Is cost really a barrier to EV ownership?

Electric Vehicles (EVs) are expensive, right?

The cheapest Tesla is over £40k in the UK and more like £60k once you’ve specified a big battery and the autopilot that everyone talks about. That puts the brand firmly in the luxury category and out of the reach of Mr and Mrs Average. Great cars, but not for the masses.

However, I’ve also heard from friends who are EV owners about the cost savings they claim to have made… and some of these people don’t look that rich to me. So I wondered, what’s the reality?

In this post I’m going to compare some cheaper EVs, and see where the truth lies. Are EVs expensive trinkets for the rich, or are they a realistic prospect for Mr and Mrs Average?

Note: The analysis in this post is based on the situation in the UK. Finance, fuel, energy and tax all vary in different countries, so your mileage may vary. If you’re based elsewhere, perhaps the methodology and calculations are ones that you can use, updated with local numbers.

Firstly, let’s look at some cars that Mr and Mrs average might consider. I’m going to take two example internal combustion engine (ICE) cars that are both popular in the UK and have equivalent EV models with which we can easily compare them. These two models are the Mini and the VW Golf. Nice cars, no doubt, but nothing too exotic and the kind of metalwork that won’t get the neighbours whispering about where your money comes from.

The equivalent EV models that I’m going to compare them with are the Mini Electric and VW id.3.

But we need to decide which precise models to compare. Here are my choices…

🚗 Mini Electric Level 1 v Mini Cooper S 3-door automatic. There is only one Mini Electric, which is a 3-door model — the only real mini to true fans! I’ve chosen the Level 1 spec as it’s the cheapest and really, I don’t see anything I need in higher levels. The Mini Electric is pretty nippy and its closest comparison in the petrol range is the Cooper S, which gets the “power bulge” on the bonnet to match the Mini Electric’s. All electric cars are auto, so I’ve gone for the auto Cooper S. Even in it’s lowest Level 1 form, Mini Electric is quite well specced, so I’m going to add the Comfort and Navigation packs to the Cooper S in order to even out the comparison. I’ve driven both petrol and electric minis and they are small, but great fun — these are the driver’s choices.

Mnin Electric

🚙 id.3 58kWh Life Pro v Golf 8 Life 2.0 TDI automatic. I’ve picked the 58kWh Life Pro id.3 because it has a perfectly decent level of kit and the 58kWh Pro battery/motor combination gives the longest range (about 260 miles). There are faster models in the range and whilst this one’s 0–60 of 9.6 seconds isn’t going to set the world on fire, it’s also perfectly adequate as a family run-around — which is what most Golf and id.3 owners are looking for. As a comparison, I’ve picked the automatic Golf 8 Life 2.0 TDI. Decidedly mid-range and with an automatic gearbox to match the id.3. With a 0–60 time of 10.4 seconds, this Golf is actually slower than the id.3 I’m going to compare it with — one of the benefits of going electric is that the cars tend to be faster. Spec-wise, they looked similar to me.

VW id.3

🤜 Let battle commence! 🤛

I’m going to look at acquisition, fuel and tax, as these are the major components of ownership cost.

I’m omitting maintenance costs, as it’s very hard to find accurate numbers for this — VW doesn’t seem to provide service costs for the id.3 yet, for example.

We can assume there’s an advantage to electric cars on maintenance, as there’s no oil/filter to replace each year and a “service” is more akin to an “inspection”. But, it’s difficult to quantify this accurately, so the ICE cars get a bit of an advantage from maintenance being excluded from my analysis.

First off, let’s look the price of putting one of these cars on our driveway.

Note: both the Mini Electric and id.3 prices below include a UK government grant of £2,500 which is available to all EVs with a list price of under £35,000.

Looking at list prices, we see:

  • id.3 Life 58kWh at £28,435, versus Golf 8 Life 2.0 TDI auto at £27,045
  • Mini Electric Level 1 at £26,000, versus Mini Cooper S auto at £25,805

Well, this is interesting! The electric cars are slightly more expensive, but only very slightly.

Now, most of us don’t walk into a dealership and write a cheque for this kind of money, but instead sign up to some form of finance deal — probably either a PCP or a Lease. I’m going to look at lease costs, because they’re easy to compare by using LeaseLoco.

All the deals I got to make this comparison are 4-years, 10,000 miles/year, with 3 months up-front.

Here’s what I got:

  • id.3 — £286.27, versus diesel Golf — £303.86
  • Mini Electric — £266.68, versus petrol Mini Cooper S — £284.60

Well, now things are getting very interesting — both electric cars are slightly cheaper than their petrol/diesel equivalents. This, presumably, indicates that lease companies expect higher residuals from electric cars.

Winner: EVs, by a small margin.

The next big component of cost is the cost to fuel these cars.

How much it costs to charge an EV can vary quite considerably. At the lower end, I can use a slow public charger that’s free or if I’m on an Octopus Go home energy tariff, I can pay just £0.05/kWh to charge my EV overnight. At the upper end, charging at a motorway Ionity fast charger when I haven’t signed up to a package will cost me £0.69/kWh (EV charging plans, like VW We Charge, bring that down to just £0.26/kWh).

