Does day-to-day savings driving an electric car worthwhile? How much mileage does it cost to buy an electric car? Are the fuel savings really that great? Let's find out and clarify all these questions!
Saying that electric cars are too expensive and inaccessible to a middle-class citizen is an argument still widely used by society, but the reality is that today there are electric models whose purchase prices are practically equal to their combustion equivalents. The new electric Seat Mii model from £19,800 and the Skoda Citigoe iV model from £17,455 are clear examples.
At Place to Plug we stand up for and want to demonstrate the real economic savings that an electric car brings. We know that the initial purchase is more expensive, yes, but its acquisition presents a whole set of economic advantages, thanks to which the initial price difference will be compensated much sooner than we imagine.
The initial price difference and the electric car advantages
Nowadays, the initial purchase of a conventional combustion car, both diesel and gasoline, is cheaper than that of an electric car. And this is due to two differential factors: for the materials that each one carries (mainly regarding the batteries) and for the economy of scale, since it is not the same manufacturing 1 million units than only 50 thousand.
Therefore, today what really makes electric vehicles more expensive are their respective batteries, which are very expensive both for the raw materials that make them up and for their production processes, which we can see reflected in the kWh average cost. In fact, during the first quarter of 2020, the kWh average price was $160. This would be equivalent, taking into account a 30-kWh battery, to an approximate cost of $5684,35.
However, the electric vehicle industry is constantly innovating and improving its production and manufacturing processes, with the aim of achieving electric cars at increasingly competitive prices regarding conventional combustion engines.
On the one hand, these innovations have allowed the evolution of the current lithium ion batteries to develop the new solid-state batteries, which will allow greater autonomy, greater security and stability, shorter charging periods and, above all, reduction of economic production and sales costs and an extended lifespan. As a result, once introduced in the market, the electric car savings will be even more relevant!
On the other hand, these innovations have also led to a decrease in the price of kWh, as we can see through the following graph provided by BloombergNEF.
As we can see, this year the kWh price is around $160; a price that, compared to previous years, has decreased notably, as in 2010 it was around 1,000 dollars. This means that, in a matter of 10 years, the kWh cost has fallen by 81.7% and, consequently, the initial purchase price of an electric vehicle has also dropped.
But the main electric car savings do not stem from the initial purchase price, but from its use and thanks to the many economic advantages it offers.
Benefits of electric cars at an economic point of view
There are a number of economic advantages that help us offset the initial investment in buying an electric car - let's find out them!
There are a lot of online calculators where we can see that the fuel cost, whether diesel or gasoline, is much higher than the one of electricity. Nissan even offers its own calculator so you can estimate the savings summary with the Leaf car.
The main reason behind this price difference is the high-energy efficiency provided by the electric car. To get an idea, driving 62mi with an electric vehicle involves 13 kWh and, in contrast, with a combustion vehicle with a consumption of 5L/62 mi, we would need the equivalent of 45 kWh of petrol, although this could vary depending on the vehicle size.
Actually, the average electricity price per kWh in UK is located in 14 pence (£0.14). However, depending on the time zone, the cost of the kWh can be up to 5p/kWh (0.05£/kWh) if the vehicle is charged at an off-peak rate which its off-peak hours may vary according to the company hired but range from 12:30am to 4am. And we can even contract free rates for the electric vehicle charging such as the one offered by SSE Energy Services. On the other hand, the cost of Unleaded 95 petrol is around 115 pence (£1.15) per liter and Diesel around 118 pence (£1.18) per liter.
The USA average price per kWh does not differ too much, as it is located in $0.1319, but fuel prices differ a little more as they are somewhat more expensive: Unleaded 95 petrol costs around $2.838 per liter and diesel costs around $2.429 per liter.
And in countries like Spain, the average cost of kWh is around 0.10€, but it can even be 0.08€/kWh charging at off-peak hours. On the other hand, the cost of Unleaded 95 petrol is around 1.17€/L and Diesel around 1.06€/L.
Therefore, the comparisons between the different countries are very equitable, since the prices of both kWh and fuel are quite similar.
So, if driving 62mi with an electric vehicle with an off-peak rate costs £0.65 and with a petrol car with a consumption of 5L/62mi costs £5.75, the electric car is almost 90% cheaper!
We will therefore make a comparison by taking into account the same vehicle with the same performance in both petrol and electric versions: the Hyundai Kona.
On the one hand, we have the Hyundai Kona Gasoline which is priced at around £18,250 and, on the other hand, we have the electric Hyundai Kona which is at a selling price of around £30,150. Wow! £11,900 difference!
