Electric vehicles vs petrol/diesel/hybrid

Posted 31st October 2022

Has the ‘cost of ownership’ argument changed?

With business costs increasing and energy costs climbing sky high, attention is being turned to the running costs of electric vehicles. Loyd Davies, Service Development Director at ElectrAssure, reviews the arguments:

It’s impossible not to have witnessed the evolution of the motor industry over the last few years. We’ve seen the growing popularity of electric vehicles (EVs) and the potential of driverless vehicles as the UK Government works towards its commitment for almost all vehicles and vans to be zero emission by 2050.

If you are a business owner running a fleet, a fleet manager, or company car driver, you’re probably investigated whether now is the time to go electric. Here we review whether the rising energy costs have had an impact on the case for electric vehicles.

Depreciation

Along with fuel, depreciation is a significant running cost and petrol vehicles generally have the highest depreciation. Hybrids are showing promising deprecation levels, though plug-in hybrids have recently seen reduced demand. The 2030 ban on sales of new petrol and diesel vehicles has seen electric vehicles retain very strong residual values. As monthly payments are calculated on the value at the end of the leasing term, high residual values are great news for EV drivers as they result in very competitive monthly payments.

Range

Range anxiety is a thing of the past. Many current EV models can cover more than 250 miles on a single charge so you will lose little if any time during the day recharging your vehicle. Even if you or your drivers cover greater distances each day, Britain’s ever-improving EV infrastructure means charging your battery on the go is becoming easier. According to ZapMap, there are now more than 42,000 charge point connectors across the UK in over 15,500 locations – that’s more public places to charge than petrol stations! Businesses can also receive financial help towards installing on-site charge points – keeping your zero-emission fleet on the road all day, every day.

Living with an EV

A home charger makes charging a convenient overnight experience and more employers are offering workplace charging. With the increasing number of charging locations and the increased availability of rapid and ultra-rapid charging points, living with an electric vehicle is becoming easier. While you still need to keep up with basic maintenance aspects such as tyre pressure, lights and washer fluids, the simpler design and fewer moving parts in EV motors means very little time is spent in the garage.

Environmental benefits of electric vehicles

Aside from the cost arguments for going electric, the reduced emissions from EVs contribute significantly to business CSR, environmental and sustainability targets. At ElectrAssure, we are seeing more and more companies putting the infrastructure in place to electrify their fleet. In the last year alone, our EV chargers have provided our clients with 6.7 million electric miles, saving over 3,200 tonnes of CO2.

Has the ‘cost of ownership’ balance changed?

The low cost of ownership of an electric vehicle remains a very strong selling point. For a business, EVs can offer significant cost savings. Cost per mile figures for electric vehicles are significantly lower than internal combustion engine (ICE) vehicles. That includes plug-in and ‘self-charging’ hybrids, which regularly travel above their all-electric range. Fleets can cut their ‘fuel’ costs by up to 80% by moving to battery electric vehicles.

While the energy crisis of 2022 has been significant and the cost of electricity increasing, the cost of petrol and diesel has been going up as well. In October 2022, the average cost of motor fuel was £1.62 per litre for ultra-low sulphur unleaded petrol and £1.81 per litre for ultra-low sulphur diesel. Owners of petrol vehicles paid 18% more at the pump in October of 2022 than they did in October 2021 on average and diesel prices were up by 28% in the same time period.

Company drivers only pay 2% in Benefit in Kind (BIK) in the 2022/23 financial year with that rate frozen until at least 2025. With additional savings on road tax, Ultra Low Emission Zone (ULEZ) and congestion charges, the demand for fully electric company vehicles will continue to grow.