Electric Cars – Make hay while the sun shines?

The government has just announced its commitment to ban the sale of diesel and petrol-powered cars by 2040. Without getting into the debate of whether this signals progress for motorists or the death of the true “petrol-head”, but appreciating the environmental benefits that such a move would have, I started to think about the potential impact this will have on our economy.

It has been estimated that poor air quality, and the effect on health that this has had, has cost the UK economy £2.7 billion in one year in terms of lost productivity. Clearly, that’s not the sort of cost that can be ignored, however for 2016/17, the Office for Budget Responsibility expected fuel duty to raise £27.9 billion, 10 times that cost to the economy.

It would seem that the government is going to have to look elsewhere to make up this potential deficit when we all stop visiting the pumps to fill up our gas guzzlers, although they’ve got 23 years to work out where!

In the meantime, would it be sensible to jump on the band wagon now and purchase an electric car to benefit from some of the savings to be made? The government is offering grants of 35% of the purchase price (up to £4,500) for vehicles emitting less than 50g/km of CO2.

With the Nissan Leaf (other makes and models are available!) costing just over £21,000 for the basic model, that’s only £16,500 after the government’s grant, although this does come with a £70 per month battery leasing charge. A basic-spec’d VW Golf would cost around £1,000 more to buy, without the savings to be made from lower running costs (2p per mile for an electric motor rather than 9p per mile for a petrol engine) and vehicle tax (£nil for an electric vehicle and £140 for a small petrol engine).

Assuming that the vehicle is driven for 10,000 each year, the projected cost of each vehicle for the first 3 years would be:

Nissan Leaf VW Golf
OTR Price 16,500 17,500
Battery lease 2,520
Cost of “fuel” 600 2,700
Vehicle tax 420
Total 19,620 20,620


So, does a saving of £1,000 over 3 years outweigh the hassle of having a vehicle with a range of around 125 miles? That’s a decision for each car owner to consider, along with the green credentials that come with an electric car, but it’s certainly worth considering while grants are still available.


Blog written by: Nick Bartlett

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