Yahoo Finance The seven potential hidden costs of your new electric vehicle
Running an electric car may seem like a cost-effective way of motoring in today’s era of soaring diesel and petrol prices, clean air charges and taxes. Yet there are some potential pitfalls to be aware of before you make the switch.
With EV advocates pointing to the cheaper upfront running costs, linked chiefly to the vehicles’ use of electricity rather than oil-based fuels, potential switchers should be taking a hard look at everything from insurance to the cost of tyres and other consumables.
Carefully picking your options can certainly result in a cheaper motoring experience – but if you’re not alert to how much some costs can vary, you might end up paying more overall.
Erin Baker, editorial director at Auto Trader, says: “Electric vehicles can save consumers money in the long term, and it’s vital consumers feel informed and confident about what electric cars can offer them so that no one is left behind in the electric transition.”
However, Compare the Market’s motor insurance expert Julie Daniels warns that the taxman will be reaching deeper into EV owners’ pockets in a couple of years from now.
“Higher road taxes are also set to increase EV running costs from April 2025,” she says.
Here, Telegraph Money sets out what you need to know about EV costs.
Paying out for replacement parts
Keeping your EV on the road may not be as cheap as keeping a conventional petrol or diesel vehicle running if you’re the type of car owner who saves money by using second-hand or reconditioned spare parts.
Ms Daniels says: “Replacing some parts of EVs such as new batteries can be particularly costly.”
If you have a newer model, you’d hope you wouldn’t need to worry about replacement parts for quite some time – but you may need to shell out a considerable sum as and when you do.
One second-hand EV battery retailer lists a replacement for a VW ID-series EV power module at £1,139 (or £949 excluding VAT). A similar item – VW Module 8s – is listed at £1,250 on eBay, while yet another retailer lists a second-hand item at £880.
As in any second-hand market, prices for similar items may vary widely. Moreover, you have no guarantee about the battery’s condition or how it was treated under its previous owner.
Autocar magazine notes that EV battery packs “should still be providing at least 70pc of their capacity even after 200,000 miles, which is the sort of mileage that few cars ever reach”.
It is worth looking closely at EV makers’ warranty periods to get a feeling for how long the components should last.
Audi, BMW, Jaguar, Nissan and Renault all guarantee their battery cells for eight years or 100,000 miles, whichever comes first.
With the average Briton covering somewhere between 5,000 and 7,000 miles per year, this means a new EV battery should last more than 13 years.
With the average age of used cars having reached 8.6 years, this means replacing a battery pack is something that ought to be a rare occurrence.
Cost of tyres and other consumables
Routine consumables such as tyres can contribute to higher running costs than a conventional car.
On average, EVs are around 200-300kg heavier than their petrol and diesel counterparts, according to insurance company Admiral.
Based on an average internal combustion engine (ICE) car weight of around two tonnes, this means an EV can be up to 15pc heavier.
Greater vehicle weight means more wear on key parts such as tyres and brakes. While EVs are hailed for their greater performance from a standing start, that improved acceleration can come with some drawbacks.
Road safety charity Tyresafe says: “All that power at any speed in a heavy vehicle means if the driver regularly accelerates hard, the tyres are put under tremendous strain, fighting to grip the road and not spin.”
Tyre makers have responded by bringing out tyres optimised for EVs’ greater weight and acceleration.
Earlier this year Bridgestone, the US tyre company, said EVs go through tyres about 30pc faster than conventional petrol and diesel cars.
While this claim could be taken with a pinch of marketing salt – the rubber products company has brought out several models of EV-specific tyres in recent years – there is widespread consensus that EVs’ higher rates of acceleration and greater weight speed up the rate at which tyres wear out.
With budget tyres for lower-end ICE cars, such as the Vauxhall Corsa, coming in at around £50 each, and everyday EV tyres such as Michelin’s E-Primacy retailing at around £110 per tyre, the increased running costs are something to factor into your calculations.
