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Why are electric cars so expensive?

Why are electric cars so expensive?
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Electric cars are viewed by many as one possible way to reduce carbon emissions. But have you wondered why electric cars are still so expensive?

We take a look at the answers to some important questions.

What is the typical cost?

The Tesla Model 3 is used as an example of how pricey an electric car can be. This is because it costs more than £42,000.

But the Tesla Model 3 is expensive for the same reasons that a Mercedes E-class estate is expensive. Because it’s a high-quality, high-performance vehicle. Therefore, it’s available at a high-end price.

These days, you don’t have to make such a large financial commitment if you want to buy an electric car. There are electric vehicles available in today’s market at much more affordable prices.

Well-known brands such as Kia, Peugeot, Renault and Vauxhall have all launched electric cars that are a fraction of the price of a Tesla. They all have models which are typically priced at around £26,000.

Are electric cars more expensive?

It’s certainly possible to buy an electric car that is cheaper than a Tesla. However, they are still considerably more expensive than their fossil fuel equivalents.

For example, the Skoda Citigo-e iV electric car costs £15,000 brand new. But the petrol version of the Citigo with a 1.0-litre engine could cost around £10,000 or less.

Why are they more expensive than fuel vehicles?

If you are wondering why electric cars are so expensive, there are a number of reasons for this.

Market age

The electric vehicle market is still new, especially when compared to the traditional fuel vehicle market. The new and second-hand fuel car market is made up of millions of cars at a wide range of different price points.

It is fair to assume that the price of electric vehicles will fall as the market grows and matures. But at the moment, electric cars remain expensive when compared to petrol cars.

New technology

As with many machines built with new advanced technology, the first generation tends to be the most expensive.

Prices are likely to fall with further research and development into the technology behind electric vehicles.

Insurance

Another disadvantage of buying a vehicle with more advanced technology is that they can be more expensive to insure because they are typically more expensive to repair.

The cost of electric vehicle insurance is likely to become more competitive as the size of this market grows.

What about running costs?

Comparing the running costs of an electric vehicle with those of a fuel-run vehicle will be dependent on your personal circumstances.

While insurance for electric vehicles can be more expensive, they are exempt from road tax. If you live in London and you drive an electric car, you do not have to pay to enter the Ultra Low Emission Zone.

The big difference in running costs is the cost of electricity versus petrol. But the saving or extra expense will depend on how often you use your vehicle and for how long.

Also, if you decide you only want to charge your car at home, you may want to consider investing in a home charging point.

If you decide to buy your car using a car loan then this will be an additional regular cost, albeit for a set period.

Take home

It’s worth taking your time and doing some research if you are thinking about buying an electric vehicle.

Early indications show that future generations of electric vehicles will be cheaper and more efficient. So, if you can afford to wait, you could make a substantial saving.

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