But let's do numbers again, taking into account an annual mileage of 12,427mi. With the Kona petrol (let's say we have a non-aggressive driving and it consumes 7L/62mi), we will have an annual spending of £1,614. On the other hand, with the electric Kona the cost will be only £130, if we do not have a free rate for charging our electric car. Wow! Now the difference is also noticeable, right?
As it turns out, the electric one will pay for itself in less than 8 years! We already have one of the greatest electric car advantages, don't we?
But best of all, we are only considering one savings factor! Now discount the registration tax, the road tax, the maintenance, the parking fees... The electric car savings are being much bigger than you imagined, right? So keep reading, don't miss a single detail!
Vehicle registration tax (VRT) and road tax 🔌
The amount of registration and road tax to be paid for electric vehicles depends on each country.
Generally speaking, most European countries offer both registration and road tax discounts for all electric vehicles and even for hybrids, plug-in hybrids and hydrogen fuel cell vehicles.
Just to be more specific, today, discounts for electrically-chargeable cars are available in 26 out of the 27 EU countries, because Lithuania is the only state that does not provide any tax benefits or incentives at all. 20 EU member states offer incentives (such as bonus payments or premiums) to buyers of electric vehicles and 6 countries (Belgium, Bulgaria, Cyprus, Denmark, Latvia and Malta) do not provide purchase incentives, but grant tax reductions or exemptions for electric cars.
Nowadays, for example, countries such as Germany, France, Austria and Ireland offer amazing tax benefits and purchase incentives for electric vehicles.
And in both Portugal and Spain, zero emission vehicles do not pay registration tax. These are measures taken by governments to reward the purchase of electric or zero-emission vehicles such as hydrogen fuel cells, and to punish the purchase of hybrid, diesel and gasoline vehicles.
This is also influenced by another factor: the measurement of CO2 emissions from vehicles. Until recently, the protocol used was the NEDC (New European Driving Cycle), and this has been replaced by the new WLTP (Worldwide Harmonised Light Vehicles Test Procedure) protocol, which obtains more accurate results of pollutant emissions, as it certifies more real and reliable CO2 figures.
Thus, an NEDC-approved car with 130g/km of CO2 would go on to emit 160g/km of CO2 under the current protocol, with the result that in countries such as Spain or Portugal it would still pay a higher percentage of registration tax.
But in the United States, unfortunately, the situation is quite the opposite. In some states, electric vehicle owners are paying higher annual fees for driving zero-emissions cars than their petrol equivalents, according to new analysis by Consumer Reports. And that’s because of an effort to offset lost revenue from gas taxes.
“Of the 26 states that impose fees on electric vehicles, 11 charge more for an EV than an owner of a traditional gas-powered car ends up paying in gasoline taxes every year. Three of those 11 states charge more than twice the amount. Trends for the fees, generally paid through annual registration renewals, don’t look promising either. Another 12 states are considering their own EV fee proposals — seven of which would double over time”, according CNBC.
But (in the United States) it could definitely be a better way to recover lost gas tax revenue that might not dissuade consumers from going electric.
An electric vehicle has far fewer parts than a combustion engine vehicle. We are talking about a much simpler mechanical structure that does not require so many inspections thanks to the fact that there are fewer systems involved compared to their respective diesel or gasoline. This makes it possible to save at least 50% in the maintenance of an electric vehicle compared to a combustion engine.
There's no doubt that electric car savings are real, right? And just in case you still lack reasons...
It may be free in pay and display car parks, although this can vary depending on each town. The essential requirements to obtain this advantage are having the vehicle classified as 0 emissions, as hybrids are not always included in this type of discount.
This step is designed to promote the use of greener methods of transport and to reduce the carbon footprint, but parking will not be free in all cases, as it will depend on each individual city and the type of car park; whether it is a public or private one.
And in the case that we wish to park and charge our vehicle, we can pay for the parking and/or charging time period as well as for the kWh consumed. But we can even provide free charging at public charging stations!
In case you still doubt whether about day-to-day savings driving an electric car, we can still give you many more good reasons!
Charging points 📍
One of the great benefits of electric cars is that we can charge it every day from home, without having to drive to the nearest charging point, as we must do with combustion cars to find a gas station. We already have another of the great electric car advantages, don't you think?
However, in order to be able to charge the vehicle, we must first have a plug that complies with current regulations or install a charging point, either in our private garage or in a community parking. But precisely this is another factor where we can also obtain some economic bonuses.
The cost of installing the charging point will vary depending on whether it is a private or communal installation, whether the electricity supply comes from an own line or from the communal garage, the difficulty of installing the charging point, etc.
We will then make a calculation via the Repsol website of what it would cost us to install a charging point in different cases:
Single-family house: 15 metres distance between the protection panel and the garage: final price of $1468,75.
Community garage: we find the electric meter and the parking space on the 0 floor, with 15 meters of distance between the protection box and the garage: final price of $1748,96.
