The Great Debate. EV's will cost less than petrol cars over 5 years.

Herzlos

Car_54 said:

Herzlos said:

It's not that hard to see that the total cost of ownership could be lower with an EV - in fact that's what most EV owners are saying.

Take the Corsa Ultimate, it's £24k in petrol and £32k in electric. Sounds like petrol will be much cheaper to own, right?

That's only an £8k difference over 5 years, so ignoring depreciation and congestion charging / LEZ zones (which would go in the EV's favour) we're only talking about £1600/year in running costs.  Let's also assume that nothing on either car goes wrong, and that tyres etc cost the same.

The petrol version will be £155/year to tax and ~£100/year to more to service. If we assume the petrol gets 44mpg (as per honest john), that's somewhere about 17p/mile, and an EV is getting 4 miles/kwh @ a standard 35p/kwh electric supply (and not a 10p/kwh octopus rate), then that's 9/pmile. So an 8p/mile saving.

So that'd mean you'd need to do 16.8k miles a year for the EV to be cheaper.

BUT, if you were to charge it on an overnight EV tariff @ 10/kwh, the EV would be cheaper after 9600 miles.

Factor in any of the stuff ignored above like congestion charges, depreciation, mainenance, and then the EV quickly becomes much cheaper.

Something else you've ignored is the cost of financing the £8k difference. Even if you pay cash, there's an opportunity cost.

Very good point. Assuming you financed the extra £8k @ 8% (rate I was shown recently) then that's another £640/year.

That said, a PCP on the EV may work out slightly better.

Having a look at lease deals, I can get the EV for £398/month, and the ICE for £390/month, which means the EV could be cheaper after just 53 miles per month.

Martyn1981

Herzlos said:

Car_54 said:

Herzlos said:

It's not that hard to see that the total cost of ownership could be lower with an EV - in fact that's what most EV owners are saying.

Take the Corsa Ultimate, it's £24k in petrol and £32k in electric. Sounds like petrol will be much cheaper to own, right?

That's only an £8k difference over 5 years, so ignoring depreciation and congestion charging / LEZ zones (which would go in the EV's favour) we're only talking about £1600/year in running costs.  Let's also assume that nothing on either car goes wrong, and that tyres etc cost the same.

The petrol version will be £155/year to tax and ~£100/year to more to service. If we assume the petrol gets 44mpg (as per honest john), that's somewhere about 17p/mile, and an EV is getting 4 miles/kwh @ a standard 35p/kwh electric supply (and not a 10p/kwh octopus rate), then that's 9/pmile. So an 8p/mile saving.

So that'd mean you'd need to do 16.8k miles a year for the EV to be cheaper.

BUT, if you were to charge it on an overnight EV tariff @ 10/kwh, the EV would be cheaper after 9600 miles.

Factor in any of the stuff ignored above like congestion charges, depreciation, mainenance, and then the EV quickly becomes much cheaper.

Something else you've ignored is the cost of financing the £8k difference. Even if you pay cash, there's an opportunity cost.

Very good point. Assuming you financed the extra £8k @ 8% (rate I was shown recently) then that's another £640/year.

That said, a PCP on the EV may work out slightly better.

Having a look at lease deals, I can get the EV for £398/month, and the ICE for £390/month, which means the EV could be cheaper after just 53 miles per month.

Do I assume the reason the lease costs are so close, will be down to the higher expected residual of the BEV?

If so, then that's a strong reminder of the importance of considering depreciation within running costs, which some (not all) will forget, when simply looking at the higher purchase price.

[Obviously, I appreciate you omitted it in these calcs deliberately. M.]

scaredofdebt

I'm currently leasing an MG5 (EV) at £299 a month over 3 years, my previous lease was a petrol Skoda Karoq, cost £220 a month.  

I average 1,500 mile a month, EV costs 8p a mile, petrol around 16p so I am around £40 a month better off and driving a nicer car as well.  Servicing is also likely to be cheaper, but I won't know for sure until the lease is up.

Herzlos

Martyn1981 said:

Herzlos said:

Car_54 said:

Herzlos said:

It's not that hard to see that the total cost of ownership could be lower with an EV - in fact that's what most EV owners are saying.

Take the Corsa Ultimate, it's £24k in petrol and £32k in electric. Sounds like petrol will be much cheaper to own, right?

That's only an £8k difference over 5 years, so ignoring depreciation and congestion charging / LEZ zones (which would go in the EV's favour) we're only talking about £1600/year in running costs.  Let's also assume that nothing on either car goes wrong, and that tyres etc cost the same.

The petrol version will be £155/year to tax and ~£100/year to more to service. If we assume the petrol gets 44mpg (as per honest john), that's somewhere about 17p/mile, and an EV is getting 4 miles/kwh @ a standard 35p/kwh electric supply (and not a 10p/kwh octopus rate), then that's 9/pmile. So an 8p/mile saving.

So that'd mean you'd need to do 16.8k miles a year for the EV to be cheaper.

BUT, if you were to charge it on an overnight EV tariff @ 10/kwh, the EV would be cheaper after 9600 miles.

Factor in any of the stuff ignored above like congestion charges, depreciation, mainenance, and then the EV quickly becomes much cheaper.

Something else you've ignored is the cost of financing the £8k difference. Even if you pay cash, there's an opportunity cost.

Very good point. Assuming you financed the extra £8k @ 8% (rate I was shown recently) then that's another £640/year.

That said, a PCP on the EV may work out slightly better.

Having a look at lease deals, I can get the EV for £398/month, and the ICE for £390/month, which means the EV could be cheaper after just 53 miles per month.

