Electric Cars Are Kinder To The Planet And Your Wallet

Motorists have turned their attention to electric cars in an attempt to beat the fuel shortage that is gripping the country.

According to website Car Guide, the number of Google searches for electric cars soared by 1,600pc on Friday, compared to normal levels. As petrol stations across the country have run low on fuel or run out completely, motorists are considering electric vehicles (EVs) to avoid the tailbacks on forecourts.

A spokesperson for Car Guide thinks the trend is likely to continue, as more people become familiar with the viability of EVs. Although there are other reasons to go green and switch to an EV, concerns over range and convenience mean motorists are often put off by the higher upfront cost.

EVs are on average 47pc more expensive to buy than their petrol or diesel equivalents, mainly due to the cost of the lithium-ion batteries. Yet battery sizes have decreased over the years, bringing down the overall cost. Six years ago, a battery amounted to 57pc of the cost of an EV. Since then, the cost has fallen to just one-third, and by 2025 it will be 20pc, according to charging network Source.

But as EVs are still more expensive than petrol and diesel cars by an average of £10,000, this would mean paying almost £1,700 extra in VAT, say retailer Halfords.

Lower running costs of EVs

According to charging network Pod Point, charging an EV with a 60kW battery and 200-mile range at home would cost around £9.20. Whereas 200 miles worth of petrol in a car with average fuel consumption would cost around £31.

A home charge point could cost up to £1,000, according to energy firm EDF, but there are grants available from the Office for Zero Emission Vehicles (OZEV), which could reduce the upfront costs of these cars by up to £350. In addition, the Government offers grants of up to £2,500 to those buying new EVs worth less than £35,000.

Halfords’ research found that buying the electric version of a Mini Cooper Classic would save on average £800 after three years, while buying a BMW i3 would save £1,650 despite costing almost £10,000 more upfront than their petrol or diesel counterparts.

But these figures are based on assumed annual mileage of 10,000, far higher than the national average of 7,090 miles, according to Department for Transport data. It would take the average driver on this mileage more than four years to make this saving.

No car tax paid on EVs

Research by insurer LV found that three electric cars, Nissan’s Leaf, VW’s ID.3 and MG’s ZS EV, work out cheaper than similar standard cars when bought outright, leased for four years or purchased through personal contract plans. However, the research assumes that drivers cover 12,000 miles per year in order to achieve these savings.

But drivers could make a saving in as little as three years due to lower running costs, though this depends largely on how many miles they drive. Someone driving an average of 7,500 miles per year would pay about £800 for petrol, of which £520 would be tax. Charging from home, an EV doing this mileage would cost only around £300 per year (though it would cost more to charge at a roadside charging point) and the VAT would be just £15.

An EV should also save the motorist an extra £140 or so in car tax, which makes a combined annual tax saving of around £645 per year. Users of electric cars are entitled to further significant tax benefits. Currently, VAT is charged on both the fuel and the duty, meaning they account for around 65pc of the price paid at the pump. By contrast, there is no fuel duty for charging an EV and the VAT is limited to just 5pc.

As EVs have no emissions, they will all be free of car tax now the charge for EVs costing more than £40,000 has been abolished.

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The Business4Beginners news team consists of several writers who each have their own unique experience in businesses. By keeping their fingers on the pulse, they bring you the latest in news and trends impacting small UK businesses.
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