Government grants are available for the installation of home EV charge points, although this will depend on each country, and a large number of companies offer a fully installed charge point for a fixed price.
However, it is worth noting that some vehicle brands and manufacturers have sought to provide an extra value by providing facilities for the installation of the charging point:
Or by offering a closed sales price that includes a charging point and its installation free of charge, as in the case of Hyundai (Kona Electric includes the Level 1 charger).
Or by offering partnerships with charging point installation companies that result in lower costs for the customer.
In the latest case, a clear example would be the collaboration of the PSA group (Peugeot, Citroën, DS Automobiles, Opel and Vauxhall) with several installers in different countries.
Toll roads 🛣️
Electric cars are exempt from toll charges in most European countries or have discounts of up to 75% compared to combustion cars in order to push green mobility.
But not only in Europe, because “in the draft toll policy, NHAI (The National Highways Authority of India) has suggested that electric vehicles should be given 50% concession on toll rates, so that the government is able to encourage people to buy EVs,” a third official said.
In the United States, for example, there is the Green Pass Discount Plan that offers a 10% discount in cities such as New York and New Jersey at off-peak hour crossings.
What type of vehicle is the most economical according to its use?
One of the most general questions is what type of electric car is worth buying to make it as economical as possible. But the answer, although it may be surprising, is not the car model itself, but with which one of them we will have the greatest savings, even though the initial purchase price is higher. In other words, to know which is the most profitable electric car for us we must take into account the annual mileage we will make, in the same way as if we were considering buying a petrol or a diesel one.
Depending on the mileage you drive each day, it will be more worthwhile one type of electric car or another. Many users choose the option of buying a car with three-times the range of the one they usually drive every day.
- 6/18 mile route per day or a maximum of 6.213 miles per year
With a car with a short range, around 62 miles of range, it's more than enough. This type of car is more economical and therefore, with the mileage that will be made, it will become amortized in a few years. As an exemplary model, we have the Renault Twizy with 56 miles of autonomy and at a price of $11,895.
- Between 18/49 miles per day or about 9.320 miles per year
It is recommended to buy a car with a longer range of at least 142 miles, such as the Nissan Leaf (with the 40-kWh battery), which has 150 miles of range and costs around $31,600.
- More than 49 miles per day or more than 12.427 miles per year
It is worth choosing one of the models on the market today that offer the maximum range. On the one hand, they will be the most expensive models in terms of initial investment, since they are the ones with the most powerful batteries, but on the other hand, they can also be amortized in a few years taking into account the mileage and the use that will be made of them.
In this case, some exemplary models would be the BMW i3 with almost 200 miles of range at a price of $44,450, the Kia e-Niro with239 miles of range for $39,090, the Hyundai Kona electric with 258 miles of range (with the 64kWh battery) from $37,190 or the Tesla Model 3 with 322 miles of range for $40,690.
After all, the key to get the most out of the electric vehicle is to bear in mind how many miles will be driven on average per day and that the range it offers corresponds to real mileage needs, not forgetting that we can charge it much more often than a combustion engine car.
Which are the electric car savings in terms of CO2 and polluting particulate matter?
One important aspect that we should not forget is that thanks to the electric vehicle we will be contributing to reduce CO2 emissions. According to a recent study carried by Transport & Environment, in the worst-case scenario an electric car emits 22% less CO2 than a diesel and 28% less than a petrol.
This case is taking into account electricity that comes from the fossil fuel burning, both in the manufacture of the battery and the energy used during its use. And yet we save tons of CO2!
But at the best-case scenario, we save 80% of CO2! Not to mention that an electric car generates neither fine suspended particles nor nitrogen dioxide (NO2) like those emitted by diesel ones, which are seriously harmful to our health.
This is another of the great electric car advantages, don't you think?
What will be the price of the electric vehicle in the future?
As we have seen, the technology regarding the electric vehicle is becoming more and more evolved and, consequently, makes the price of batteries and the electric car itself decreasing more and more. In fact, it is estimated that in 2030 the electric vehicle will already be very competitive, as the purchase price between a combustion engine and a 100% sustainable one will be very similar.
And this is where the economy of scale comes into play, because year in and year out, more and more car brands want to get their piece of cake. This means that the more sustainable vehicles are produced, the more economical their production processes will be.
Do you still doubt that the electric vehicle is the future of mobility and of our society? Not only because it is already starting to become more economically viable and because the charging infrastructure is increasingly powerful and consolidated, but also because it is the cleanest option for our health and the environment!
🚙 How can Place to Plug help increase electric car savings?
Offering an end-to-end solution for electric vehicle charging and managing the charging points by offering different rates and giving you the possibility to get some extra income by sharing your charging station or charging point into our platform!