Electric cars too costly?

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I have blogged previously about my recent affair with hybrid cars, it was not a happy liaison. However I do still have an interest in finding a practical alternative to ‘traditional’ cars. Are electric cars – the industries next wave of tech, the answer?

Nissan will start taking orders for the Leaf next Wednesday, the UK’s first main stream electric car. Should
motorists considering buying such electric cars expect them to be more expensive or cheaper to run than conventional petrol vehicles?

Nissan says running costs for the Nissan Leaf will be as low as 1p a mile – very attractive compared to conventional cars. But figures by a rival car firm (Mitsubishi) suggest that over three years, electric cars could be more expensive to run than their petrol or diesel equivalents. Interestingly Mitsubishi also produces an electric car.

Unsurprisingly it appears that the high purchase price, and rapid depreciation, are what may make electric cars currently (excuse the pun) uncompetitive financially.

Comparative costs of petrol v electric cars; (Mitsubishi figures)

Fiat 500 Lounge 1.2 petrol v Mitsubishi i-miev electric car;

Purchase price
£10,610
£28,990

Registration
£55
£55

Road tax
£60
£0

Fuel
£3,280
£432

Servicing
£533
£300

Depreciation
£5,411
£14,785
Minus government subsidy for the elec car -£5,000

Total running costs
£9,339
£10,572

The company therefore calculates that running costs for its new i-miev electric car will be higher than for a Fiat 500 1.2, an equivalent petrol car.

Over a three year period, it says running the electric car would cost £10,572, excluding the cost of insurance.

The Fiat would cost £9,339, making it more than £400 a year more economical than the i-miev.

It is not however a straightforward calculation.

The cost of charging up an electric car from a domestic supply is relatively low – say between one and two pence per mile. Servicing costs are also lower than a petrol car, and road tax is free.

And from 1 January next year the government will also give a £5,000 subsidy to each electric car that is purchased in the UK.

But even that may not be enough to tip the overall economics in favour of electric motoring.

Some experts believe the cost of electric motoring will be even higher than the Mitsubishi figures suggest.
The trouble is that the batteries are very expensive, and eventually need replacing. Glass’s Guide, suggests depreciation may therefore happen much quicker than people expect.

To try and minimise this “battery fear” both Mitsubishi and Nissan will guarantee battery life. Mitsubishi says its batteries will be guaranteed for 62,500 miles, but should work, at least partially, for up to 100,000 miles. ( not sure what ‘partially’ means in this context!)

Insurance costs could also end up being higher for electric cars than for petrol cars.

The Association of British Insurers (ABI) says the relative risks have not been worked out yet.

Lower mileage and the lower speed of electric cars could reduce the premiums for their drivers.

But if the drivers are shown to be any more vulnerable in accidents, or if the theft of batteries becomes a problem, premiums could end up being higher.

The economics of electric motoring begin to look very different if you happen to live or work in London.

London congestion charge
£5,088
£0

Costs including congestion charge
£14,427
£10,572

Those in electric cars will not pay to come into the congestion zone, and for many people that would mean saving more than £1,000 a year.

Many London boroughs, including Westminster, also offer free parking.

According to Mitsubishi’s figures, anyone using the London congestion zone regularly could expect their motoring costs to be nearly £5,000 less over three years than with a petrol car.

But no other city in the UK has a congestion zone.

So the upshot of all this? If you’re looking for a good sensible purchase and value for money, I don’t think an electric car makes sense yet.

However in five or ten years time the economics may look very different because emissions regulations will make petrol and diesel engines more expensive.

Nissan claims that 12,000 customers have already expressed interest so I may be wrong! (however interest has to be converted to sales!)

There may be enough people who want to be seen as early adopters, who are attracted to the technology to make it a growth area. This might be similar to the ‘Prius effect’ in California – although I am not convinced.

Plus – the main ‘killer’ for me is range and lack of recharge points at this time.

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