It's safe to say that the future belongs to the machines.
Nope, not like in the Terminator series thankfully. We're talking of course about the rise of electric cars.
Question is: if the government keeps telling us how good they are for both us and the environment (which is very true), then why are they still so expensive?
Up-front Cost
There's no disputing it: the outright initial cost to lease an electric or a hybrid car is higher than that of a petrol or a diesel car. One brief look at the monthly payments confirms that.
But why is this?
Battery Technology Comes at a High Cost
Well, the main reason is that electric cars are simply more expensive to make and produce. Electric cars are produced in small quantities using newer, pristine technology.
Supply and demand, folks.
And because the technology keeps on changing and improving, batteries used on the first electric cars need to be updated.
We won't go too much into the science behind it, but in case you're wondering: there are currently two types of battery available on the market. Disposable and rechargeable. Disposable batteries are zinc-carbon and rechargeable batteries are alkaline-based.
Cars Using an All-electric Motor are Still new to the Market
Another reason why electric cars are more expensive is because the market is fairly new and the scope and appeal of these cars can still be quite limited, so their price point remains a challenge for companies seeking to control their supply, making it difficult to cater to customers.
Long story short: because EV technology is fairly new, it's still continuing to be honed and perfected.
Limited Electric Car Supply Doesn't Meet the High Demand in the Market
Related to that point, the number of people seeking to drive electric cars is greater than the number of available manufacturers and machinery, thereby affecting cost and driving up the price tag of electric vehicles. The manufacturing of lithium-ion batteries, for example, takes 18 months in total. If manufacturers were able to think of other ways to speed up the manufacturing process, this issue could be resolved sooner.
Cheaper Long-term
Yes, electric vehicles may on average be more expensive to lease or buy, but when you factor in refuelling costs, maintenance, tax, insurance and everything else, the overall expenses can be lower. So you might actually end up saving money in the long run.
We'll be going into some more detail on this, including why:
-
Charging an electric vehicle can be cheaper than filling up with petrol, especially if you charge at home
-
Electric vehicles are exempt from the standard road tax imposed on petrol and diesel cars
-
Because they have fewer moving parts, electric vehicles require less routine maintenance
Electric Car Battery Costs
The first bit of good news is that you don't pay for the battery, and they're generally very reliable.
Electric car batteries can be expensive, often to the tune of thousands of pounds. But most if not all electric vehicles will come with this as standard and you won't need to pay extra for it.
Electric car batteries should last at least 10 years (with some lasting up to 20 years) and come with good guarantees. For example, Renault guarantees its batteries for eight years or 160,000km. Most batteries are designed to maintain optimal performance over at least 1,000 full charge cycles, so you probably won't need to replace one for years to come. Further to this, the price of electric car batteries is dropping as technology continues to improve and production costs reduce.
Are Electric Car Maintenance Costs More Expensive?
Because they have fewer moving parts and therefore less that can go wrong in terms of wear and tear, electric cars are generally cheaper to service and maintain than their petrol and diesel counterparts. An internal combustion engine (petrol and diesel) drivetrain can contain over 200 moving parts, whereas a Tesla Model 3 drivetrain has only 17 moving parts.
Electric cars also don't need oil changes or changes on other items that can be expensive to replace. And luckily, there's a good chance that you'll be able to prolong the life of your brake pads/disks by making use of regenerative braking or 'one pedal driving' (like in the Nissan Leaf). What this does is use your motor as a generator, converting kinetic energy into electrical energy rather than waste heat energy (produced by friction brakes) which would typically degrade your brake pads over time.
Electric Car Service Cost
Although servicing costs are usually lower because there's fewer things that can go wrong. However, when something does go wrong, repairs can cost more because the technology involved is more advanced.
When you take your electric lease car in for servicing, the chaps will generally focus on ensuring that the battery and electric drivetrain work as intended. The charging cable will often be checked for damage, tears and performance, whilst the battery will be checked for its ‘State of Health’ (the amount of charge the battery can currently hold compared to when it was new).
How Much Does it Cost to Charge an Electric Car?
Probably the question you're most concerned about, as charging is the bread and butter of an electric car, just like petrol is for a petrol car.
We wouldn't exactly say charging is cheap, but if you're charging at home or with a fast charger, then it's usually less expensive to charge an electric car than to fill up a tank with petrol or diesel.
Important point: the cost to charge depends upon the charge point network or its locations and the charging method.
