Owning an electric vehicle in Europe could be cheaper than you think, new research shows

Are you one of those people who likes the sound of owning an electric vehicle (EV), but aren’t sure if now is the right time to jump on board the green motoring revolution?

Well, new research suggests the cost of owning and running an EV in Europe has never been more affordable. They’re now the same price or cheaper in terms of the total cost of ownership (TCO) than petrol or diesel cars, despite the rising prices for fuel and electricity, the data shows.

In their annual index, Leaseplan, a Dutch automotive lease provider, focused on different categories of cars in 22 European countries, with costs averaged over the first four years of a lease. The researchers say ownership costs such as energy/fuel, tax, insurance, maintenance and depreciation were considered.

The survey discovered that the costs of running a standard family car, such as a Volkswagen Passat or a Ford Kuga, were equal to or lower than petrol or diesel models in 19 of 22 European countries. Only in Italy, the Czech Republic and Poland were battery electric vehicles (BEVs) more expensive. Plug-in hybrid vehicles (PHEVs) were only cheaper than their fully-electric equivalents in one country, Italy.

The report says that: "Despite energy price inflation, fuel costs remain significantly lower for electric cars than petrol and diesel cars: fuel costs represent 15% of the total cost of ownership of an EV, while this is 23% and 28% for petrol and diesel drivers." It added, "EVs in nearly every segment and in nearly every European country are now the same price or cheaper than petrol or diesel cars."

According to previous research carried out by the company in 2021, electric cars could reduce drivers’ whole-life costs by up to 27% in comparison to petrol, diesel or hybrid versions. It estimated that buying an EV outright saves an average of $4,780 over a typical seven-year period of ownership.

The global appetite for EVs appears to be getting stronger. A record 6.5 million were sold worldwide in 2021 (including both fully electric and plug-in hybrid), nearly doubling the number of sales a year before, according to the International Energy Agency (IEA). It says EV sales made up 9% of the global car market in 2021, four times their market share just two years earlier.

More than 85% of global EV sales in 2021 were in two regions. China accounted for 3.3 million, while 2.3 million vehicles were sold in Europe. 10% of sales were in the United States where they more than doubled from 2020, reaching 630,000.

Around 16.5 million EVs were on the world’s roads by the end of 2021, three times as many than in 2018.

The IEA says that sales remained strong in 2022, with 2 million sold in the first quarter of that year, three-quarters more than the same period in 2021. It estimates that 13% of new cars sold in 2022 overall were EVs.

However, the IEA warns that the cost of producing EVs is subject to global market forces. It notes that prices for lithium used in car batteries were more than seven times higher in mid-2022 than at the start of 2021. It predicts that the cost of EV battery packs could rise by 15% if these prices remain high.

The continued growth of global EV use remains crucial to the decarbonization of the road transport sector, which is responsible for 16% of global greenhouse gas emissions, according to the IEA.

It says sustained policy support has been a crucial factor in the strong performance of EV sales in many markets, with a growing number of governments setting ambitious electrification targets. However, despite the impressive growth in the sector, IEA Director Fatih Birol warns that there is no room for complacency:

“Policymakers, industry executives and investors need to be highly vigilant and resourceful in order to reduce the risks of supply disruptions and ensure sustainable supplies of critical minerals. The IEA is working with governments around the world on how to strategically manage resources of critical minerals that are needed for electric vehicles and other key clean energy technologies.”