Do I assume the reason the lease costs are so close, will be down to the higher expected residual of the BEV?

If so, then that's a strong reminder of the importance of considering depreciation within running costs, which some (not all) will forget, when simply looking at the higher purchase price.

[Obviously, I appreciate you omitted it in these calcs deliberately. M.]

I can't think what else it'd be; the lease company isn't likely to be getting a better bulk deal on EV's compared to petrol, so the only other things likely to affect the price will be the depreciation over the term.

Which makes sense, because at 3 years old, the EV will be an even better prospect compared to the petrol.
Assuming they both lost 50% over 3 years, that'd half the price difference and thus the mileage needed to hit break even.

Indout96

The main problem (from my point of view) is the value in future years.
Its fine if you are buying new as at the moment prices are holding but if you are looking to buy a 5/6 year old one and run it for a few years then you are looking to sell on a 10 year old car with a battery that most "experts" are saying will only last 10 years so the car is virtually worthless. A 10 year old petrol car still has 5-10 years of life left.

A lot of the comments above are giving great residuals for EV at the moment but totally ignoring the fact that all cars have great residuals due to the shortage. I paid £15,700 for my Civic Prestige 2 years ago when it was just under 3 years old. at the moment they are still selling (Prestige model) for over £18k. 

Bachelorplace

Agree - the used EV market does not look good. Many things that may go wrong also - few indies will know what to do with. 

Always do a PCP or lease on EV.... only! Which again is going to force us into finance. 

Tesla for example can't really be painted properly outside of proper Tesla specialists and as for service or breakdowns - its not that easy. 

Speaking of the Corsa I saw a YT video about Corsa E, real costs vs petrol - and it showed something like the EV was about £5 or something a month more per month including all fuel and charging costs, but that was low miles 5k miles I think. Closer to our MG friend - I think the MG is a bit of a game changer tbf due to its price, again tho, not fun doing long runs. 

DrEskimo

Indout96 said:

The main problem (from my point of view) is the value in future years.
Its fine if you are buying new as at the moment prices are holding but if you are looking to buy a 5/6 year old one and run it for a few years then you are looking to sell on a 10 year old car with a battery that most "experts" are saying will only last 10 years so the car is virtually worthless. A 10 year old petrol car still has 5-10 years of life left.

A lot of the comments above are giving great residuals for EV at the moment but totally ignoring the fact that all cars have great residuals due to the shortage. I paid £15,700 for my Civic Prestige 2 years ago when it was just under 3 years old. at the moment they are still selling (Prestige model) for over £18k. 

There are plenty of 8-10 year old EVs and there is no evidence that these are 'worthless'. Certainly don't know of any experts that are suggesting this either (not least because it will be heavily dependent on the number of battery cycles, which will be dictated by mileage).

My current EV is 6-years old next months and will have 23k miles on the clock. Battery health is 93%. Absolutely nothing to suggest it will suddenly drop catastrophically in the next 4-years.

mgfvvc

Indout96 said:

... you are looking to sell on a 10 year old car with a battery that most "experts" are saying will only last 10 years so the car is virtually worthless.

The experts I hear suggest that the battery will outlast the car in most cases (Nissan Leaf excluded).

Tesla's figures say that Model S/X batteries have a 500,000 mile design life and those that have done 200,000 miles typically retain 90% capacity. Not enough Model 3/Y vehicles have reached 200,000 miles for them to give a figure. Some of you may wish to take those figures with a grain of salt. Other manufacturer's batteries will have different characteristics.
The warranty limits are telling. Most warranties are 8 years/100,000 miles. We can assume that very few will fail within warranty, and there will be a very considerable margin, so that early failures are minimised. From that I would assume that the typical battery lifetime would be more than 150,000 miles, but someone with a proper understanding of failure rates may be able to more accurately assess that?

Herzlos

Even if the batteries drop, which there's yet no evidence for, the cars will lose *some* value. But it's worth noting that the scrap value of an EV is much higher, and it's possible to get the batteries reconditioned/repaired so even if the range did drop below whatever your threshold is, you're not going to be stuck with a £10k paperweight.

There's no reason to think that a new EV bought in 2023 will have a battery failure before an average scrappage age of 14 years. Certainly it's no higher risk than the engine completely failing.

It's also worth noting that for a lot of people, a cheap low mileage EV is perfect. Some may balk at a car with under 200 miles range, but for a lot of use cases a 20 mile range is perfectly fine.

For the right price I'd have something like a Leaf with a 20 mile range; that'd let me do all of my local trips for pretty cheap. I'd still need to keep something else for the longer trips, but not everyone needs to do longer trips often enough.
For example; I doubt my parents car has travelled more than 10 miles in a single journey in the 5 years they've had it. I also know someone who only drives for the school run and has never driven out of the town she lives in, for a grand total of about 3 miles a day.

silverwhistle

Herzlos said:

There's no reason to think that a new EV bought in 2023 will have a battery failure before an average scrappage age of 14 years. Certainly it's no higher risk than the engine completely failing.

A petrol car will have a scrap value of virtually nothing but a battery may have a valuable further life as a static storage battery.

As for depreciation - who knows? I sold my MG ZS EV at two years old for £600+ more than I paid for it, and that was as a trade in for an MG4 and I could have got more from WBAC etc.

My fuel costs are under 2p a mile as I charge overnight at home.

Compared with my previous cars EVs are a lot more expensive to purchase, but the driving experience is far nicer: better acceleration, far quieter and no local pollution. In the summer I even get some of my day to day mileage effectively free from my solar panels. As I'm retired I've no early morning departures but those who do appreciate pre-warming the car without having a dirty exhaust polluting the local environment.