Public Charging Points
A rapid public charge point costs 23 – 24p/kWh with an average of £6 - £7 for 30 minutes of charging for 100 miles of travel. The cost of public charge points can depend on power rating and whether it is rapid or slow. Rapid charging points can be found mainly in motorway parking lots and are sometimes free, but they can usually be considered the most expensive option.
Good news if you drive a Tesla, because the Tesla Supercharger Network offers charge points across the UK which are often free to use for older vehicles. On the other hand, newer Tesla drivers who bought or leased their vehicle after January 1st, 2017, may only receive a set number of free charging hours. But that's still better than nothing.
Did you know: The UK government has announced that it will be "providing £500 million over the next five years to support the rollout of a fast-charging network for electric vehicles, ensuring that drivers will never be further than 30 miles from a rapid charging station.".
Cost of Charging an Electric Car at Home
Charging from home works out to be the least expensive.
A large number of electric drivers use home charging as the main charging method. The cost of charging will be included in your normal electricity bill, and exactly how much that cost is will depend on your charging capacity.
It usually costs in the region of £1000 to install a home charging point in the first place, but that can be reduced by up to 75% if you make use of the government's EV chargepoint grant which we'd strongly recommend. Don't say they're not good to you!
Electric Car Insurance
Electric vehicle insurance is usually more expensive as electric vehicles are bracketed among the higher insurance groups. That's because insurance is determined by the car's value, possible repair cost and the total cost involved in making the vehicle. And as we mentioned earlier, electric cars are very expensive to make.
For example, the average insurance cost for a non-electric Audi A6 is only £960.83 per year. That's half the cost of a Tesla Model 3 at £1,718. Mind you, a Tesla is fairly high up the scale of EVs in terms of quality. Most other electric cars will be less than that, but probably still higher than an Audi A6.
Bear in mind though that it isn't always the case that an electric car has more expensive insurance than a petrol or a diesel, so be sure to shop around and compare insurance quotes on individual models to find the best price. Even more so given that insurance costs are becoming more competitive as electric and hybrid cars continue to see a rise in popularity.
Electric Car Tax
Good news: if you drive an electric vehicle, you are exempt from paying Vehicle Excise Duty (i.e. road tax) altogether, whilst if you drive a hybrid, you'll pay a cheaper rate than petrol and diesel drivers. That's especially the case given that changes to car tax made in April 2020 meant petrol and diesel vehicles would be paying a lot more in tax – further incentivising drivers to make the switch to electric.
Vehicle tax rates are based on carbon dioxide emissions, so the reason why electric and hybrid vehicles pay less tax is because they produce less or zero emissions when out on the road.
- However, from April 1st, 2025, all fuel types will move to paying a standard rate of road tax, so you only have two years left to enjoy not paying any road tax.
Will electric cars always be more expensive than petrol?
Probably not.
Again, it comes down to a simple case of supply and demand, and as the supply becomes greater as the technology gets better, the demand will be met more and lessened, evening out the price. Electric cars are already more affordable than they were five years ago, so as the technology continues to develop and become less niche, prices will only continue to go down. Which is good for you!
Expect the electric vehicle market to see an especially big expansion following the upcoming ban on the sale of new petrol and diesel cars in 2030. That means more second-hand EVs will be ready for sale, with greater supply driving prices down.
Summary
Electric cars might have more expensive monthly lease payments, but they're less costly to run and maintain than standard internal combustion engine (ICE) petrol and diesel vehicles, especially if you're using a home charger and even more so if you are using free public charging. So it's important to think about the bigger picture rather than just the up-front cost. Depending on your lifestyle and how much you plan to use your electric car, it very often works out cheaper altogether.
You can always check out our list of the top 10 cheapest electric cars to cut down the price even more.
That's all from us, amigos. Happy (electric) leasing!
FAQs
Are electric cars overpriced?
No, as the prices are an accurate reflection of the market and the cost involved in producing electric vehicles.
Do electric cars have gears?
Because the majority of electric vehicles only have a single-speed gear that regulates the electric motor, they don't need to have a clutch or a sequence of gears.
What's the downside of having an electric car?
The downsides include higher lease prices, charging times and having to search for charging stations. That's in addition to limited driving ranges (the number of miles you can go on a single charge) and difficult-to-replace batteries.
How much more expensive are electric cars than petrol?
It varies, but the monthly payments are usually more expensive, whilst the running costs can be less expensive, depending on how much you drive and how you charge it.