Are EVs Worth the Investment: Costly or a Money Saver?

Like with most renewable technologies I talk about, there’s always a balance to consider. I’m fully behind doing the right thing for the planet and recommending greener alternatives. However, I’m also a realist with plenty of commercial cogs turning in my brain. There’s always a benefit, but it’s crucial to decide what that benefit looks like for your present situation versus your long-term goals.

I had a conversation last week with a company—who shall remain nameless—that told me their ambition was to reach net-zero by 2030. Ambitious, sure, and maybe possible for some. I took a deep dive into their operations and commended their ambition, but I also told them, “I can help you do that, but I don’t think it’s the right thing for you.” They asked, “I thought you were all for renewables?” And I said, “I am, but my priority is ensuring your company remains solvent after reaching net-zero.” The lesson here is that every business is on its own journey, and no one-size-fits-all solution works.

Now, Electric vehicles (EVs) are becoming an increasingly popular choice for drivers looking to reduce running costs and cut their carbon footprint. But are they truly a money-saving alternative, or do the higher upfront costs outweigh the benefits? With the UK set to ban new petrol and diesel car sales by 2035, now is the time to weigh up the financial and environmental impact of making the switch.

The Cost of Buying an EV

One of the biggest concerns for potential EV buyers is the upfront cost. On average, an electric car is more expensive to buy than a petrol or diesel equivalent. However, prices are gradually coming down as technology improves and production scales up. The second-hand EV market is also expanding, providing more affordable options.

For those looking to make the switch without the full financial burden upfront, leasing and salary sacrifice schemes are becoming more common, offering a cost-effective way to drive electric.

Running Costs: EV vs Petrol and Diesel

While an EV may cost more initially, the long-term savings on running costs can be significant. Here’s how:

Charging vs Fuel Costs – Charging an EV is much cheaper than filling up a petrol or diesel car, especially if you can charge at home. A full home charge typically costs around £17 for a range of 220 miles. By comparison, driving the same distance in a petrol or diesel car could cost up to £45. With an EV-specific tariff, this cost can drop even further to around £8 per full charge, working out as low as 2p per mile.

Servicing and Maintenance – EVs have fewer moving parts than petrol or diesel cars, meaning less can go wrong. There’s no need for oil changes, exhaust replacements, or complex engine repairs, leading to up to 40% lower servicing and maintenance costs.

Tax Savings – Currently, electric cars benefit from lower Vehicle Excise Duty (VED). From April 2025, new electric cars will pay just £10 in their first year, compared to £120-£945 for petrol and diesel cars, before moving to a standard rate of £195 per year.

Government Grants and Incentives

While the UK government no longer offers grants for purchasing EVs, there are still incentives available to help with the transition:

• Grants are available for installing home EV chargepoints.

• Businesses can benefit from tax incentives when switching their fleets to electric.

• Scottish residents can access grants and loans to support EV adoption.

• Electric vehicles qualify for the cleaner vehicle discount on the London congestion charge until December 2025, with lower charges in clean air zones across the UK.

• Some local councils also offer perks like free parking or access to bus lanes for EV drivers, making them even more attractive for urban drivers.

How Long Do EV Batteries Last?

Battery longevity is another common concern. Modern EV batteries are designed to last between 10-20 years, with most manufacturers offering warranties of at least eight years or 100,000 miles. To extend battery life, it’s best to avoid charging to 100% too often, avoid running the battery too low, and keep it at a moderate temperature.

Charging Considerations: Home vs Public Charging

Charging infrastructure is improving, but home charging remains the most cost-effective option. If you can install a home chargepoint, you’ll benefit from lower electricity rates, especially if you take advantage of smart tariffs designed for EV owners. For those without home charging, workplace and public chargepoints are becoming more accessible.

Rapid chargers at service stations can be more expensive, but they provide a quick boost, making longer journeys easier.

Is an EV Right for You?

The decision to switch to an EV depends on individual circumstances. If you have access to home charging and drive regularly, the savings on fuel and maintenance can quickly offset the higher upfront cost. For city dwellers, lower congestion charges and potential free parking incentives make EVs even more attractive. However, if you frequently drive long distances and rely on rapid public charging, the cost savings may be less significant.

Fleets, Business Needs, and Future Disruptors

When it comes to transitioning your fleet to electric vehicles (EVs), it’s not as simple as swapping out old cars for electric ones. Every business scenario is unique—how you operate, the nature of your customer base, and the mobility needs of your workforce all influence whether EVs are a viable option. While EVs are becoming more mainstream, the UK’s charging infrastructure is still not quite where it needs to be to support large-scale, rapid adoption—particularly for companies that need to travel long distances or rely on fast-charging networks.

Right now, leasing or rental agreements offer the most practical and financially viable solution for many businesses. These options allow companies to make the switch to electric without the burden of high upfront costs, while providing the flexibility to upgrade as technology evolves. But as technology advances rapidly—take a look at the innovations coming out of motorsport, for instance—there’s always the possibility of disruptors emerging in the market. Alternative fuels and energy solutions may soon challenge EV direction, further transforming the landscape. Whatever the future holds, it's clear that innovation will continue to drive efficiencies, offering smarter solutions for businesses and consumers alike.

Final Verdict: Costly or Money Saver?

While electric vehicles (EVs) require a larger upfront investment, the long-term financial benefits are clear. Lower running costs, tax advantages, and reduced maintenance make them an economical choice for many drivers. Additionally, the environmental benefits of zero tailpipe emissions and the ongoing push towards sustainability ensure that the shift to electric motoring will only continue to gain momentum.

That said, every business and individual situation is different. While EVs make sense for long-term savings, it’s essential to assess whether the commercial benefits will add up now, next year, or in three years’ time. My advice will always focus on the biggest efficiency gains first, ensuring the savings have a measurable impact. Investments should be evaluated based on a variety of factors, including how soon those benefits materialise.

What I do know is that simply adopting EVs to "tick the green box" without fully understanding the broader impact is a mistake. Too many decisions made in haste can end up eroding your margins. The government, for example, may have made a few hasty decisions in the past that didn’t consider the full picture. We all want to move toward a greener future, but let’s not forget—we have businesses to run, and those decisions need to make sense today as well as in the long term.

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