Cost comparison of electric vehicles vs unleaded and diesel

Electric vehicles cost comparisonIt would be fair to describe plug-in vehicles as expensive in terms of purchase price. With cars, in particular, if they were seen as accessible, there would be no reason for the Government to subsidise their purchase by up to £5,000 with the plug-in car grant.

Grants of up to £5k have been available from the Government since 2011 and it is possible that the Government will want to continue with this incentive until the number of electric cars on the road is greater as well as a more substantial public recharging infrastructure.

But perhaps the most significant distinguishing factor comparing electric vehicles with conventional ones is the cost of fuel versus recharging.

At current prices, it costs around £2.50 to recharge a car like the Nissan Leaf to travel about 100 miles – around 2.5p per mile. The cost per mile of travelling in the Volkswagen Golf 1.6 TDI, based on its official combined fuel consumption of 68.9mpg and a fuel cost of £1.40 per litre, is around 9p – more than three times higher than the Leaf.

This can be offset against the considerably higher capital cost of the Leaf against a mid-grade Golf, but the results in pence per mile terms, even excluding the £5,000 discount currently available, are surprising.

Looking purely at depreciation, SMR and fuel costs, the Leaf and the Golf are evenly matched, with a slim advantage for the Leaf over four years/40,000 miles.

The Leaf loses £6,500 more in depreciation (but the £5,000 plug-in car grant would cover most of this), but is significantly less costly in fuel and SMR.

For driver costs, there is currently a BIK tax holiday on electric vehicles (which will end in 2015/16), so a 20% taxpayer could save £2,429 in BIK tax payments compared with the Golf, or even more if optional equipment is chosen for the car.

For outright purchase fleets, both cars would be subject to the 100% first year writing down allowance, with the threshold currently set at 110g/km. However, the Leaf would not incur Class 1A NIC because it is based on cars’ BIK tax bands.

Where the heavier depreciation of the Leaf would really hurt it is in leasing
rates. The purchaser of the vehicle, in this case the leasing company, would benefit from the £5,000 discount. Using comparecontracthire.com, the lowest monthly lease rate for the Leaf over four years/10,000 miles with maintenance is £356, more than £100 higher than the lowest we found for the Golf at £247.

For fleets that operate in London regularly, an electric vehicle such as the Leaf would benefit from a full discount. The Golf 1.6 TDI wouldn’t, but a customer choosing the Golf Bluemotion would also be able to register for the full discount.

Range-extended cars
Pure battery electric vehicles are not the only ones entitled to a Government subsidy. So are range extended cars, such as the Vauxhall Ampera and Chevrolet Volt.

The benefit of these cars over pure battery EVs is that when the 50 miles plug-in charge has expired, there is a small petrol engine with a 300-mile range to continue charging the battery and allow the electric motor to power the car.

This means on the few occasions a driver might have to exceed the range of the plug-in charge in one journey, he or she needn’t worry about being stranded.

It also means the cost of fuelling the car will be similar to a battery EV for most of the time. But the Ampera has a petrol engine that needs refuelling. The car has a 7.5-gallon tank with a range of up to 310 miles. This is equivalent to 41.3mpg or about 15p per mile.

Therefore it’s important that drivers using the Ampera make the most of the plug-in charge. The Ampera takes about half as long to charge as a pure battery EV, so the cost of a full charge is halved, but in mileage terms the Ampera should cost a similar amount to a Nissan Leaf when running on the plug-in charge.

Even if the fuel is rarely used, the car is programmed to alert the driver when the petrol is deteriorating in quality and advises running the engine to burn the fuel before it becomes stale. It means that no matter how good your access to a charging point might be, at some point the Ampera will need to use its fuel.

It means that the early indications of 40g/km and 175mpg based on the official cycle test for fuel consumption sound impressive – and would be reasonably close to those figures for shorter journeys – but they would not be repeated on a long journey where the petrol engine has to be used to charge the motor.

For drivers there isn’t quite the same advantage as a BIK tax holiday, but it is subject to a 50% discount in liability for having CO2 emissions below 75g/km.

It means a modest £340 annual tax bill for a 20% taxpayer – similar to a Vauxhall Corsa Ecoflex diesel. Likewise for employers’ Class 1A NIC, the annual bill is £241 – around the same as for the smaller Vauxhall.

Although there are no used value predictions published yet, early indications from pricing experts suggest the Ampera (and its sister vehicle, the Volt) will have stronger residual value percentages than other EVs. Our cost comparison (above) with a 1.7-litre diesel Vauxhall Astra shows the advantage for the Ampera in many areas.

Hybrids more sophisticated than ever
Hybrid cars have been on the market for 10 years and are more sophisticated now than they were when the original Toyota Prius and Honda Insight were launched in 2000.

The latest Prius (along with the Toyota Auris Hybrid) sets the benchmark for CO2 emissions, but Peugeot got in on the act in 2011 with the world’s first diesel-electric hybrid production car.

The 3008 Hybrid4 is slightly costlier to buy than the Prius and is a few pence per mile higher overall. But it has the Prius beaten for performance with up to 200bhp available, as well as the electric motor helping to give the Peugeot all-wheel drive ability.