With several new electric models launched over the last year or so, and the Plug-in Car Grant guaranteed in some form until 2020 – with current funding levels until at least October 2018 – the number of electric cars on UK roads is set to grow significantly over the next few years.
Thanks to growing competition between manufacturers, the price of EVs is starting to fall with big savings to be found for nearly-new EVs being released onto the market from the first wave of fleet contracts. Buying an electric car is, therefore, now a real option for a large number of car buyers in the UK.
Who should buy an electric car?
If you are thinking of buying an battery electric vehicle there are three issues that need to be carefully considered that will determine whether an EV is right for you: your access to charging points, your daily mileage and your overall budget. Read on to see whether a BEV is suitable for you.
Given that plug-in hybrids and extended range EVs are less dependent on access to an electric supply and are not electric-range limited, access to charging points and your daily mileage are less important. However, if you are about to invest in one of these technologies, you will likely want to charge your car and drive in EV-mode whenever you can to reduce costs and emissions. The following issues are therefore still worth considering.
1 – Access to charging points
Ideally you need to have a garage or use of an off-street parking area as, generally, an EV will do most of its recharging overnight; therefore it is essential that the car is safe and secure during this process. It is not advisable (under any circumstances) to trail an electric cable across pavements or other public areas to connect a car parked on-street with your household electricity supply.
The other consideration is what level of coverage there is in your area by the UK’s public charging network. Driving range is improving for BEVs with the standard now being around 80-150 miles – depending on model – and 20-30 miles in EV-mode for plug-in hybrids; however, there will still be occasions where you need to recharge using a public point. Check out the availability of charging points where you live by searching on Zap-Map.
2 – Daily mileage
If buying a battery electric vehicle, for maximum convenience your driving mileage needs to be limited to less than around 120 miles per day, preferably on a regular route that you know well. This can expand to double that if charging is regularly available when the car is parked up during the day – workplace charging for example. Regular commuting trips are well suited to electric cars as around two-thirds of commuting trips are less than 10 miles and, most significantly, they are routine journeys for which the driver knows what to expect with respect to distance, route, congestion, road conditions and parking.
If you drive more than this regularly you may be better suited to a plug-in hybrid (PHEV). These are similar to battery electric EVs in they must be charged but they also house a conventional engine that offers an extension of range. PHEVs typically offer 500+ miles in range using a combination of conventional fuel and electricity. They can be run on pure electricity for shorter journeys and call on assistance from the combustion engine for longer journeys, so still offer great economical and environmental advantages.
Research has also made useful observations regarding the way electric cars are used within multi-car owning households. While manufacturers initially thought that electric vehicles would be bought to replace a second or third car, research shows that once an electric car is purchased by a household, it tends to be preferred for all short local trips, with the other ‘main’ car only being used for longer journeys.
3 – Car buying budget
As the technology is becoming more common and has been around for a few years, there are an increasing number of used electric vehicles coming on to the market. Despite this, prices are still not cheap in general, as there is plenty of demand and cars are not particularly old. Overall, EVs of all types are more expensive to buy than their conventional equivalents.
However, some manufacturers have made strides to lessen the price gap between electric cars and conventional cars by offering battery lease contracts to reduce upfront costs. The Renault Zoe, for example, is priced at around £14,000, much the same as a conventional equivalent. The battery is then leased separately at around £60/month (depending on mileage); the average user spends considerably more than this on petrol/diesel a month.
As EV batteries have proved their reliability and longevity though, battery leasing is becoming less and less common. Many EVs are only available with the conventional purchase/leasing methods, with no difference between an EV or PHEV and conventional model.
As the EV market develops, prices continue to drop. Competition between manufacturers is partly driving prices down, though economies of scale are also seeing battery costs drop significantly, despite capacities increasing. The battery is one of the largest and most expensive elements of an EV, and with production costs dropping, the time when an EV is charged the same price as a comparable conventional model (or less) is not far off.
One other potential cost for EV buyers is the cost of installing a home or workplace recharging point. Typically a dedicated Slow (3kW) unit will cost around £1,000 to install by a qualified electrician. However, for buyers of plug-in grant eligible cars, there is an Electric Vehicle Homecharge Scheme, that offers a grant towards the cost of buying and installing a charge point, typically bring the total cost to £300-£400.
Plug-in Car and Van Grants
Plug-in Car and Van Grants are available to subsidise the purchase of qualifying battery electric and plug-in hybrid vehicles. Currently, for eligible plug-in cars the grant is worth 25% of the cost of the vehicle up to a maximum of £4,500 BEVs for and £2,500 for PHEVs; for vans, the amount is up to 20% up to a maximum of £8,000.
Find out the full details of recent changes to both the Plug-in Car Grant and Electric Vehicle Homecharge Scheme policies here.
Importantly, EV buyers do not need to apply for the Plug-in Grant as the subsidy is already included in the vehicle On The Road (OTR) price, lowering the cost by up to the maximum allowed. However, the list of grant eligible vehicles is useful for potential EV buyers as only vehicles meeting minimum standards are permitted to receive the subsidy.
To be eligible under the grant scheme vehicles must satisfy demanding criteria including:
- Category 1: CO2 emissions <50g/km and a zero emission range of at least 70 miles
- Category 2: CO2 emissions <50g/km and a zero emission range between 10 and 69 miles
- Category 3: CO2 emissions of 50-75g/km and a zero emission range of at least 20 miles
There is a £60,000 price cap on Category 2 and 3 eligible vehicles to focus grant funds on more affordable models.
Both private car buyers and fleets are eligible to receive the grant, which is administered by the Office for Low Emission Vehicles (OLEV) – no application forms are required as the dealership completes all the necessary paperwork on the buyer’s behalf and the grant is automatically deducted from the vehicle price at the point of purchase.
For more information, visit the Office for Low Emission Vehicles website.
Electric vehicle costs
While EVs may be more expensive to buy or lease than conventionally-powered models, electric cars and vans offer the potential for significantly reducing running costs, such as fuel and maintenance costs, and annual vehicle tax. Depending on your driving patterns, whole-life electric vehicle costs can work out much lower in the long-term when compared to conventional vehicles.
To begin with, pure-EVs are exempt from Vehicle Excise Duty (VED or ‘car tax’). The only exceptions are those models that cost more than £40,000, which are then charged the Premium Rate of £310 a year for years 2-6 after registration.
PHEVs and EREVs often pay nothing for the first year thanks to a £10 Alternative Fuel Discount, and should there be a charge, it is likely to be only £15. However, if a model produces any tailpipe CO2 emissions at all, no matter how low that figure is, it is subject to the Standard Rate VED – or Premium Rate if costing more than £40,000. The Alternative Fuel Discount applies here too though, so Standard Rate VED is £130 for a PHEV or EREV.
More significantly, per mile fuel costs are much lower than petrol or diesel vehicles due to the competitive price of electricity, and to the high efficiency of the vehicles themselves. In most cases for cars and small vans, fuel costs can be as low as 3p per mile (depending on your supplier and tariff). For an annual mileage of around 10,000 miles per year, switching from a conventional to an electric car or van could therefore save you around £800 in fuel costs alone – even compared to a frugal diesel model.
For drivers in and around London, another major running cost benefit is available as part of the Congestion Charge scheme. All electric cars (this time defined as vehicles that emit up to 75 g/km CO2 meet at least Euro 5 emissions standards) are eligible for the Ultra Low Emission Discount scheme (although vehicles need to be registered and pay an annual £10 fee). With a £11.50 payable daily charge, this could provide a potential annual saving of over £2,000.
Further information and car buying advice can be found on Next Green Car, at the links below.
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