How to calculate the running cost of an electric vehicle

Here we present the simplest calculation for working out the economic benefit of an electric car. Change the numbers to suit your case.

Annual Running Cost

Estimate the distance your travel in a typical year. To compare with a petrol or diesel car it is best to split this into an urban distance and a extra-urban (or highway) distance.

Let’s say we drive 12 000 km or 7500 miles every year. Let’s say 8000 km or 5000 miles of that is urban driving.

For an electric car we could find out the manufacturer’s technical specification for miles per kWh or km/kWh for that model, or we could check the US EPA database for the vehicle. Let’s say the EPA database gives us 30 kWh / 100 miles (126 mpg equivalent city, 101 mpg equivalent highway and 114 mpg equivalent combined). For this model the EPA database looks representative when compared to real world driving (see measured example at the end) so no extra pessimism is necessary. The simplest approach is to use 30 kWh / 100 miles * 7500 miles = 2250 kWh.

Then we need to multiply 2250 kWh by the cost for electricity with your tariff (assuming you mainly charge at home). Of course use cost per kWh with a public charger if you will mainly charge away from home.

Electricity prices have risen sharply in 2022 so the current electricity unit cost in 2023/4 in the UK is around 28p/kWh. Check your actual one from your electricity statement. Let’s say ours is 28p/kWh (including VAT). If you intend to charge almost exclusively using the off-peak tariff at night then that should be lower.

The cost to charge your electric car is 2250 kWh * £0.28/kWh = £630 per year

The cost to continue running the petrol or diesel car now needs to be compared. According to manufacturer technical specifications, a typical mid-sized family car with a small efficient petrol engine (equivalent to the battery electric vehicle analysed above) may achieve 7.0 l/100km (40 mpg) on urban driving and 4.7 l/100km (60 mpg) on extra-urban driving. So to cover 8000 km (5000 miles) of urban road and 4000 km (2500 miles) of highway should use 7.0 l/100km * 8000 km + 4.7 l/100km * 4000 km = 560 l + 188 l = 748 l. Now before we move on, we note that these figures come from before 2018 when real world fuel consumption was typically 10% more than the test cycle value for petrol cars (and 20% for diesels) [1]. 10% more gives around 820 l (litres). Petrol and diesel prices in the UK are tracked by the UK government and published here. Petrol has been hovering around 150 p/l in 2023 and diesel was around 160 p/l.

The cost of petrol for an equivalent petrol car is 820 l * £1.50/l = £1230 per year

A hybrid model with claimed fuel consumption of 3.5 l/100km (81 mpg) on urban driving and 3.6 l/100km (79 mpg) on the highway should have used 424 l or probably more realistically 465 l. The expected cost is 465 l * £1.50/l = £700 per year

A diesel model with claimed fuel consumption of 4.7 l/100km (60 mpg) on urban driving and 3.7 l/100km (76 mpg) on the highway should have used 524 l or probably more realistically 625 l. The expected cost is 465 l * £1.50/l = £1010 per year

Ok so that is running costs, but what about overall costs?

Lifetime Cost Averaged per Year

To get overall costs we need to include the cost to purchase the car and charger (if it is your first car), include any grants we can get (which is likely to be a contribution towards the charger), the cost to service the car, the expected cost of repairs, the cost of consumables such as tyres, the cost of insuring and the expected lifetime of the car. A basic internet search gives us 150 000 miles (240 000 km) for a petrol vehicle and 200 000 miles (320 000 km) for a battery electric vehicle. The reason given is that the electric vehicle drive train is simpler mechanically so the life is expected to be based on battery longevity, not engine or gearbox life.

For our example of 7500 miles a year, the lifetime could be 20 years for the petrol car and 26 years for the electric car (which would be good since internet searches generally give 15 years and up to 20 years in time rather than distance).

Cost Category	Battery Electric Vehicle	Petrol Vehicle	Hybrid Vehicle	Diesel Vehicle
Purchase	28 500	21 000	30 000	26 000
Charger	1000	0	0	0
Grant	-350	0	0	0
Energy per year	630	1230	700	1010
Insurance per year	655	520	600	560
Service per year	103	151	159	163
Consumables per year	100	100	100	100
Repair per year	103	151	159	163
Road tax per year	0	210	130	185
10 year total	45 060	44 620	48 480	47 810
Life (years)	20 years	15 years	15 years	15 years
Lifetime cost per year	3049	3762	3848	3914

The table shows that the cost of electric motoring is comparable to petrol, diesel or hybrid cars over 10 years for the case of 7500 miles travelled a year. Including the expectation of a longer lifetime means the cost per year for a battery electric car is expected to be lower than the others.

Keen readers will note that the resale value has not been factored in. Which vehicle type is likely to retain its value into the next decade? And which vehicle will have the highest scrap value at end of life? These questions are left to the reader to consider.

Other Cost Considerations

1. UK Road Tax. It is unlikely that the current levels of vehicle tax rates will continue as at present when electric vehicles become the majority and tax takings from this and the sizable takings from fuel duty reduce. An equitable approach would be to charge tax based on the carbon dioxide emissions from running assuming the electricity is the average UK grid mix. This would incentivise electric vehicle energy efficiency.
2. Reliability. Gauging reliability is difficult. In the absence of large scale customer surveys, possibly a reasonable indicator is the number of years the manufacturer agrees to provide an extended warranty for. If the manufacturer is confident enough to provide a long guarantee then that probably indicates an expectation of high reliability.
3. Adding inflation. To make the calculation more sophisticated (especially if you create your own spreadsheet) you can also take account of inflation or apply a discount rate (see Net Present Value in an encyclopedia). Additionally you could include the expectation of fuel and electricity price rises over the next decade. You may have an opinion on how much the carbon price may push up the cost of forecourt petrol and diesel.

Measured example

It’s all very well using theoretical figures and manufacturer’s claims, but what are the real running costs of a battery electric vehicle? Here are measurements for 4 entire years of (mainly urban) driving in a 1st generation family-sized car. The US EPA Fuel Economy and Environmental Comparison for this vehicle stated its efficiency was 30 kWh per 100 miles.

Year	Efficiency Achieved (miles per kWh)	Efficiency Achieved (km/kWh)	Gross cost (pence per mile)	Net cost after solar PV used (pence per mile)
2020	3.6	5.7	4.0	3.2
2021	3.8	6.1	4.8	3.6
2022	3.6	5.8	7.1	5.3
2023	3.7	5.9	7.1	5.2
4-year average	3.7	5.9	6.1	4.6

The first thing to note is that the achieved efficiency is close to and only a little better than the EPA value (achieved 27 kWh per 100 miles which is lower energy use than 30 kWh). The gross cost is what the cost would have been if using only grid electricity on the tariffs at the time. Because solar diversion was used whenever possible, the net cost is the cost for the remaining grid electricity purchased (the cost of the solar installation is not factored in here because it was already in place, so any cost savings are treated as a free bonus).

Click here to see how to calculate the carbon dioxide emissions for an electric car.

Click here for an overview of some useful electric car knowledge.

[1] “Mind the Gap! Why official car fuel economy figures don’t match up to reality”, Dings J (Ed.), Transport and Environment, March 2013, available at https://www.transportenvironment.org/