Research finds electric cars DON’T have to cost more to insure than conventional cousins

‘Green’ cars outsold diesels for the first time in 2020 with 285,199 models with a degree of electric propulsion (BEV, PHEV and HEV) being registered in 2020 compared to 261,772 diesel engine cars.

Although new car sales in 2020 were around 29% lower than in 2019, electric vehicles have grown in popularity. Market share for all-electric BEV cars grew from 1.6% in 2019 to 6.6% in 2020, an increase of over 400%. Although sales numbers are small compared to petrol engine cars, demand for electric vehicles is growing rapidly.

With car insurance being one of the factors contributing to a car’s overall running cost, GoCompare Car Insurance examined the difference in insurance premiums quoted for an electric vehicle compared to its diesel engine equivalent.

When comparing premiums offered for a Volkswagen e-Golf, the average annual premium offered was £635.92. The most expensive being £787.54 and the cheapest being £495.10 – a difference of £292.44 a year.

When comparing premiums for a Volkswagen 1.6 TDI the average annual premium was £533.16. The most expensive being £659.68 and the cheapest being £459.84 – a difference of just £73.32 a year.

However, when comparing premiums for the Peugeot e-2008 and the Peugeot 2008 1.5 diesel, premiums for the electric model averaged £605.30 a year, £85.27 a year less than the £690.57 average annual premium quoted for the diesel variant.

Clearly not all electric cars are more expensive to insure than their traditionally powered equivalents.

The advice from GoCompare experts is that drivers switching to electric or hybrid vehicles must compare car insurance premiums carefully as some insurers are far more competitively priced than others. The most competitive insurer for a diesel car may not be the most competitive for the electric version, and vice versa.

Lee Griffin, CEO and founder of GoCompare Car Insurance commented, “The popularity of electric vehicles is growing quickly as all the major manufacturers rush to meet demand with electric variants of existing models and completely new electric cars such as VW’s ID.3 and ID.4. However, like all types of cars some insurers are keener to cover them than others and will quote premiums accordingly. EV drivers must shop around for the best deals as a competitive insurer for their old diesel car may be well off the pace when it quotes for a new EV.

“Some people may also be surprised to learn that electric cars aren’t always more expensive to insure and I think we’ll continue to see prices even out between electric and diesel/petrol vehicles. Insurers still have limited experience of the risk profile of EVs and this will develop as more of them come on to UK roads. For now though, drivers must compare premiums from different insurers carefully to ensure they get the right insurance at the best price and make the most of the savings electric driving can deliver.”

Read more: GoCompare

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The global electric vehicle market grew substantially in 2020, despite the impact of the coronavirus pandemic on the automotive industry.

According to the International Energy Agency (IEA), a record three million EVs were registered worldwide last year, a 41 percent increase versus 2019. By comparison, the global car market contracted by 16 percent in 2020.

Electric cars’ strong momentum has continued into this year, with sales in the first quarter of 2021 reaching nearly two and half times their level a year earlier, said the IEA.

In total, more than 10 million electric cars are now on the world’s roads. That’s in addition to one million electric vans, trucks and buses.

Europe overtakes China for first time
For the first time last year, Europe overtook China as the centre of the global electric car market. EV registrations in Europe more than doubled to 1.4 million during the year, while in China they increased by nine percent to 1.2 million.

The IEA says that, based on the current trajectory, the number of electric cars, vans, heavy trucks and buses on the road worldwide could reach 145 million by 2030. However, the global fleet could reach 230 million if governments ‘accelerate efforts to reach international climate and energy goals’.

“While they can’t do the job alone, electric vehicles have an indispensable role to play in reaching net-zero emissions worldwide,” said Fatih Birol, executive director of the IEA.

“Current sales trends are very encouraging, but our shared climate and energy goals call for even faster market uptake. Governments should now be doing the essential groundwork to accelerate the adoption of electric vehicles by using economic recovery packages to invest in battery manufacturing and the development of widespread and reliable charging infrastructure.”

Read more: msn

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Even though the Covid-19 pandemic hit the global automobile industry hard, causing it to contract 16%, electric vehicle sales grew strongly over the past year.

The findings come from a report by the International Energy Agency (IEA) which states that the number of electric cars, vans, trucks and buses on roads is forecast to grow from 11 million this year to 145 million by the end of the decade. If governments accelerate efforts to reach climate goals, that figure could grow to as high as 230 million by 2030.

The IEA found that a record three million electric cars were registered across the world last year, 41% higher than in 2019. That trend has remained resolute into 2021 with 2.5 times as many registrations recorded in the first quarter of the year as during the same period last year. That has been driven by strong sales in Europe and China of approximately 450,000 and 500,000 vehicles, respectively. The U.S. has also seen its sales double compared to the first quarter of 2020.

Consumers spent $120 billion on electric car purchases last year with governments providing $14 billion in subsidies to support sales, up 25% from 2019, primarily due to strong incentives in Europe. Those incentives have made a difference and 2020 was especially notable for the electric vehicle industry in that it saw Europe overtake China to become the world’s largest EV market for the first time.

