffs still offering electricity for as little as 7p/kWh. 

How do EV costs compare with petrol and diesel?

Even if you don’t utilise cheaper overnight electricity rates, at 28p/kWh, an electric car doing 3.2 miles/kWh (roughly speaking, a realistic real-world efficiency expectation for an EV such as the Volkswagen ID.3, Peugeot e-08, Tesla Model 3 et al) still works out at 8.75p per mile to fuel. With petrol and diesel prices also higher than before, that’s compared to just under 19p per mile for a petrol car doing 40mpg on fuel costing £1.66 per litre, or 15p per mile for a diesel car doing 55mpg with pump prices of £1.79 per litre. 

That means that it’ll cost £875 for an average electric car doing 10,000 miles. Or, if you routinely charge overnight on a cheap tariff of 7p/kWh, you can cut those costs to as little as £219. 

That compares to £1,900 for our example 40mpg petrol car, and £1,500 for a 55mpg diesel car; a drastic potential fuel saving, by any measure.

How much will an EV cost to rapid charge? 

Public charging has always been more expensive than charging at home, and the rapid charging network has also seen big price rises for 2022. Most public charging networks have raised their rates, but it’s most telling on rapid chargers of 50kW or more, which now typically cost 50p/kWh or more where they were closer to 35p/kWh some 12 months ago. Prices do vary, of course. 

Ionity charges 69p/kWh at its 350kW ultra-rapid chargers – which is actually unchanged from what it’s cost for some years, but it is still the most expensive rapid charging network, if also one of the fastest. Osprey has a flat rate of 40p/kWh and is one of the cheapest networks to rapid charge at, while BP Pulse has raised prices to 50p/kWh for its 50kW chargers and 55p/kWh for its 150kW ultra-rapid chargers. 

Most providers also offer preferential rates for subscribers, which can save up to 15p/kWh, so it’s often worth signing up and paying a low monthly fee to get cheaper electricity from any public charging network that you routinely charge at.

Sticking with 50p/kWh as an average price for contactless payment, non-subscription rapid charging in the UK, a 30kWh top-up (enough for a 20-80% top up of a 50kWh battery) will cost £15. At 3.2miles per kWh, that’s just under 16p per mile. 

Essentially, with these rapid charging costs you’re paying a similar amount per mile as you would for a petrol or diesel car. 

We need to talk about EV efficiency… 

Which is a good place to stress the importance of electric car efficiency. Until now, the disparity in efficiency between EVs has been easy to gloss over as the fuel cost disparity between a performance EV and an everyday EV has been fairly low – especially compared with the running cost disparity between a performance or efficiency-focussed internal combustion engine (ICE) car. 

With electricity prices now going up, the difference in cost between “fuelling” a big, high-powered EV and a smaller, more modest EV are growing. 

EV efficiency is measured in miles per kWh (abbreviated to m/kWh). Think of this figure as mpg for electric cars. To state the obvious, m/kWh is literally a measure of the number of miles that the car is covering per kWh of battery capacity. Hence the higher the number, the more efficient the car is. 

Going by official WLTP range figures, some of the most efficient cars you can buy today include:

Fiat 500e 24kWh at 5.5m/kWh

Tesla Model 3 at 5.4m/kWh

Hyundai Ioniq at 5.0m/kWh

Hyundai Kona Electric 39kWh at 4.8m/kWh

Renault Megane E-Tech at 4.7m/kWh

Many of these cars are very aerodynamic – particularly the Tesla and Hyundai Ioniq – and some simply don’t focus on performance as much as many other EVs. All have single electric motors, so have only two driven wheels. Many also have fairly small batteries, which keeps weight down; weight will always be the ultimate enemy of efficiency. It’s also another reason to wait eagerly for batteries to continue getting lighter and more energy dense… 

Regardless, if you go for one of these efficient EVs and manage to return 4.0 miles/kWh in real world use (it’s quite reasonable to expect better than this in summer, when batteries benefit from warmer operating temperatures), then you’ll be paying some 7p per mile, assuming you charge at home for 28p/kWh. That compares with nearly 9p in an EV doing 3.2m/kWh, or around 12p in an EV doing 2.4m/kWh – a realistic expectation for bigger and higher performance EVs, such as the Audi e-tron. 

In essence, looking at EV efficiency can help to save you money, too, and going for one of those more efficient electric cars can see your fuel costs at 10,000 miles per year coming in at £700. Or, if you use an off-peak tariff of 7p/kWh, you could see that drop to as little as £175 for 10,000 miles of driving.

The savings will, of course, be much greater if you regularly rapid charge. At 50p/kWh from a rapid charger, our efficient 4.0m/kWh EV will cost 12.5p/kWh, while a high-performance EV averaging 2.4m/kWh will be 21p per mile, or £625 versus £1,042 for 5,000 miles of “rapid charged” miles. 

So, is it still cheaper to run an EV? 

In short, yes. While EVs will inevitably become more expensive to charge as electricity prices rise, so do petrol and diesel cars as oil prices rise. As for other running costs, EVs are becoming more affordable to buy, especially on leasing and finance deals while some, such as the MG 5 and Skoda Enyaq iV, are virtually on parity with petrol or diesel equivalents. 

Used EVs also typically hold their value very well – better, in fact, than comparable ICE cars. Great if you’re selling, as depreciation is still often the highest cost of owning a new car. It is, however, less ideal if you’re buying used, but look to options such as the BMW i3, Renault Zoe and Hyundai Ioniq for some of the best used electric cars. 

Insurance costs and tyre costs are also very similar. Servicing tends to be needed less frequently and is sometimes cheaper than for ICE cars (although this isn’t the case for all manufacturers).

Have a look at our article on comparing an electric Vauxhall Corsa to a petrol Corsa for a more detailed comparison on whole life costs of running an EV compared to an ICE. 

Suffice to say that, for now, an EV remains far cheaper to run than a petrol or diesel car, despite the rise in energy costs. 

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