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Electric cars - what’s the impact on my energy bill?

Electric cars - what’s the impact on my energy bill?

In 2021, electric cars are a viable and eco-friendly alternative to diesel and petrol vehicles. But while owners of electric vehicles save at the fuel pumps, what’s the effect on energy bills?

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Electric vehicles (or EVs) have grown in popularity in the last few years as range, choice and practicality improves. In 2015, just over 1% of newly registered cars were plug-in vehicles – but by the end of 2020 this had increased to 10.7%.

The government’s ban of diesel and petrol engines in 2030 is likely to ensure electric vehicles become the mainstream option for drivers in the future. Recent stats from Ofgem (May 2021) revealed that one in four Brits plan to buy an electric car in the next five years, while a £300 million investment is underway in rewiring the country's roads to triple the number of ultr-rapid charging points, as well as a further 1,750 charge points across towns and cities

So, what’s it like to own an electric car in 2021 and what are the cost considerations?

Types of electric car

Before deciding whether you’re ready to make the switch to electric, it’s important to understand the different types of electric cars that are currently available. The most common types of plug-in electric vehicles are:

Battery electric vehicles (BEVs). These have a 100% battery-powered motor and are also known as battery-only electric vehicles, fully electric vehicles or all-electric vehicles. With a battery-only vehicle you can expect about 100-200 miles of driving from a single charge. Popular BEV models include the Nissan Leaf, Renault Zoe and Kia e-Niro.

Plug-in hybrid electric vehicles (PHEVs). These cars run on a combination of battery-powered motor with an additional petrol or diesel-powered engine. The battery fuels the car for up to 70 miles, with the internal combustion engine providing back-up power for further range and higher speeds. Popular PHEVs include the Mitsubishi Outlander, Volvo XC90 and Volvo XC60.

Hybrid electric vehicles (HEVs) are another popular option for alternatively fuelled transport. So-called ‘self-charging’ hybrids power the battery from the car’s own braking system (using a combination of fuel and electricity), so don’t need plugging in but still require filling up with fuel.

Our guide to the best electric cars could help you find the right model for your needs. And check out our run-down of the most popular electric cars across the world.

Should I buy an electric car?

While most people associate electric vehicles with environmental benefits, the cost benefits are impressive too.

Running costs for electric cars can be much lower than petrol and diesel vehicles. For fully electric vehicles you don’t have to fill up on fuel at all, and plug-in hybrids will use much less fuel than a standard car. Recent research from EDF Energy found that electric vehicle owners could save over £51,000 on fuel over their lifetime, compared to the cost of charging their car.

Fully electric cars worth under £40,000 are also exempt from vehicle excise duty (commonly known as road tax), saving up to £2,245 for new cars in their first year on the road, and up to £490 per year after that.

Electric vehicles are also exempt from the London Congestion Charge and Ultra Low Emission Zone (ULEZ), meaning a saving of up to £12.50 per day for drivers in the capital.

Aside from the running costs, there are also grants available to make electric cars more affordable to buy. Fully electric vehicles are subject to a grant of up to 35% of the purchase price, up to a maximum of £2,500.

The cost of charging an electric car at home

While electric car owners will save on fuel and tax, it’s important to consider the cost of charging. Electric Nation Smart Charging Trial data in 2018 found that 87% of electric car charging is done at home using a home charging point.

A home charging point, fully installed, costs from £449 with the government’s OLEV grant. This grant offers up to £350 towards the cost of purchasing and installing a home charger.

Just as the cost of filling up with petrol varies depending on the car and the cost at the forecourt, electric vehicles will also vary in how much they cost to charge. The cost of charging your electric car at home will depend on two factors:

  • The size of your car’s battery
  • How much you pay per unit of electricity
  • Zap Map calculates the most popular all-electric car, the Tesla Model 3, would cost £9.60 to fully charge, based on an electricity rate of 16p/kWh. However, better electricity deals could be available that could cut the cost of charging your car at home - the cheaper your energy tariff, the cheaper it is to run your electric car. Electric vehicles with smaller batteries, such as the Nissan LEAF, could cost around £3 less per charge.

    Home energy costs are often higher for EV drivers - although this extra expense is usually significantly outweighed by the running cost savings and environmental benefits.

    The cost of charging your electric car at home will be included in your normal electricity bill, so you should carefully consider your energy costs and choose the right energy deal for you so you don’t overpay.

    Energy tariffs for electric cars

    One of the best ways to charge your EV cheaply at home is to take advantage of cheap off-peak energy rates.

    Many energy providers offer specific tariffs designed for households with electric vehicles. While not all suppliers offer specialist EV tariffs at the moment, they’re likely to become more commonplace as electric cars grow in popularity.

    All EV tariffs currently available offer 100% renewable electricity, with many offering discounts on home charge points plus other benefits.

    The general requirements for all EV tariffs are:

    • Your bill must be collected by monthly direct debit (EV tariffs are not available for those on prepayment meters)
    • You must have a smart meter or be willing to have one installed
    • You must own or lease an EV vehicle
    • For the home charge point discount (varies by supplier) you must be eligible for the OLEV government grant

    It’s worth considering your usage, charging hours and any additional extras offered by the supplier when deciding which is the best tariff for you.

    The cost of charging an electric car on the go

    An overnight charge at home will provide enough range for most journeys, road-trips beyond your car’s range will mean the car needs topping up on the way.

    Thankfully the UK’s charging infrastructure is improving all the time, with the number of public charge points increasing from around 1,500 in 2011 to more than 30,000 in more than 10,000 locations in 2020. Ofgem is investing millions to install 1,800 ultra-rapid charge points at motorway service areas and key trunk roads and a further 1,750 charge points across towns and cities.

    You’ll find charging points at motorway service stations, some petrol stations, shopping centres and car parks. They cost around £6-7 for 30 minutes rapid charging, enough for up to 100 miles of travel. Some public charge points work on a subscription basis and some offer free charging.

    While it’s worth knowing the cost of charging on the go if you need to, the vast majority of charging will be done at home between trips. Here’s where there is a significant opportunity to save by ensuring you’re on the best energy plan for your needs.

    Compare energy prices here

    It's a good idea to compare energy regularly to see what the latest prices mean for you, even though there are fewer deals available. Enter your postcode to get started.

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