To make things easy, I’m going to assume that my average charging costs work out at £0.20/kWh. For some this might be pessimistic and for others optimistic. I think, however, that it’s probably a decent stab at how things average out for a lot of people.

Calculating the cost to charge my two electric cars is a simple matter of multiplying the cost/kWh by the size of the battery, which gives us the following:

  • id.3: 62 x £0.20 = £12.4
  • Mini: 32.6 x £0.20 = £6.52

To fill the fuel tank on the ICE equivalents is going to cost me:

  • Mini Cooper S, with a 40L tank and petrol at £1.362/litre = £54.48
  • Golf, with a 50L tank and diesel at £1.378/litre = £68.9

The electric cars are starting to look extraordinarily cheap to run at this point!

But, of course, these numbers don’t tell us how far we’ll be able to travel. To get an accurate comparison we need to work out the cost/mile, which takes into account the efficiency of the cars and how far they can travel on a given amount of fuel/energy.

EV efficiency is commonly measured in Wh/mile, which is a measure of the amount of energy consumed to drive one mile — the lower the number, the better. Wh/mile numbers are published for each model, in just the way that mpg numbers are for ICE vehicles.

Now Wh/mile is useful, but what we really need to know is how far we can drive on one kWh of energy, because that’s how energy is priced. If we know that, we can work out how much it’ll cost us to drive a typical 10,000 miles/year.

To calculate this, we need to do the following:

  • Divide the Wh/mile figure by 10 to convert it to kWh/mile
  • Divide 1 by that result to get a figure in miles per kWh

EV Database rates the id.3 real-world consumption at 265 Wh/mile and the Mini Electric at 250Wh/mile — both pretty respectable numbers (a Mercedes EQV is rated at 450 Wh/mile). Using the above calculations, this gives us:

  • Mini: 0.04 miles/kWh
  • id.3: 0.038 miles/kWh

If this is all a bit too much work, Leaseplan have a handy calculator that does all the hard work for you.

Based on the above numbers we can calculate that a year of 10,000 miles will cost us:

  • Mini: £500
  • id.3: £526

The id.3 is a bigger car, with a bigger battery — so it’s natural that it requires a little more energy to move it around.

In comparison, assuming we can achieve on average Honest John’s real mpg figures for our ICE cars, we could calculate the following costs for fuel over 10,000 miles:

  • Mini Cooper S at 36.2mpg and petrol at £1.362/litre: £1710.
  • Golf 2.0 TDi at 49mpg and diesel at £1.378/litre: £1278.

Winner: EVs, by a wide margin.

Electric cars attract UK road tax of £0. They’re also exempt from the London Congestion Charge, which might be a significant factor to those driving in London, as that’s currently £15/day.

For those of us not driving in London, the tax comparison is as follows:

  • 4-year cost to tax a new Golf: £490, versus id.3: £0.
  • 4-year cost to tax a new Mini Cooper S: £865, versus Mini Electric: £0.

Winner: EVs, by a wide margin.

Let’s summarise what we’ve found and compare the total cost of ownership of these cars over 4 years.

Our Golf / id.3 comparison:

Cost item        VW id.3           VW Golf 
Lease (3+48) £14599.77 £15496.86
Tax (4 years) £0 £490
Fuel (4 years) £2104 £5112
TOTAL £16703.77 £21098.86

Our Mini Cooper S / Mini Electric comparison:

Cost item        Mini Electric     Mini Cooper S 
Lease (3+48) £13600.68 £14514.6
Tax (4 years) £0 £865
Fuel (4 years) £2000 £6840
TOTAL £15600.68 £22219.6

I think the message is pretty clear. These EV’s are cheaper than their petrol/diesel equivalents.

Of course there’s some variability in terms of how an individual uses their car and this will impact my calculations.

I like the phrase “there, or there abouts”. For me, that sums it up. Perhaps you’ll frequently charge at the office on a free charger and save even more. Or, perhaps you’ll need to make more use of expensive motorway fast-chargers and save a little less — but it would have to be a very extreme charging pattern to make the EV more expensive than its ICE counterpart.

If you buy a new car like a Mini or a Golf every few years, price no longer looks like a reason not to switch — the equivalent EV is almost certainly going to be cheaper.

So why is there an impression that EVs are expensive? Very simply, I think it’s much more exciting to talk about the latest £80,000 self-driving super car, than it is to talk about a Golf replacement. There’s also comparatively fewer EV models at the bottom of the market — most manufacturers have been perfecting their engineering and supply chains with more exotic, lower-volume models. However, things are changing — with EVs moving from the exotic play things of the rich, to being a viable option for Golf and Mini drivers.

From what I’ve observed, I’m very optimistic about EV costs. As we’ve seen from this analysis of switching from an ICE Mini or Golf, it’s already possible to get a roughly equivalent EV and save money. Lower cost cars are coming — keep an eye on the Chinese — and the second hand market will inevitably start to pick up once EVs work their way through to second, and third, owners over the next few years. Maybe there isn’t an EV equivalent for your current ICE car yet, but new models are launching all the time — it’ll come.

Eclectic tastes, amateur at most things. Learning how to build a new startup. Former CTO for IBM Watson Europe.