The surging EV market is expected to wipe out demand for millions of barrels of oil. By 2030, existing policies could result in some two million barrels of petrol and diesel fewer per day with the equivalent of up to 120 million tonnes of carbon dioxide saved. If governments raise their goals in line with global climate targets, 3.5 million barrels per day could be removed from circulation with carbon savings nearly doubling.

Read more: Forbes

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Electric dream or motoring nightmare?

THERE’s still a lot of suspicion around pure-electric vehicles (EVs), and for some car buyers they’re still not the answer. But the number of electric cars on sale is increasing rapidly, and so is their appeal, meaning many drivers are taking the plunge.

In March 2021, electric cars made up 8% of all new cars sold, up from 5% in the same month the year before. Improvements in battery technology are reducing cost and charging times, as well as increasing energy density (and therefore how far they can travel per charge).

So on Earth Day 2021, and ahead of the ban on the sale of new petrol and diesel cars in 2030, we ask: is now the right time to buy an electric car?

How much does an electric car cost?
Electric vehicles are still more costly to buy new than internal-combustion alternatives. A Vauxhall Corsa e, for example, is around £5,000 dearer than an equivalent Vauxhall Corsa with a petrol engine. This is because battery packs are costly to manufacturer, at present.

However, car makers are offering great deals on new electric cars (Vauxhall covers electricity costs for the first 30,000 miles, for example), and eventually there will be cost parity: according to Bloomberg, a battery pack today is responsible for 30% of an electric car’s cost, down from an estimated 57% in 2015.

A few years ago, buyers were also put off by the expected rapid depreciation of electric cars, with their value plummeting further in the first few years of ownership than internal combustion engine (ICE) cars. However, this has proved not to be the case because battery packs are not deteriorating as fast as expected, and because electric cars are still relatively scarce. By some estimates, electric cars now retain their value better than ICE cars, and premium models such as Teslas, which are some of the most popular electric cars, are holding their value extremely well.

Some in the car industry believe incentives to encourage drivers to buy electric cars aren’t as strong as they could be. In order to end what a Whitehall source labelled the “Tesla subsidy”, the government last month reduced the scope of its Plug-in Car Grant (PiCG). The total that buyers are able to claim off the cost of a new electric car has been reduced from £3,000 to £2,500, while the grant is only applicable to cars costing under £35,000, rather than £50,000 as before.

However, there are still a number of vehicles covered by the grant, and they’re not just from quote-on-quote “budget” car makers — there are models from more premium car makers like BMW, DS and VW on which you can get a discount.

What are the running costs of an electric car?
Ownership of electric vehicles affords other benefits. Electricity costs vary depending on supplier and tariff but generally, if you charge up at home the cost per mile is much less than that of a petrol or diesel car.

In addition, electric cars don’t attract any Vehicle Excise Duty (VED, often referred to as “road tax”) for the first year of ownership, and if you live in London you’re exempt from fees in the Ultra Low Emissions Zone (ULEZ) and Congestion Charge zone.

If you’re considering getting an electric model as your company vehicle, it’s also worth bearing in mind that Benefit-in-Kind tax is just 1% on electric vehicles. That’s compared to at least 14% on cars with more than 50g/km of carbon emissions.

Maintenance costs should be significantly lower because an electric car is relatively simple. Aside from checking the brakes regularly and filling up the screen wash, most EVs don’t require much in the way of routine maintenance – there are no oils or filters to replace, no turbochargers to go wrong and no transmission to fail. So far, electric motors themselves seem to be very reliable — there’s effectively only one moving part.

It’s the cost of a replacement battery pack that puts off a lot of potential EV buyers, but there might be little to worry about on this front, too. Some EVs come with leased batteries, so they’ll just be replaced if necessary. When bought, most batteries have a warranty of around eight years years or 100,000 miles (whichever comes first).

What’s more, problems with battery packs might be traced to the failure of individual modules, which can be swapped out at minimal cost.

If you do need to fit a whole new battery pack you’ll potentially have to stump up some eye-watering amounts of cash. Manufacturing the 80.5kWh battery in a Tesla Model Y reportedly costs Tesla $9,250 (£6,670). Smaller batteries will obviously be cheaper to replace, but you’re still looking at £4,900 to replace the 40kWh battery in a Nissan Leaf hatchback.

But again, reliability after years of use seems to be pretty good and owners generally don’t complain of significant fade from older models.

How far can electric cars travel per charge?
There’s no escaping the fact that electric cars can be less convenient than internal combustion-engined alternatives. They often have a shorter range before they have to be refuelled (recharged), and that process takes significantly longer.

However, range is also improving significantly: the new Mercedes EQS can manage 479 miles on a single charge, while Tesla claims that the Model S Plaid can achieve a staggering 520 miles.

Those two are expensive electric cars but even the Peugeot e-208, which costs from £27,225, can manage more than 200 miles per charge.

Read more: DRIVING – The SUNDAY TIMES

It’s Time to Go Green!

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