The best thing about driving an electric vehicle (EV) of course is that you are making a contribution to managing the climate crisis and reducing global carbon emissions. That should be the main justification for making the switch to EVs, and you are also benefitting from cutting edge technology too, but on top of that it also makes sound financial sense to drive an EV, compared to a traditional petrol or diesel vehicle.

Here we will look at the main financial benefits to driving an EV and outline why it makes complete sense to make the switch now.

Government grants

The UK Government is committed to phasing out petrol and diesel vehicles by 2030, and has introduced a number of subsidies to encourage EV and hybrid vehicle take-up. Although the subsidy towards purchasing an EV or hybrid has reduced over the years, it still stands at £2500 off the purchase price, as long as the vehicle is in Category 1, which means it has CO2 emissions of less than 50g/Km and can run on zero emissions for at least 70 miles. This includes many vehicles from major manufacturers such as BMW, Hyundai, MG, Mazda, Nissan, Peugeot and Volkswagen. However, it should be noted that it makes even more financial sense to lease an EV than buy one. This is because you are only paying a monthly cost for the depreciation of the vehicle and not to own it outright, and because there are less mechanical parts to an EV, depreciation isn’t as rapid as with traditional vehicles.

Installation

You can also receive a Government grant towards installation of a home charging point, which equates to 75% of the installation cost, up to a maximum of £500. Home charging is slower than public charging, but is much cheaper, because you are only paying money to your utility supplier, whereas with a public charger you are also paying to use the charger.

Charging

You would choose an EV based on its battery capacity, and the more miles you do annually and the longer journeys you do, the bigger battery you need. Likewise, if you only do short city journeys, you only need a smaller battery and hence a cheaper car. But charging an EV is much cheaper than fuelling a comparable vehicle with petrol or diesel. Take the Tesla Model S for example. This has a 100 kWh battery, and public charging is typically 35p per kWh. So this costs £35 to fully charge, and you can get a maximum of 260 miles range from a full charge. Charging at home costs just 12p per kWh (but is much slower and usually done overnight) so just £12 to fully charge. Compare this to a full tank of petrol for a similar car, and this could be £70-£100. Bear in mind also that EV technology is still developing, so in a few years’ time charging could be even more cost-effective.

Tax

Zero emission EVs are exempt from road tax, offering another incentive to go Green, while plug-in hybrids and hybrids receive a reduced road tax bill.

Salary Sacrifice Scheme

If your employer runs a salary sacrifice scheme then EVs will be included in this, so you can receive all the benefits of driving and leasing an EV and make further savings through the salary sacrifice scheme. In effect, you have a portion of your salary removed each month to pay towards a non-cash benefit, in this case the cost of an EV, and this is taken on gross pay, so the amount of tax and national insurance you pay is reduced. You can contact Pink Salary Exchange here to discuss salary sacrifice schemes, and enjoy another great financial benefit to making the switch to EVs.