UK study: ‘EVs six times cheaper to run than petrol cars by 2030’

A new study by the British Energy and Climate Intelligence Unit (ECIU) comparing four popular electric cars available on the second-hand market today in the UK with their siblings with a combustion engine on petrol shows EVs to be four times cheaper in energy costs in 2023, despite soaring electricity prices last year. It presumes they will become 5,5 to 6 times more affordable by 2030.

By 2030, anticipated decreasing electricity prices and increases in petrol prices would mean that the EV would save its owner £1 344 (€1 551) a year in fuel costs alone – an increase of £268 (€309) compared to today. In other words, a four-year-old EV bought today will save over the remaining ten years of its expected lifespans, almost £12 500 (€14 418) in total fuel costs.

The soaring electricity prices during the 2021-2022 energy crisis after Russia invaded Ukraine inspired the latest study published by ECIU. As did the question raised on social and other media whether this would further widen the gap in presumed costs of an EV compared to an ICE car. And how this would evolve for the rest of the decade.

Gap at its narrowest today

“At the time of writing in 2023, we are living through what is, in effect, a ‘pinch point’, in which the gap between the costs in charging an EV and in fuelling a petrol equivalent is at its narrowest,” ECIU concludes. “This ‘pinch point’ will shortly end as prices for electricity are forecast to fall significantly in the years ahead while petrol prices continue the steady rise as they have experienced for the past twenty years.”

The absolute figures resulting from that calculation fires one’s imagination. The eight cars compared are the Renault Zoe versus the Clio, a Nissan Leaf versus a Juke, a Kia Niro versus a Sportage, and a Jaguar I-Pace versus an E-Pace, with each car driven around 8 000 miles (12 875 km) yearly and kept for ten years.

Eight cars compared

Two scenarios were calculated, one with optimistic price predictions and one with less favorable ones. It turned out the Renault Zoe cost £149 (€175) in 2016 compared to £739 (€849) for the Clio, rising to £334 (€385) for the Zoe in 2023 and £1001 (€1 153) for the Clio, projected to become £242 (€278) by 2030 and £ 1 115 (€1 285) respectively. It makes the Zoe 4,5 times cheaper over time.

At the other end of the spectrum, the I-Pace, costing £203 (€234) in electricity in 2016, going to £338 (€389) in 2030, compared to £1 329 (€1 532) for the E-Pace in 2016 and £1 676 (€1 928) in 2030. The I-Pace, thus being six times cheaper or saving its owner £1 673 (€1 928) yearly.

Independent research

But where do these figures come from? The Energy and Climate Intelligence Unit is a non-profit organization based in the UK that conducts independent research and analysis on energy and climate issues. It was founded in 2014 by former BBC environment journalist Richard Black and is solely funded by philanthropic foundations like the European Climate Foundation.

ECIU’s Advisory Board includes climate scientists, energy policy experts, economists, and politicians. According to the organization’s website, they “support journalists, parliamentarians and other communicators with accurate and accessible briefings on key issues, and work with individuals and organizations with interesting stories to tell”.

Volatile electricity prices

In its report, ECIU points out that for several years before the gas crisis, wholesale electricity prices – before taxes – averaged around £40–50/MWh (€46-€57) in the UK. Because electricity prices tend to be driven mainly by gas prices today, as power plants run on gas, they have been very volatile lately, with peaks up to £300/MWh (€346) in Q1 of 2023.

To compare, the wholesale price in Belgium peaked in August 2022 at €448,12/MWh, falling back to €91,23/MWh in November 2023. According to figures from the British Office of Gas and Electricity Markets, electricity prices averaged £150/MWh (€173) for 2022 and over £200/MWh (€230) for 2023.

Furthermore, it is predicted wholesale electricity prices in the UK will not return to their pre-crisis levels until the late 2030s. But they are assumed to be 2 to 2,5 times their pre-crisis level in the second part of this decade due to the increasing impact of cheaper renewable energy available.

On a consumer level, that means British households are forecasted to pay £0,27/kWh (€0,31) in 2024, falling to £0,23/kWh (€0,26) by 2030. As 78% of British EV drivers regularly charge their vehicles at home overnight today, this was considered for the study.

75% charging at home

For its analysis, ECIU calculated that 75% of the charging was being done at home on a cheap ‘off-peak hour’ EV charging tariff, 5% at home on a standard day-time tariff, 15% at a public charger, and 5% on more expensive, rapid chargers at highways.

Regarding petrol prices for consumers, there has been a significant drop in petrol prices in 2023 from the historic highs reached in 2022. In contrast, the fall in electricity prices has been slower due to the ongoing impact of elevated gas prices, ECIU states.

Predictions based on the trends of the last twenty years in the petrol prices published by the British Government weekly suggest that oil prices will rise gradually. Still, ECIU assumes that these prices, despite their innate volatility, will remain relatively flat for the remainder of the decade. That means a price per liter of £1,40 (€1,61) in 2024 to £1,58 (€1,82) by 2030.

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