There is no single real cost of an electric car: it depends on the car, confirmed incentives, how you pay, how far you drive, where you charge and what the car is worth when you sell it. For a fair comparison, total the costs over the same ownership period for an electric car and a similar petrol or diesel car, then subtract resale value. The worked grant and tax examples below are UK-specific; rules, tariffs, fuel prices and incentives differ by jurisdiction.
What costs belong in the calculation?
Use the same period—such as three or five years—and the same annual mileage for both vehicles. Compare cars of a similar size and equipment, and include the costs that apply to your circumstances.
Net ownership cost = purchase price and required fees − confirmed grants or incentives + financing cost + charging or fuel + insurance + maintenance and repairs + vehicle tax + home charger and installation, if needed − resale value.
- Purchase and fees: Use the price you would actually pay, including required fees. Subtract a grant only after confirming that the specific vehicle and purchase qualify.
- Finance: Include the cost of borrowing, such as interest and fees. If you instead total all finance payments as cash outflows, do not also count the financed purchase principal; that would count the same cost twice.
- Lease: Add lease payments and applicable upfront costs rather than purchase price and resale value.
- Running costs: Include electricity or fuel, insurance, maintenance, repairs and vehicle tax over the period.
- Charger: Add the purchase and installation cost of a home charger only if your situation requires one. A government charging example excludes installation, so it is not an all-in home charging price.
- Resale: Subtract the expected sale or trade-in value at the end of the period. Depreciation is the difference between the purchase price and that value.
The IEA’s total-cost-of-ownership framework identifies financing assumptions, vehicle and energy costs, residual value, annual distance and home-charger installation as relevant inputs. Its tool was last updated in 2022, so it is useful for structuring a comparison, not for current default prices: IEA electric vehicle total cost of ownership tool. The European Commission’s calculator also includes purchase price, depreciation, maintenance, insurance and a selected ownership period: European Commission vehicle comparison calculator.
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How much does an electric car cost after the UK grant?
First establish whether a grant applies to the exact car you plan to buy. UK Electric Car Grant eligibility is limited to approved vehicles registered in England, Scotland, Wales or Northern Ireland. The guidance sets a maximum recommended retail price of £37,000 and lists grant bands of £3,750 and £1,500, tied to eligibility and sustainability criteria. Being electric—or seeing a grant mentioned in an advert—does not by itself mean a particular purchase qualifies. Check the current approved-vehicle list and buyer process before subtracting anything: UK Electric Car Grant eligible vehicles and guidance.
For a qualifying car, the starting calculation is its actual purchase price plus required fees, minus the confirmed grant. Then add finance and ownership costs and subtract expected resale value. Keep the grant separate in your working so you can change the result if eligibility, the purchase date or the applicable band differs.
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How much does it cost to charge an electric car?
Estimate annual electricity expense from distance, vehicle consumption and the electricity price you actually pay. If you use both home and public charging, calculate each share separately; public rates and home tariffs can differ substantially.
- Find the car’s energy consumption in kWh per mile or per 100 km. Prefer a figure that reflects your expected use, and note whether it is a published estimate or your own observed consumption.
- Estimate annual distance. Multiply distance by consumption to find annual kWh. For example, miles per year multiplied by kWh per mile gives annual kWh.
- Split that energy between home and public charging using realistic shares for your routine.
- Multiply each share by the applicable unit price, then add them. Use your current bill or tariff details for home electricity and the prices you expect to pay for public charging.
- Add a home charger and installation cost if you need one, keeping that one-off cost distinct from the recurring electricity bill.
For a UK illustration, government consumer guidance describes some home tariffs at 2p per mile and a possible annual running-cost saving of up to £1,400. These are conditional examples, not a guaranteed price or saving for every driver: the outcome depends on the tariff, charging times, vehicle efficiency and the other costs in the comparison. The guidance warns that energy prices and charging times affect results: UK government guidance on electric vehicle costs.
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The same page presents a worked charge example using 8p per kWh, consumption of 13.1 kWh per 62 miles and a stated range of 259 miles. On those assumptions, it calculates £4.38 for a full charge; it describes such tariffs as available as of April 2026. The calculation is not a universal price: actual cost depends on supplier, charging time and setup.
How much can running costs differ from petrol?
The UK government’s worked comparison assumes annual driving of 16,000 km (10,000 miles), EV consumption of 18.5 kWh/100 km, petrol consumption of 8 L/100 km, electricity at 7.5p/kWh and petrol at 143p/L. The electricity price represents a sample intended to reflect home EV off-peak tariffs in 2025; the petrol price is based on 2025 Department for Energy Security and Net Zero weekly prices. The page estimates annual insurance plus maintenance at £1,680 for the EV and £1,490 for the petrol car, attributing those estimates to Element Energy work last commissioned by the Department for Transport in 2021.
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| Worked annual running-cost item | Electric car | Petrol car |
|---|---|---|
| Energy or fuel, using the stated consumption and price assumptions | £222, calculated as 18.5 kWh/100 km at 7.5p/kWh over 16,000 km | £1,830, calculated as 8 L/100 km at 143p/L over 16,000 km |
| Estimated insurance and maintenance | £1,680 a year | £1,490 a year |
| Total under the page’s assumptions | £1,902 a year | £3,320 a year |
The resulting difference is £1,420 a year in that worked comparison. The same government page describes potential savings as “up to £1,400” and says its costs are expected over a three-year period. These are estimates based on the specified assumptions, not a personal forecast or a full ownership-cost comparison: they do not establish your purchase price, finance, tax, charger installation or resale value. Change the mileage, actual tariff, fuel price and insurance and maintenance figures to fit your case.
Separate UK government guidance, last updated 10 April 2025, cites independent research suggesting average savings of £700 a year and says a person buying a new EV the following year could recoup an additional upfront cost within five years. Those are dated, broad estimates; they do not replace a calculation using your vehicles and costs. The guidance also discusses vehicle excise duty and company-car tax as of its publication date, so check current rates for your registration date and circumstances: UK government guidance on zero-emission vehicles and road pricing.
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How to compare the total with a petrol or diesel car
Repeat the same calculation for a similar petrol or diesel vehicle over the same ownership period and mileage. Use comparable insurance quotes, maintenance estimates, tax treatment and realistic resale values; do not compare the EV’s total ownership cost with only the other car’s fuel bill.
- Choose equivalent vehicles and a period, such as five years, with the same annual distance.
- Enter each vehicle’s actual purchase price, required fees and any confirmed incentive.
- Use a consistent payment method for both: show finance costs separately, or compare lease cash flows, without double-counting purchase principal.
- Estimate charging and fuel using each vehicle’s consumption and the prices you expect to pay. For an EV, separate home and public charging where relevant.
- Add insurance, maintenance, repairs, tax and any charger installation that applies.
- Subtract each vehicle’s expected resale value. Compare the final totals; divide each by total miles over the period if a cost-per-mile view would help.
The result is personal rather than universal. Lower home-charging costs and lower maintenance may help an EV, while a higher upfront price, insurance, depreciation, public charging or a different mileage pattern can alter the outcome. A UK Parliament answer on 19 March 2026 said potential savings depend on home off-peak charging and cited the government’s published breakdown. It also referred to an estimate of around £20 per month under proposed eVED rules from 2028, about half the equivalent petrol-car rate. That was a dated policy estimate, not a current bill or a settled tax amount: UK Parliament written answer, 19 March 2026.
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