Equally, it may be worth budgeting for higher-end tyres that could have a longer life; greater costs, incurred less frequently, result in a lower overall cost of ownership.
Brake pads are another of the common recurring costs associated with running any vehicle. Here, EVs may have the advantage over internal combustion engine cars.
Most EVs employ what is known as “regenerative braking”, where instead of brake pads gripping a disc to slow the car down through friction, the wheels are connected to a generator that tops up the battery, with the mechanical resistance of the generator slowing the car down.
Regenerative braking means less use of actual brake pads, which typically kick in at low speed to bring the vehicle to a complete stop. Electric trains use a similar system.
The RAC says EVs typically go through fewer brake pads than petrol or diesel cars, thanks to the use of regenerative braking systems.
Rising insurance premiums
Like most other goods and services over the last year, car insurance has also risen substantially.
Confused.com, an insurance comparison site, said in October that the cost of obtaining fully comprehensive motor vehicle insurance had risen 58pc over the previous 12 months.
Data from Compare the Market shows that the average insurance premium for an EV in October was £866 per year, versus £857 for a diesel car.
With EVs at either price parity or slightly more expensive to insure than some conventional cars, drivers will need to shop around carefully.
Ms Daniels says: “The rising cost of car insurance for EVs could make switching to one less appealing. One of the best ways for drivers to try and save money on car insurance is by comparing prices online.”
She adds: “As of October this year, the average car insurance premium for petrol cars has surpassed the cost of insuring an EV.
“Nevertheless, on average over the past few months, our data has shown EVs are typically more expensive to insure than petrol or diesel cars.”
In recent weeks the cost of fully comprehensive insurance for petrol cars surged again, however. These cost consumers an average of £902 to insure in October, while EVs were around £50 cheaper per year to secure cover for at the same time.
While you can cut the costs by opting for third-party, fire and theft cover instead of fully comprehensive insurance, similar market dynamics are at play.
In some instances insurers are charging higher premiums for those with third-party policies because they suspect drivers trying to cut costs are those who are more likely to encounter incidents resulting in a claim.
The changeable cost of charging
One of motoring’s biggest costs, whether you are driving an EV or an ICE, is keeping your vehicle fuelled.
Both oil and electricity prices have fluctuated significantly over the last year as geopolitical instability, primarily caused by Russia’s invasion of Ukraine, rocked the energy markets.
Petrol and diesel prices on Britain’s forecourts responded accordingly. Figures from the RAC Foundation show that petrol prices averaged 159.91p per litre in December 2022, having fallen from July 2022’s all-time high of 199p. Today, they’re at around 147p.
Charging an EV at a rapid public charger on a motorway service station typically costs around 69p/kWh. That works out at nearly 22p per mile in an EV doing 3.2 miles per kWh, compared with someone who charges on an off-peak tariff at home, when that cost per mile can easily drop to around 4p, depending on the tariff and the EV’s efficiency.
A petrol car doing 40 miles per gallon currently costs around 14p per mile, while a diesel car doing 55mpg is 13p per mile. Clearly, there is an upfront cost saving to be seen from driving an EV.
Electricity prices are more volatile than petrol or diesel prices. Ofgem data shows that over the past three years, prices paid by consumers for domestic electricity supply have doubled.
Wholesale prices paid by electricity suppliers last December were £330 per megawatt-hour – but by October 2023 this had dropped by two thirds, to £115 per MWh, although so far those price changes have not been reflected in domestic electricity tariffs.
Ms Baker, of Auto Trader, says: “With many examples of price parity between electric and petrol equivalents in the second-hand market, and current savings of £155 per 1,000 miles driven when charging off-peak at home versus filling up at the pumps, there are many good reasons for consumers to consider electric vehicles right now.”
Price of home charging equipment
One of the attractions of buying an electric car is that you can charge it at home, perhaps taking advantage of cheaper electricity deals at certain times, such as overnight.
