You certainly wouldn’t be blamed for thinking so. In a recent series of surveys we ran in association with Charge My Street, when asked what the biggest factor was that was holding them back from buying an electric vehicle, around 40%-50% of respondents answered “the cost”. This was by far the biggest concern among respondents, some of whom viewed EV driving as the exclusive preserve of the lavish and well-off.

On the face of it, it’s easy enough to see why. Glancing at Nissan’s website one can see a new Leaf EV retailing at just under £28,000 whereas their new Micra N-Sport (another five-door, five-seater petrol-powered car) retails for around £10,000 cheaper.

To look into the truth of this matter, I did what any good researcher would do, in that I pounded a confused scrabble of keywords into my google machine and read the top few results. Once this was done, I picked up the phone (as a millennial, I wasn’t thrilled by this idea) and I rang around half of the EV dealerships in Cumbria and spoke to some real humans in order to verify what I’d read on the internet.

In addition to the retailers, many thanks must go to the folks at Classic and Electric Vehicles (CaEV)  in Durham whose expertise was key in refining the raw wind energy of my scattered googling into practical, clear, and usable advice.

So, lets begin with the first and most obvious road into financing the purchase of an EV that a prospective buyer might naturally look to when avoiding the factory-fresh price tag: the second-hand market.

Buying used

One of the most striking things that meets people who go into a dealership looking to buy a 2nd hand EV will be their comparative pricing with their petrol and diesel cousins. EVs tend to retain their value far better than we’re used to as drivers of internal combustion engines (ICE).

One dealer told me that he had bought a four-year-old Nissan Leaf for £8000 in 2017 and three years later sold that same car for £8,700. Similarly, another told me that they own a 2013 Leaf with 75,000 miles on the clock which would retail today at slightly over £6000. This was the same price he paid for it a few years ago.

There are obviously caveats that need to be swallowed with both of these anecdotes as they are from industry insiders who know a bargain buying price when they see one. Your average consumer new to EVs would be very lucky to intuit when an asking price is far lower than what the car could be sold for a few years down the road.

Nevertheless, there are a few reasons that our sellers gave for this remarkable retention of value. Firstly, the EV market is continually growing at the moment. As more consumers become aware of EVs, the cars aren’t dropping their value as there’s always a new EV convert looking to dip their toe in the water. As can be expected, the low numbers of EVs that as yet exist carry value with their relative rarity.

When the mass manufacture and uptake of EVs increases to well beyond its current level, this value will gradually start to drop down, although CaEV estimates that this will be at least another three years yet.

The second reason that they keep their price so well is the reduced rate of degradation when compared with an ICE vehicle. There is only one moving part in an electric motor when compared to the dozens upon dozens found in an engine. That’s far fewer things that can be worn down, snapped, or otherwise done mischief to. There’s every chance that you could step into a five-year-old EV without really noticing any significant difference to one that recently drove off the assembly line.

This all means that when it comes to  investing cash into a new vehicle, you can be much more assured that your EV will stay a valuable asset over the years, rather than being good for nothing but a couple of hundred quid for scrap by the time you’re done with it.

Servicing costs

While we’re on the topic of the relative numbers of moving parts in our cars, it seems a splendid opportunity to go into the comparative servicing costs. As alluded to, EVs have around four moving parts in total and consequently, there’s less for a mechanic to do once they lift the bonnet. Regenerative braking (explained in this helpful video) leads to ‘one-pedal driving’ which, in-turn, reduces the wear and tear suffered by the brakes themselves.

Nissan in Carlisle gave me their standard servicing fees for their customers which can be seen below.

Minor Service Major service
Petrol £229 £309
Diesel £269 £369
EV £159 £209

As is evident, the savings enjoyed by those who arrive at the garage in a Leaf compared with those who come in a Micra are obvious and explicit. Coupled with the likelihood that an EV driver will very rarely need to get their car repaired at all while an ICE-driver knows every creak or wobble could mean 200 quid down the drain, it becomes clear that an EV is far and away the cheaper option when it comes to servicing.

According to CaEV, the servicing for EVs could be done for even more cheaply when performed by parties other than the manufacturer. Some independent traders are springing up all the time who will happily do the job for far less.

More information on the servicing costs can be found here.

Fuelling/charging

This is the big one. This is the area where anyone who decides to switch begins to become more and more smug when their bank statement comes in. It’s no secret that the average cost of fuelling a car from a wall socket is far cheaper than using the petrol pump.

The unit electricity is charged (no pun intended) in is in kilowatt-hours (kWh). The most expensive option would be to charge at rapid charging points mainly found at motorway service stations. According to PodPoint, this would typically cost around £6.50 for a 30-minute charge (about 100 miles in range).

Public chargepoints in general are comparatively expensive when compared to home-charging but even so, this is only usually done as a ‘topping up’ option for short amounts of time, giving the pennies little chance to creep up. Subscription options to your local charging networks can also help to push the cost down even further.

However, because the vast majority of EV charging occurs at home, overnight, these are the costs that your average EV convert will be looking at. You can get a government grant to help pay for your home chargepoint which covers £350 of the cost (they cost around £800 in total). Alternatively, you can charge from a standard three-pin socket inside your house.

