Are Electric Cars the Answer to Rising Fuel Costs?

As diesel and petrol prices soar, many car owners are contemplating making the shift to an electric vehicle. In this article we will examine the pros and cons associated with this decision.  There are three areas we will examine:

1.  The initial cost of an electric vehicle.

2. The costs over the life of the vehicle.

3. The practicality of an EV in the current Irish EV support framework.

Looking at these areas we will see that the answers to many of the questions that arise are far from black and white.  There are vast shades of grey with individual circumstances playing a major role in determining what is beneficial and crystal ball gazing into the future of where industry and green politics will be.  The point really worth giving serious consideration to is that the factors we are looking at now are factors that are likely to change dramatically over the next decade.

Purchase Costs of an EV

If your motivation in purchasing an EV is to save on rising fuel prices then you firstly have to ask the question, is this the time I would normally trade my existing vehicle?  Do I normally change my car every two years, or five and is this out of kilter with my normal financial plans.  Secondly the opportunity to purchase an electric vehicle second-hand is unlikely with the numbers purchased over the last number of years being a very low percentage of vehicles on the road.  Also, with the advances in EV battery technology and range, it is probably advisable if one is to make that purchase to select from one of the latest models available.

However if you are changing your vehicle how does the initial purchase price of an EV compare to a conventional ICE vehicle?  In a mid price vehicle category (€30,000 to €40,000) you will need an initial budget of €5,000 to €10,000 extra to purchase an EV, even allowing for the €5,000 grant available.

Running Costs of an EV

The saving comes in the running costs associated with an EV.  Again there are variations here between car models, electricity charges, home charging and public charging stations.  Having a home charging station will cost less per kWh of electricity than public-charging stations.  When you do your research online about potential savings, beware that the figures used to display savings may be based on outdated electricity costs like 11c per kWh for night-rate electricity.  The reality is next May many will be paying 30c per kWh for electricity.  A guide for the short-term going forward is home-charging will be in the region of €3.00 to €5.00 for 200 km of driving while public stations may be in excess of €12.00.

In comparison this will still be about 1/4 to 1/3 of the expense of driving a petrol or diesel powered vehicle.

On average the payback in owning an EV in energy costs alone is about three years.

Home charging stations vary in price but a guide would be in excess of a €1,000.  With a grant of €600 euro, a home owning an EV can be fitted with an outlay of €500 approx.

An additional saving should be in servicing.  EV manufacturers are estimating the servicing costs associated with an EV will be about 70% of a comparative ICE vehicle due to there being fewer moving parts involved.  Over a 10 year period there is an approximate saving of €20,000 for an EV car in this category.  If you want an exact comparison between specific vehicles you will find extensive information on the Sustainable Energy Authority of Ireland website; www.seai.ie.  On this site there are 306 different eligible EVs featured, their price, a comparison savings calculator over similar ICE vehicles and a comparison estimate on the 10 year total cost of ownership.  There is also information about charging stations, grants and the application process.

EVs and the National Plan

There are very ambitious plans being spoken about at a national level.  Aiming to have 50% of the vehicles on the road being EV’s by 2030 is admirable but the reality for now is if 10% swapped over tomorrow morning would we even have an infrastructure with sufficient charging stations to support an increased EV fleet?  Not all car owners have the choice to install a home charging unit. If you are an urban dweller on the side of a public street, having a charging lead crossing a public foot path is not an option for lots of obvious reasons.  Also would our existing electricity power generating capacity cope with the increased demand?  With the already increased demand from existing industry pushing us to the point of near blackouts on peak demand days when coinciding with zero wind contribution, where is the additional power going to come from.  In a sector very much in the spotlight from Europe to reduce its greenhouse gases by eliminating coal burning plants like Monypoint and plans for new data storage centres going forward, there is an anomaly here that is not adding up. 

The Original Question?

So getting back to the original question, is now the right time to buy an EV?  Let’s take the scenario of spending an extra €7,500 on an EV and over the next three years saving back that extra spend on fuel and servicing.  In three years time is one in a better position having made that purchase?  What will be the value of a three year old EV versus a three year old ICE car?  Will the trade value of ICEs have plummeted or on the other hand will EVs have become more affordable?  Will the national electricity grid be able to support an increased EV fleet and will the government have lived up to their plans and rolled out a national network of charging stations? Will vehicle manufacturers have access to sufficient battery supplies to meet demands?  Sources in vehicle manufacturing project that with the best efforts in ramping up the mining resources required for battery production it will take until 2030 before they have the full requirements for 100% EV production.  These are questions that we can only speculate on but with Europe pushing the green agenda and car manufacturers making a serious shift towards EV production, it is difficult to imagine that nationally we will not have moved in a direction to accommodate this green change. 

Again situations vary.  If you are a two car family and are in need of updating one car and you have the option of being able to install a home charging unit there is a very strong case for one EV from a financial point of view.  If you have only one vehicle, would you go for an EV now?  Personally I would not consider the option unless the car was due to be changed but if a change was due I would give serious considerations to an EV, but again only if a home charging station was possible. 

There remains one last question, would I make the EV decision based on ethics and a green conscience? Well personally, as long as electricity is still being partially produced by fossil fuels, I would not be completely motivated by the green agenda but more by the financial benefits. I have no doubt that in future we will move to more greener energy production and EV’s will dominate transport but for now we are in a transition phase where EV technology has forged ahead of the roll out of green energy production and the infastructure required to support a national fleet.