Analysis: while the cost savings are clear and future-proofed, the public still need some convincing about going electric
It is widely agreed that we need to move away from fossil fuels to protect the environment, but what will that cost you? Here, we are going to break down the cost of owning an electric car over five years. It is worth noting that it is highly likely that tax on fossil fuels will be increased in the coming years and that electricity costs will remain largely unchanged for the next five years.
First, we need to estimate total cost using current data. Then, we will recalculate using projected fuel and electricity costs over the same period.
For this evaluation, we will compare two options from Volkswagen, the ID.3 Life (58kWh) and the Golf Style, equipped with the most fuel efficient 2 litre diesel combined with an automatic gearbox. Including the cost of a home charger, the ID.3 will cost you €37,620 and the Golf will cost €37,770. This very similar purchase cost allows us to focus on running costs.
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From RTÉ Radio 1's Brendan O'Connor Show, Norman Crowley from the Cool Planet Group talks about Electric cars and making that switch
How much does it cost to stay on the road right now?
What will each cost to run assuming you drive 16,000km a year? For the Golf, this is very simple to calculate. The Worldwide Harmonised Light Vehicle Test Procedure (WLTP) estimates the Golf will consume 4.7 litres of fuel per 100 km. With a litre of diesel currently costing €1.35, your annual fuel bill would be €1,015 plus annual road tax of €200 and estimated service cost of €600.
The cost to charge the ID.3 will depend on when and where you charge. Let's assume that you want to maximise cost saving so you charge at night and at home using the 10.49c/kWh rate currently available. Your annual electricity cost will be €260, plus an annual road tax of €120 and an estimated service cost of €300. Insurance costs were based on a 31 year old male teacher with over six years no claims bonus and came to €502.62 (ID.3) and €494.73 (Golf) from AXA.
Total running cost for the Golf over 5 years: €11,550
Total running cost for the ID.3 over 5 years: €5,912
Yes, there's a considerable saving of €5,637, but it is important to note that this is based on specific use. Charging during the day only and some use of a rapid charger could see this drop to approximately €4,500. This is also based on a currently very low diesel price which will increase in the next five years. So taking projected costs and possible government taxation decisions into account, what's a more realistic estimate of ownership cost over the next five years?
Will electric car costs go up or down?
Due to considerable investment in alternative energy generation in Ireland it is likely that our electricity costs will remain stable for the next five years. Current low diesel prices are likely to continue to rise as global economic activity rebounds from historic lows. The price at the pumps will rise further based on the government’s commitment to focus on a carbon taxation model.
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From RTÉ Radio 1's Drivetime, Declan Meally from the SEAI on government grants for electric vehicles
But direct fuel costs are only one factor. It is likely that combustion powered vehicles will also face additional city centre based levies, as seen in many of our European neighbours. This combined with additional VRT charges on internal combustion engine vehicles will make them an expensive option in the years ahead.
But for the sake of simplicity, let’s focus on fuel price projections for this comparison. With a resurgence in global fuel prices and future taxation, it is likely that one litre of diesel fuel will cost approximately €2 in 2026. To account for the five year window, let’s take an average cost per litre in that period of €1.65. This is probably a conservative average estimate as 10 year fuel price trends would have reached this cost without additional taxation.
This would result in a €6,765 saving by going electric.
However these calculations do not take depreciation into account. Autotrader UK is currently recording an average of 24% depreciation for internal combustion engines and 12% for electric in 2020. While this gap is likely inflated, it is still probable that electric will cost you less when time to sell. If you decide to keep your electric car longer, the savings start to make more sense. The long-term servicing cost of an internal combustion engine car far exceed that of electric vehicles, with complicated turbo and gearbox systems being especially costly to repair. Critics would point to battery cost replacements, but the benefits will still stand with generous warranties and a rapidly decreasing cost in lithium-ion battery technology.
Overall, the cost savings are clear. However, adoption will be limited until the public builds trust in the new technology. Concerns like range anxiety may be irrational, but they are none the less powerful. There are also barriers for those living in rented accommodation or in densely populated areas.
One final note: while Worldwide Harmonised Light Vehicle Test Procedure figures are considered more accurate than previous estimates, all cost/environmental figures delivered by VW should be taken with a considerable pinch of salt given their corporate history around emissions.
The views expressed here are those of the author and do not represent or reflect the views of RTÉ
