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Electric vehicles (EV) vs ICE running cost per mile, which is better?

About a year ago, we wrote a blog titled – Is it worth going for an electric vehicle now and should you buy the car through your business but since then the petrol costs have been through the roof and we decided it was time to write an update to the topic.

Is it worth moving to Electric from Combustion engine? With the petrol crisis running rampant and making you feel like every time you press the gas pedal you are setting £50 notes ablaze a second, let us explore this question by looking at the running cost per mile of fuel when operating each car. The update is written today, 30th August 2022. It’s an important date, since the cost of ‘regular’ fuel spiked recently, and is ever-changing rapidly.

What we also know is the cost of Electricity is moving from circa 30p per KwH to 58p per KwH from 1st October 2022. So let’s go with the most recent rates of fuel and both today and October’s rate of electricity. According to the AA website, the average petrol cost in July 2022 was £1.88 per litre, a staggering £8.55 per UK gallon. Diesel was £1.95 a litre, £8.86 a gallon.

For petrol, this is an increase of 46% from a year ago. In comparison, the current electricity cap has increased, as we know, by 54% already, with a further increase of 79% in October. So when we reach the October price cap, electricity will have increased by 275% from this time last year. Devastating for an EV driver, or is it?

For ICE cars, we have to work out the miles per gallon and then calculate what that means per mile in petrol costs. EV’s differ, as we have to work out the miles per KwH instead, there is no “gallon” equivalent in electric cars.

Here are some examples of mpg and the cost per mile for each.

From the tables above you can see that driving an EV is still more cost-effective than ICE, but for how long, we do not know. There’s a price cap change in January and April next year which both are expected to increase again, therefore we do think that the gap between running costs will become smaller.

However, even if the running costs become comparable, there are other reasons why it may be worth looking into buying an EV, namely servicing costs. Referring to another article published by the AA, “electric vehicles require less maintenance than petrol or diesel cars and are more reliable, so they won’t need as many repairs“. If you’ve ever sent your car for ‘routine’ maintenance only to get an invoice back where the numbers have quickly snowballed into the four digits territory then you understand the potential of this finding.

Lastly, there is the environmental effect of operating an electric vehicle over the combustion engine but we all know this is the case so rather than preach to the choir, we won’t make you spend any more time reading about it.

If you operate our limited liability partnership and want to discuss getting an electric vehicle through your business or what tax savings are available, please get in touch here.

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