Should I Consider an Electric Car Given the Energy Crisis?
The war in Ukraine, energy demands in Asia, a fire at a Texas gas plant, and a bitterly cold winter in 2021 have put pressure on our energy supplies and caused a cost-of-living crisis. With energy prices at an all-time high, now may seem an uncertain time to consider buying an electric car. We’ll explore how the cost of running an electric car compares to petrol or diesel and the incentives available to buyers of electric vehicles (EVs).
There is no doubt that the cost of charging an EV has increased since 2021. However, fuel prices are also at an all-time high. Despite the energy crisis, it’s still cheaper to run an EV.
Whether you charge your EV at home or on the public network, you could reap annual savings of £1,200 in comparison to paying pump prices. Since home charging is currently the most convenient way to recharge your EV, make sure that you are on the lowest electricity tariff possible to keep your home energy bill down. For example, some providers offer an off-peak green energy tariff for overnight charging.
Another way to maximise cost-efficiency when charging is to use the best EV charging app so that you can use your nearest charging point. Pay-as-you-go rates are available, but a monthly subscription will give you access to local and international discounts.
As well as saving money on running costs, an electric car enables you to save on maintenance and servicing costs. This is because there are fewer moving and under-bonnet parts to fix or replace.
The government hopes to do its part in ending climate change by banning the sale of new petrol and diesel cars by 2030. However, although there has been a rise in sales of EVs since 2019, the upfront expense to buy an EV, along with a lack of sufficient charging points, has held back mass adoption so far. To overcome these issues, the government have provided some incentives that make the expense a little more palatable.
EV salary sacrifice schemes
An EV salary sacrifice scheme can work well for employers and employees who want to reduce their tax liabilities. The scheme enables employees to pay for an EV through their gross salary and then only get taxed on the remaining amount. Since employers also save on tax through these schemes, some even include a charger, insurance, breakdown, and servicing as a package.
EV charge point grants
As part of the government’s strategy to make it easier for people to charge their EVs, you can receive up to 75% towards the cost of installation of an EV charger. You can then charge your vehicle at home without having to go to a charge point on the public network. Furthermore, if you charge overnight, you can take advantage of green energy tariffs that cost as little as 3p per mile.
Clean Air Zone charges
If you drive in a city with a Clean Air Zone, you may be able to avoid the daily fees of driving in the zone with an electric car. You can check whether your EV meets the zero emissions standards on the government website for parking, public transport and the environment.
Road tax or Vehicle Excise Duty is calculated on the basis of your CO2 tailpipe emissions, so full-battery electric vehicles are currently exempt until 2025. However, if your EV is worth more than £40,000, you will be liable for the expensive vehicle supplement of £355.
While EVs are more expensive to buy at the moment, they are predicted to come down in price as the ban on traditional petrol or diesel cars draws closer. EVs are also cheaper to run despite the rising energy bills, and there are several government incentives available that make buying an EV much more affordable in the long term.