The rising cost of living is having an impact on us all, with soaring food and energy costs hitting households in the UK. The Bank of England is warning that inflation could reach 10% by the end of the year, with the Consumer Price Index inflation in the UK already reaching 9% in May, the highest it has been for 40 years.
Chancellor Rishi Sunak announced in May that there would be a £400 energy grant to help households with the cost of living crisis. In his Spring Statement in April, he announced a 5p cut in fuel duty, but in reality, this has made little impact for the majority of motorists. Many of us are looking to reduce our bills, especially those who own petrol or diesel cars with fuel prices at the pump reaching a record high.
Naturally, there is sharp upwards trend for the demand for fully battery electric cars (BEVs) and plug-in hybrids (PHEVs). But can switching to an electric vehicle really help the average car owning household to save money, especially with energy prices rising too? The answer to that, is ‘yes’ in many cases.
It’s important to weigh up all the facts. Electric cars are typically more expensive to buy than their traditional fossil-fuelled counterparts, so the initial outlay is greater. The reason for this, is that electric cars require more expensive technology and batteries, making them quite different to an internal combustion engine (ICE) vehicle. Industry data suggests that there are an increasing number of used EVs becoming available too. Auto Trader recorded a 65% increase in used EV advert views in Q1 of 2022. Although buying an electric car may be preferential, leasing an EV could be another avenue to explore.
Although EV’s may be pricier, there are many cost-saving advantages that can help to claw back any initial upfront costs.
Fully electric cars mean the end of expensive petrol and diesel, no more filling up at the pump! This is, of course, one of the obvious paths to saving money; the one that every prospective EV owner considers first and foremost. It’s not surprising. If you take the average cost of charging an electric car at around £15, providing in the region of 200 miles range, and then compare this to the current price of petrol which is currently (June 2022) around 168.67 pence per litre and 181.15 pence per litre for diesel, then it becomes apparent how savings can be made in fuel costs. And the more miles you normally drive, the greater the potential savings can be, especially when this is calculated over a longer period of time.
But, electricity prices, like other forms of energy, are rising sharply too and will vary according to the provider, and tariff. That is where the electric car owner can be savvy in how and when they charge their vehicles.
Most EV owners (subject to premises and the availability of off-street parking) invest in a home charge point. The increasing popularity of electric cars has also led to an ever-growing number of companies offering home charge point installation services. When you consider that there are an estimated 460,000 EVs currently in the UK and around 300,000 home charger points installed, it is not difficult to see how the EV charging installation business is fast-evolving (source: Volkswagen Financial Service report).
EV charge point installation costs vary according to the supplier, and the level of electrical work required. You may need to upgrade your household electric to safely cope with the additional power requirements for the charger, which inevitably leads to a higher costs. Some chargers can be solar powered (ideal if your home has solar panels) which has the added environmental and economical benefit of using totally renewable energy. It is also worth investigating whether you are eligible for a government grant, to offset some of the costs, especially if you rent a house or flat. The EV Chargepoint Grant introduced in April 2022 may be of assistance. For businesses, there is the Workplace Charging Scheme, details of which can be found on the UK government website.
So, let’s go back to the rising cost of electricity and the most economical way of charging your EV.
Charging overnight during off-peak charging times is more economical. Smart charging can also be beneficial, with intelligent energy tariff integration. This, in simplistic terms, enables your car to communicate with the grid, taking electricity when demand is lower (such as during the night) or when there is plentiful renewable energy on the grid. In other words, charging at off-peak times when energy rates are cheaper. To ease the stress on the national grid and in light of rising electricity costs, all new home chargers after 30th June 2022 will legally require smart functionality.
For those who don’t, or can’t, charge their EVs at home, the cost of charging a car is higher. For a start, domestic electric supply carries 5% VAT, whereas public chargers have a VAT rate of 20%. That’s a big difference. And, the faster the charge, the more expensive it can be. There are some free public EV charge-points around the UK. Some supermarkets have introduced this, allowing customers to charge their cars while they shop. The same applies to some workplaces. It’s a good way of topping up your EV and taking advantage of some free electricity. It is worth remembering that EVs have regenerative braking so driven in the right manner, can actually harvest ‘free’ miles to extend the range.
Aside from energy, there are other cost savings to be gained from owning an EV. Road tax is charged based on a scale of CO2 emissions. There is currently no road tax to pay on zero-emission cars, so this is another way that owning an EV can be more economical. Plus, if your EV is a company car, there are (BIK) tax advantages over an ICE vehicle. And then, there are other potential savings too, when driving in Congestion Charge Zones, or Ultra-Low Emission Zones.
The potential for reducing the cost of car ownership continues. Routine maintenance and servicing costs for an EV can be considerably less than combustion engine vehicles, with no requirement for such things as engine oil changes. As an electric car has less parts than a vehicle with an engine, so there is effectively less to go wrong! That does not mean that there won’t be any maintenance required – tyres wear more quickly on electric vehicles because of the weight of the battery and the faster acceleration. EVs still need to be serviced but the intervals may be longer. The most expensive part of an electric car is the battery, and the lifespan of a battery can vary depending on a variety of factors. Anyone considering buying an EV should spend a bit of time doing some research about batteries. They cost thousands of pounds to replace so it is wise to know about battery warranty and insurance cover.
Taking all these factors into consideration, there are many benefits and cost-savings associated with EV ownership, while also supporting the greater goal of reducing air pollution and protecting the environment.
For all your home charging assistance, please contact EVIOS. Our mission is to simplify EV home charging and make the process as ‘smart’ as possible through intelligent energy tariff integration. An easy, intuitive mobile app gives you total control over your vehicle charging status with pin code access for added security.
EVIOS One Charge Point is compatible with all EVs and has three different charging modes to control charging preferences – Pure Speed (for fast charging), Pure Green (utilising renewable energy) and Pure Value (identifying the lowest cost charging through connection to the energy tariff). EVIOS One can be solar integrated – ideal for those who have solar panels installed at home. EVIOS offers a professional EV home charge point installation service to EV owners nationwide.