Electric vehicles (EVs) will have the same total cost of ownership (TCO) as an equivalent petrol model by 2024, new research claims. However, Autovista Intelligence analysis suggests that some plug-in models are already cheaper to operate than their diesel and petrol counterparts.
A new report from the European Consumer Organisation, Bureau Européen des Unions de Consommateurs (BEUC), called ‘Low carbon cars in the 2020s’, predicts that EVs will drop in price substantially over the next eight years.
The reduced purchase price and minimal running costs for EVs mean that by 2024 they will have the same TCO as petrol cars, the report says.
In subsequent years, EVs will offer substantial savings compared to petrol cars and by 2030, the TCO for EVs will fall to match equivalent diesels.
Cars of all fuel types will see their TCO fall in the long-term because of vehicle efficiency improvements being introduced by manufacturers, the report says.
TCO for diesel will initially rise as new car prices are expected to rise to account for more expensive exhaust treatment to reduce emissions in the wake of the Dieselgate crisis. However, costs compared to 2016 will have fallen by 2030 as new engines reduce fuel use.
The report argues that used car buyers will make the biggest financial gains from switching to EVs in future years. They will avoid the heavy depreciation that cars suffer in their first few years, but still benefit from the minimal fuel costs that EVs offer.
It says: ‘Used car owners benefit the most from lower fuel costs, but only pay a fraction of the depreciation costs.’
As the TCO of EVs falls, the report argues that governments will no longer need to subsidise plug-in vehicles with grants.
It suggests that grants are phased out between 2020 and 2030, although it adds that emission-free motoring can still be supported through a reduction in annual car taxes.
While the BUEC points to EVs reaching running cost parity with petrol and diesel vehicles over the next decade, Autovista Intelligence analysis shows that new car buyers can already benefit from a plug-in purchase.
For example, in France, over a replacement cycle of three years/ 45,000km, a BMW i3 Atelier A has a TCO of €27,793, €416 less than a BMW 1-Series 116 Sport petrol.
The EV has higher acquisition costs, depreciation and insurance costs. However, it benefits from much lower taxes and fuel bills.
Autovista Intelligence also compared a diesel, petrol and hybrid version of the Toyota Auris Design in France, over three years/ 90,000km.
The results show the hybrid has the lowest TCO (€29,984), more than €1,500 less than the equivalent diesel or petrol. In addition to lower fuel costs, the hybrid has strong residual values. This is because demand for Toyota hybrids has grown over several model generations as consumers have become more familiar with the technology.
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