Again, according to PodPoint, the average domestic electricity rate in the UK is 14p per hour. This means that a 60kHw car (like a 2019 Nissan Leaf e+) can be fully charged to its 200-mile range for around £8.50.

Compare that to its brother- the petrol-powered Micra- and the nearly £50 it takes to fill its 41-litre tank going by the current average petrol prices (at the time of writing) and the savings can be truly jaw-dropping.

In fact, since the Leaf only appears at number 25 in Choosemycar.com’s list of the cheapest EVs to charge, depending on what car you go for, the savings on daily fuel use could be even greater.

To add another layer of icing to this mounting cake of newly disposable income, depending on your electricity supplier, you have the option of obtaining a variable tariff on which electricity used during certain hours (typically overnight) comes at a reduced cost. Because you’ll usually charge the car overnight when you aren’t using it, you can benefit from the off-peak prices and grind the costs further to a miniscule 5p per kWh.

If you’d like a succinct and practical breakdown of the difference, the descriptively named Electric Vehicle Man broke down his own costs a few years ago and discovered he had saved over £4300 in fuel in three years when compared with petrol prices.

Integrated systems

Not to put the boot in to petrol and diesel drivers any more than I already am, but one additional turn of phrase that was used by the folks at CaEV that I am going to shamelessly steal is this: You can’t make your own petrol any cheaper.

Obviously, your average consumer has no control over the changing worldwide market of oil prices and is largely at the mercy of larger entities to tell them the price they’ll be paying for petrol/diesel whether they like it or not.

Whereas for electricity, this is not the case. Homes with fitted solar panels or wind turbines can generate their own fuel for the vehicle at no cost to themselves at all.

Obviously, this is not the case for every home and every driver but it remains to illustrate the myriad of options available to those EV converts who are looking to recuperate the cost of that initial purchase.

Financing options

Speaking of that initial cost, I have yet to address the fact that while the fuel and service savings sound wonderful, they are still hidden from us by that larger initial cost of buying the vehicle itself, second hand or not.

Speaking to a series of vendors, the consensus emerged that the majority of people who buy a car at all nowadays do so using finance options. The most common of these for an EV is a Personal Contract Purchase (PCP). This is essentially a long-term rental at the end of which you have the option to purchase the car.

PCP was a popular suggestion from the sellers as an accessible option for most as it is tailored to the means and circumstances of the individual customer in the same way that a mortgage is. Our friends in Durham similarly agreed that it constitutes a good hedging of bets and is a flexible way for a driver to experience their first EV.

WhatCar offers this article featuring a range of PCP deals on EVs that are all below £400 a month.

Another option that is relatively new on the scene is the emergence of subscription options that are moulded in the image of Netflix or London’s Buzzbike. As mentioned in this Guardian article, the firm Onto will provide a Renault Zoe for £389 a month. The main difference here is that the insurance, servicing, and maintenance are all included in the monthly fee which automatically renews until you cancel. Hopefully, this is the only similarity with Netflix, and you don’t end up scrolling endlessly every day deciding which car you’re in the mood to drive before falling out with your family and just watching Friends.

Annoyingly, these deals usually impose a limit on the number of miles you can drive in the EV so make sure small print is thoroughly read if you’re making daily commutes from Barrow to Longtown.

Battery lease

A more contentious option that is available on some models of EV is the ability to buy the car itself while only leasing the battery. Because the battery is the most expensive part of the vehicle, this can significantly reduce the upfront cost of the car (up to £6,500 can be knocked off according to buyacar.co.uk). The battery is leased through monthly payments and will be replaced in the event it gives up the ghost.

In the opinion of the retailers and of CaEV, this is a bit of a hangover from earlier in the days of EVs when buyers weren’t sure of how long the batteries would last. Now that the batteries have significantly improved and degradation is at a far slower rate, this isn’t as useful an option as it once may have been. It involves the outright purchase of the EV on top of the monthly lease payment and, as an added wrinkle, the lease of the battery doesn’t decrease in value along with the rest of the car. So, this could end up costing more money than it saves in the long run.

In conclusion…eventually…

So, as we can hopefully see from the cavalcade of considerations detailed above, the initial cost of EVs, while slightly higher than you would typically expect for similar cars on the petrol and diesel lines, immediately begin making up for that cost as soon as you leave the dealership. Looking at the fuel savings alone, if you’re savvy with your energy tariff like the Electric Van Man, the charging costs have paid for the car within six years if we use the prices provided by the two Nissan Leaf drivers above.

I didn’t even get into the fact that EVs are currently exempt from the congestion charge and road tax and thus yearly savings continue to mount everywhere you look.

Alongside numerous funding options that are available and tailored to suit most customers, the idea that EVs are just for the affluent tends to gain a few qualifying asterisks in honest conversation.

If you would like any more information on the costs of EVs, Mathew Kiziuk covered a lot that I’ve mentioned on our webinar with Charge My Street in June 2020. You can watch his 10-minute talk here.

A huge thanks to a whole host of car dealerships in Cumbria, including but not limited to Honda, Nissan, SEAT and Vauxhall as well as Classic and Electric Vehicles in Durham for correcting me on my many misconceptions.