Jessica Lindsay
Published November 26, 2025 2:43pm
Updated November 26, 2025 2:57pm
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Going green can work out cheaper (Picture: Getty Images)
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In today’s Autumn Budget, Rachel Reeves announced a new charge on electric vehicle excise duty of up to at 3p per mile.
The Chancellor says this will double road maintenance funding, and offer a further £200 million for new public charging charging points – but it’s likely to raise costs (and concerns) for many electric car owners.
While EVs are good for the environment, the draw for many is that they’re typically pretty good for your wallet too.
For one, you don’t have to buy petrol or diesel, and because they have fewer moving parts than a traditional combustion engine car, maintenance can work out cheaper in the long-run.
Then there’s the tax, which is lower thanks to government policies to incentivise reduced carbon emissions.
There are still costs to consider, from the energy used for charging to servicing and insurance, along with this new duty set to come into effect after a consultation.
So, how much money can driving an EV really save you compared to a non-electric counterpart? If you’re thinking of making the switch, we break down the figures.
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Previous Page Next PageDoes it cost more to buy an electric car?
When it comes to buying the vehicle itself, you’ll likely pay more for an EV, in part because there are simply more combustion engine cars out there.
It all depends on the model you choose though, and whether it’s new or used.
It all depends on the model you choose (Picture: Getty Images)
According to the RAC, the cheapest new EVs currently available in the UK start at around £21,000 (once the government-funded purchase grant has been deducted) while secondhand ones can be found from as little as £4,500.
On the higher end, you’re looking at nearly £160,000 for a brand new top-spec Porsche Taycan, or £99,000 for a Tesla Model X.
Meanwhile, the average price for a petrol car on AutoTrader now sits at £14,850, with the cheapest new model (the Dacia Sandero) coming in at £14,715.
How much does it cost to charge an EV?
The cost to charge an EV will vary based on the size of the battery and where you’re charging it.
As of January 2025, the average pay-as-you-go (PAYG) cost to charge an EV on the UK’s public network are approximately 53p per kilowatt-hour (kWh) – about 16p per mile – for standard chargers or 81p per kWh – about 24p per mile – for rapid and ultra-rapid ones.
Charging at home typically works out cheaper (Picture: Getty Images)
It’s typically cheaper to charge at home though, especially if you take advantage of specialist tariffs targeted towards EV owners that offer lower rates for nighttime energy usage.
Using the average UK electricity price of around 27p per kWh and average electric car mileage of 3.5 miles per kWh, EDF Energy calculates a cost of 7.7p per mile.
Compare this with fossil fuel, unleaded petrol currently costs £1.36 per litre on average in the UK, with diesel at £1.43. A petrol car gets approximately 36 miles per gallon (MPG) of fuel, equating to 19p per mile, with the average diesel car at a consumption rate of 43 MPG costing 13p per mile.
Electric vehicle maintenance costs
‘Most electric vehicles need servicing much less frequently than either petrol or diesel cars,’ the RAC website explains. ‘For example, Renault recommends intervals of 18,000 miles for the Zoe, compared to 9,000 miles for its petrol cars.’
Mechanic visits can be cheaper too, as EVs have fewer parts than internal combustion cars which means less to fix or replace. That said, in the – albeit unlikely – event the battery fails out of warranty (typically around eight years), you could face a substantial bill of up to £15,000.
There are fewer moving parts in an EV compared to a petrol-powered car (Picture: Getty Images)
Like all cars, electric vehicles need an annual MOT once they’re three years old – and the price of this will be roughly the same as usual, but you may be able to snag a better deal because no emissions test is required. You’ll also still need to factor in wear and tear-based expenses such as replacement filters, brake pads and tyres.
While the amount you’ll pay for maintenance depends on all sorts of factors – from the make of car to whether you have a monthly service plan – a study by CAP HPI found it costs an average 23% less for an EV than a fossil fuel-powered car over a typical three-year, 60,000-mile ownership period.
And the difference is even steeper when it comes to smaller vehicles; a Renault Zoe, for example, will cost £1,100 to maintain over that period, while a Vauxhall Corsa 1.0T 90 Design costs £1,497, an increase of 35.7%.
Tax on EVs
Fully electric cars used to be road tax exempt in the UK, but this is no longer the case.
As of April this year, the rate of tax for an EV is based on when the car was first registered, with three different tiers:
- For those registered after April 1, 2025, the first year vehicle tax rate is set at £10, rising to the standard rate annual rate of £195 from there.
- For those registered between April 1, 2017 and March 31, 2025, the standard rate of £195 applies.
- For those registered after March 1, 2001 and before March 1, 2017, the tax rate is set at £20 per year.
However, EV drivers can expect an average of £250 a year added to their tax bill following the changes posed in Rachel Reeves’s latest Budget, which are expected to be rolled out in 2028 following a consultation.
According to the Chancellor, the new charge ‘will be payable each year alongside vehicle excise duty at 3p per mile for electric cars and 1.5p for plug-in hybrids.’
EV road tax rules have now changed (Picture: Getty Images)
Road tax for an internal combustion engine car also depends on its age and list price when new, with a standard rate of £195 a year for those registered between April 1, 2017 and March 31, 2025.
However, under new rules, CO2 emissions can greatly increase tax in the first year for new vehicles – up to a total of £5,490 for models that emit 255g/km or more.
Regardless of whether it’s electric or petrol-powered, any car registered after April 1, 2025 with a list price exceeding £40,000 will also be subject to an expensive car supplement of £425 per year between the second and sixth years of ownership.
The rules are a little different for cars registered from March 1, 2001 to March 31, 2017, with 13 tax bands based on CO2 emissions ranging from £20 to £760 annually. Cars registered before this period (unless eligible for historic car exemption) are taxed based on engine size, with two bands set at £210 and £345 a year.
Electric vehicle insurance
Alongside purchase price, insurance is one of the few areas where EVs can be more expensive than combustion engine cars.
The average annual cost of insurance for an electric vehicle currently sits at £587, according to MoneySuperMarket. For both petrol and diesel car, the averages are quite a bit lower, at £501 and £538 respectively.
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There are a few reasons for this: as a rule, more expensive cars (which EVs often are) cost more to insure, but premiums may also be impacted by the high price of battery replacement or lack of available EV parts and skilled automotive technicians.
Congestion charge and ULEZ
Driving in London can be significantly cheaper in an EV, as they’re eligible for an exemption from the Congestion Charge and are also not subject to the Ultra Low Emission Zone (ULEZ) charge.
The Congestion Charge exemption isn’t automatic, as drivers will need to register their electric vehicle with Transport for London at a cost of £10 and renew this each year.
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As long as that’s done though, you’ll save £27.50 per day to drive in London versus a non-ULEZ compliant car.
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