A canny homeowner with a new solar panel installation might also offset the cost of charging the car against their previous level of outgoings, effectively slashing their petrol bills by maintaining the same level of spending on electricity and using the solar panel to cross-subsidise their inputs.
Ms Daniels says: “EV owners may benefit from fuel savings, which could lead to a lower running cost compared to a petrol or diesel car.
“However, the significant upfront cost of buying an EV and installing a home charging point may prevent some drivers from being able to afford this option.”
Labour costs for installing a dedicated EV charger at home are between £375 and £1,000 depending on if you are eligible for government grants, according to Checkatrade.
You can expect to pay up to £1,000 for a 7kW wall-mounted charger, fed from your domestic electricity supply. If you live somewhere with access to a three-phase power supply you can opt for a 22kW wall box, although the associated costs will increase accordingly.
The Government offers up to £350 in grants from the Office of Zero Emissions Vehicles (OZEV) towards installing chargers. Claiming this means you must use an OZEV-authorised installer to do the work.
Renters and flat owners are also eligible to claim the OZEV grant, the Government says.
Yet installing a home EV charger could be a very costly and disruptive exercise if your home is an older one on what is called a “looped power supply”.
Randolph Brazier is director of electricity systems for the Energy Networks Association (ENA), which is responsible for the National Grid.
He explained to The Telegraph earlier this year that looped power supplies were “a way of cost cutting when the electricity supply was nationalised”.
Some households effectively share their power supply with their neighbours, meaning digging up gardens may be necessary before the supply can handle the demand of an EV charger.
In some cases, your neighbours may have to give permission for their gardens to be dug up as well before the supply can be unlooped.
“If we came across a looped supply, we would unloop them for free,” said Mr Brazier. “We then reinstate any garden, path or drive that’s been disrupted.”
The costs for this work, usually needed on terraced or rural properties, are picked up by all bill payers using the 23pc levy that goes towards network costs.
Resale value
Selling your EV, should you trade up for a better model, could be tricky in the short term, although as adoption grows, so will the size of the market for second-hand EVs.
Data from Auto Trader shows that, in some cases, price parity is already being achieved between comparable second-hand petrol cars and their electric counterparts.
However, availability and choice in the second-hand market can still be a concern. Auto Trader says its most commonly searched price bracket is the £20,000-£30,000 range.
A three-year-old Renault Zoe was on average about the same price as the Renault Clio in October, the car trading site says.
A year ago, buying a second-hand 2018 BMW 3-Series would have cost you £20,000 more than buying a similarly aged Tesla Model 3.
Today typical valuations for the petrol-engined German car are within £1,000 of the American EV, Auto Trader adds.
At the time of writing there were seven models of EV on offer versus 77 petrol and diesel cars.
Shipping your vehicle abroad
In 2022 the bulk car-carrying ship Felicity Ace caught fire and sank, taking more than 4,000 vehicles to the bottom of the Atlantic.
Local authorities in the Azores, who rescued the ship’s crew, claimed that lithium-ion EV batteries had ignited in the blaze and accelerated the fire’s spread through the 60,000-tonne vessel.
After the sinking, the ship’s owner, Mitsui OSK Lines, announced it would no longer transport used EVs. Spokesmen insisted at the time that the policy change was not linked to the loss of the vessel.
Nonetheless, EVs are now a specific item of risk for shipping companies. Owners should therefore bear in mind that shipping a favourite vehicle overseas to follow a family move may be less hassle-free than for a conventional car.
Shipping a car costs anything from a few hundred pounds to the low thousands depending on model, carrier and distance.
One company offering this service, Autoshippers, says it can ship EVs “without the need for additional paperwork or added costs”.
Stena Line Freight, the shipping operator, says it accepts EVs aboard its vessels but reserves the right to refuse boarding if its crews suspect the car – or its battery – are damaged in any way.
Recommended
This is exactly when you should invest in an electric car
