British research shows used EV buyers save €1,900 yearly over an ICE car

The UK’s best-selling used electric cars, even from the first generation like the Audi Q8 e-ton, could save their owners an average of £1,600 (€1,919) per year compared with their gasoline equivalents. According to a new study by the Energy & Climate Intelligence Unit (ECIU), these savings can continue over the entire ten-year lifespan of second-hand EVs.

The ECIU is a non-profit think tank that includes climate scientists, energy policy experts, economists, MPs, and peers. It considered the six best-selling EVs in the UK and compared their total cost of ownership (TCO) with gasoline versions, including purchase and running costs, such as electricity.

Saving €3,118 on Audi Q8 e-tron

“The top-selling EV with the most significant savings compared to its gasoline equivalent was the Audi e-tron, which will save its owner around £2,600 (€3,118) a year – or about £26,000 (€31,189) over its remaining ten-year lifespan – compared to the gasoline Audi Q5,” ECIU calculated.

The top-selling EVs were selected from data of second-hand car sales for YTD 2024 at AutoTrader, the UK’s number one online second-hand car site. They compared the Tesla Model 3 vs. BMW 320, Jaguar I-Pace vs. Jaguar E-Pace, Nissan Leaf vs. Nissan Juke, Kia Niro vs. Kia Sportage, Audi e-tron vs. Audi Q5, and Renault Zoe vs. Renault Clio.

Even the cheapest on the list, the Renault Zoë, will still save its owner an average of around £875 (€1,049) per year or about £8,750 (€10,496) over the ten years of its remaining lifespan when compared to an ICE Renault Clio.

No longer more expensive

The average savings for the six selected was £1,600 (€1,919) per year. “These figures are significantly higher than when we last analyzed the second-hand market in early 2023, largely because second-hand EVs are no longer more expensive to buy than their gasoline equivalents,” the ECIU states.

“Such savings may surprise many gasoline car owners since recent polling by YouGov for ECIU found that nearly two-thirds (62%) of gasoline drivers believe it’s more expensive to own and run an EV. Only 14% correctly recognized that an EV’s total ownership costs are typically lower,” the think tank adds.

Future EV tax considered

ECIU explains that since the average lifespan of a car is 14 years, and new vehicles are usually sold after four years, costs were modeled for the remaining ten years of each model’s life as a second-hand car.

This modeling was based on a combination of current costs (the purchase cost of the car, Vehicle Excise Duty, service and maintenance, insurance, and technical control (MOT) costs). It also considered known policy changes, like introducing a tax on EVs in 2025 (called VED) and projected energy costs (fossil fuel or electricity).

ZEV Mandate

The (former Conservative) British government’s Zero Emission Vehicle (ZEV) Mandate came into force on 1 January 2024 and requires car manufacturers in the UK at least 22% of new cars sold in the UK this year must be zero-emission, which generally means pure electric. That threshold will rise annually until it reaches 100% by 2035.

When they fail to abide by the rule or take advantage of flexibilities, such as carrying over allowances from previous years, they must pay the government £15,000 per polluting car sold above the limits. But automakers hope to negotiate a relaxation of the rules with the new government’s Transport Secretary, Louise Haigh.

Up to £40 billion in savings

“The EVs sold under the mandate will be crucial in supplying the second-hand market. This is where 82% of car sales occur, and will be crucial in enabling millions of households to transition to electric driving,” ECIU says.

ECIU’s analysis found “that the cumulative savings generated by the EVs sold under the mandate – from 2024 to 2035 – once they become second-hand, could approach £40 billion (€47.9 bln) by 2035.”

According to the British press agency PA Media, figures from the British Society of Motor Manufacturers and Traders (SMMT) show purchases of pure electric used cars are at record levels in the UK. Some 53,423 used EVs changed hands between July and September, up 57% compared to last year.

Belgian Renta’s cry of distress

In Belgium, the federation of leasing companies, Renta, appealed for help earlier this month. Renta Chairman and Ayvens CEO Johan Portier made it clear that the second-hand market “needs structural support, now.”

“The Belgian market is now like an island in Europe. With its heavy emphasis on company cars (B2B market) and the fact that they will all be EVs very soon, the second-hand market (largely B2C) has a big problem. It needs some support (fiscal or other) to wake up the electric B2C market before it’s too late.”

Renta says almost nobody wants to buy large and usually expensive EVs at their residual value price, which was determined four years ago. The evolution of the EV market is such that new, smaller EVs are technically and financially more interesting than the older ones.

Private buyers in Belgium—like the British—still believe it’s more expensive to own an electric car and are reluctant to buy one. Renta says the problem in the second-hand market for EVs has become acute.

Maybe investing in clear communication with accurate data to convince the average car buyer that EVs are becoming the cheaper solution instead of giving in to the ‘EV anxiety’ fed by social media and keeping on pushing hybrids would help the sector solve its ‘big’ problems.