EVs are still the money saving option

Even with the rise in energy costs, EVs are still the money saving option for drivers – EV ownership remains cheaper than a petrol or diesel an ICE car on both fuel costs and Benefit in Kind (BiK) tax

With the energy regulator Ofgem raising the price cap on 1^st October, there were questions about how these rises in electricity costs would impact drivers of electric vehicles.. Would they mean that EV motoring was no longer the money saving alternative to running an internal combustion engine car?

Using the latest Government Energy Price Guarantee (EPG) we’ve undertaken some educated guess work on how the rising costs of electricity will impact charging an electric car. On 23 September, the Government announced a new two-year EPG of £2,500 for a ‘typical household’ paying their energy supplier by direct debit, replacing the previous £3,549 price cap that had been due to come into effect from 1 October.

According to Which? (https://www.which.co.uk/news/article/electricity-unit-price-will-be-34p-per-kwh-from-october-appliance-running-cost-update-aoELC3g1iaD8) the average rate for electricity will be 34p per kWh as opposed to the previously announced 52p per kWh. Doing the maths reveals that EV ownership still remains better value when it comes to running costs.

Save £730 in fuel costs driving a VW ID.3 v a 1.5l petrol Golf

Using comparable combustion and electric cars, in this case a 58kWh Volkswagen ID.3 and a petrol Volkswagen Golf equipped with a 130ps 1.5-litre petrol engine, we can see that an EV driver would be better off in all scenarios. That is even before the other additional financial benefits of salary sacrifice have been factored into the cost calculations.

Our scenario would see the ID.3 charged at home via a 7kW home charger at 34p/kWh, and the Golf fuelled at the current average fuel cost of 165.5p per litre. Both driven for 10,000 miles per year, the electric ID.3 would be 7.3p per mile cheaper to run. A saving of over £730 or around £60.80 a month.

Had the calculation included the monthly savings that the driver of the ID.3 would be enjoying if the vehicle was taken out via our salary sacrifice car benefit scheme, these savings would have been yet more impressive still, thanks to the low Benefit in Kind tax rate applied to EVs and the income tax and NI savings that can be made on electric cars.

Reduce company car tax bills by up to £2,693 by driving an ID.3

The petrol-powered Golf 1.5 130PS at £25,590 attracts a BiK rate of 29%, which will cost a lower rate taxpayer £1,491 in tax, rising to £2,982 for a higher rate taxpayer.

The ID.3 at £36,140 incurs a BiK rate of just 2%. That equates to an annual tax bill of just £144.56 for the lower rate taxpayer, while a higher rate taxpayer would pay £289.12. That represents a saving for ID.3 drivers of £1,346 for lower rate taxpayers and £2,693 for higher rate taxpayers.

On average, Tusker has calculated that its EV drivers this year have benefitted from an average company car tax saving of £350 a month compared to £39 for drivers of the petrol and diesel vehicle.

No wonder drivers up and down the country are continuing to surge towards EVs as replacements for petrol and diesel vehicles, with more than 80% of Tusker’s current order bank being EVs, the benefits are clear.

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Calculations are based on a VW Golf 1.5, with a WLTP figure of 51mpg and a range of 504 miles. With a UK average fuel cost of £165.5 per litre (19^th September source: gov.uk), the Golf costs 14.7p per mile to run, compared to the ID.3 which would cost 7.4p per mile to run if charged at home for 34p per kWh (Source: EPG based on UK average)