Electric car running costs

Electric cars are becoming an increasingly popular choice for drivers, offering the potential for significant savings on fuel and maintenance compared to petrol or diesel vehicles. The average UK electricity unit rate for a Direct Debit household on the Ofgem price-cap default tariff from 1 July to 30 September 2026 is 26.11p per kWh (inclusive of 5% VAT). This makes electric driving substantially more affordable, especially when charging at home during off-peak hours.

Fuse Energy's mission to deliver abundant, cheaper energy directly addresses the primary variable in EV running costs, enabling significant savings through smart home charging and efficient energy management.

Managing your home energy, including your EV charging, can lead to substantial savings. Click here to see how Fuse Energy can help you take control of your energy bills.

The core cost: electricity versus petrol and diesel

The most substantial saving for electric car owners comes from the difference in "fuel" costs. Charging an electric vehicle (EV) is considerably cheaper than filling up a petrol or diesel tank. An EV charged on an off-peak tariff can be significantly cheaper per mile than petrol or diesel. Even at the household electricity cap, an EV still costs considerably less per mile than a petrol or diesel car.

Home charging versus public charging

Where you charge your EV dramatically impacts the cost. Home charging is almost always the cheapest option. Public rapid chargers are significantly more expensive. Some rapid charging networks charge high per kWh rates. For more information on how to charge your electric car at home, read our guide on electric car charging at home.

Optimising with smart tariffs

The biggest single saving for EV owners comes from utilising smart EV tariffs, which offer discounted rates during off-peak hours, typically overnight. Switching to a specialist off-peak tariff can significantly reduce charging costs compared to standard rates. This can translate to considerable annual savings for a typical driver.

Cost per mile comparison

The cost per mile for an EV can be very low when charging at home on an off-peak tariff. This compares favourably to the cost per mile for a petrol car. Over an average driver's annual mileage, the electricity cost could be significantly lower than for petrol, creating a substantial gap in annual energy costs if only home charging is used.

Beyond fuel: maintenance, tax, and insurance

While fuel costs are the most obvious saving, other factors contribute to the lower running costs of electric cars.

Reduced maintenance costs

Electric cars generally have fewer moving parts than internal combustion engine (ICE) vehicles, leading to lower maintenance requirements. Maintenance costs for EVs can be lower than for ICE vehicles. Over several years, electric cars can be cheaper to service. This is because EVs do not require oil changes, have fewer filters, and benefit from regenerative braking, which reduces wear on brake pads.

Vehicle Excise Duty (VED) and other taxes

Electric vehicles were exempt from Vehicle Excise Duty (VED) in the UK for a long time, but this changed on 1 April 2025.

• New EVs registered on or after 1 April 2025 pay a small amount for the first year, then a standard rate per year from the second year onwards.
• EVs registered between 1 April 2017 and 31 March 2025 are subject to the standard VED rate per year from April 2025.
• Older EVs registered before 1 April 2017 pay a reduced amount per year.

The "expensive car supplement" (luxury car tax) threshold for Zero-Emission cars increased from 1 April 2026. EVs with a higher list price registered on or after 1 April 2025 will pay an additional amount per year for years 2 through 6, on top of the standard VED rate.

Additionally, the government plans to introduce an Electric VED (eVED), a mileage-based tax, from April 2028. This will charge a per-mile rate for EVs and a lower rate for plug-in hybrid electric vehicles (PHEVs). Despite these upcoming changes, EVs are projected to remain significantly cheaper to run than petrol or diesel vehicles.

Understanding EV insurance

Electric car insurance premiums can be higher than for equivalent petrol models. This is primarily due to higher repair costs, more expensive components (especially the battery, which can represent a significant portion of the car's value), specialist labour requirements, and longer repair times. However, the gap is narrowing as competition increases, cheaper EV models enter the market, and repair networks improve.

Upfront costs and incentives

The initial purchase price of an electric car can be higher than a comparable petrol or diesel model, but government grants and incentives can help offset this.

Purchase price and government grants

The UK Government offers grants for car manufacturers to discount new electric cars that comply with the Zero Emission Vehicle (ZEV) mandate, providing discounts for eligible EVs. Buyers do not need to apply for these grants directly, as manufacturers handle the application process.

Home charger installation and OZEV grants

Installing a home EV charger is crucial for maximising savings through cheaper home charging. Fuse offers installation of the Easee One EV charger for £899, which includes full installation, surge protection, and a 3-year warranty.

The Office for ZEVs (OZEV) provides a portfolio of grants for eligible chargepoint installations, extended until 31 March 2027. Eligibility is specific:

• EV chargepoint grant for renters and flat owners: Up to £500 towards installation. Requires private off-street parking.
• EV chargepoint grant for households with on-street parking: Up to £500 towards installation for those installing a cross-pavement solution and only having on-street parking.
• Workplace charging scheme (WCS): Up to £500 per socket, for up to 40 sockets, for eligible businesses, charities, and public sector organisations.
• EV chargepoint grant for landlords: Up to £500 per socket, for up to 200 sockets, for public sector organisations, registered social-housing providers, private landlords, and property management companies.

It is important to note that a typical homeowner living in a house with private off-street parking is generally not eligible for these domestic chargepoint grants. For those considering a smart meter to help manage their energy, you can learn more about smart meter installation.

Long-term savings and total cost of ownership

Considering the total cost of ownership (TCO) over several years reveals the true financial advantage of electric cars.

Projecting future costs

While future energy prices are subject to change, the underlying economics favour EVs. Even with the planned pay-per-mile EV tax from April 2028, electric cars are expected to remain significantly cheaper to run than petrol or diesel vehicles.

The impact of energy supply choice

Your choice of energy supplier plays a critical role in maximising EV savings. Suppliers offering competitive electricity unit rates and smart charging solutions can significantly reduce the largest running cost for electric cars. Fuse's focus on delivering abundant, cheaper energy aims to insulate EV owners from future energy price volatility, ensuring long-term savings.

Maximising your electric car savings

Making the most of your EV's cost-efficiency requires strategic choices.

Smart charging strategies

The most effective way to save money on EV charging is to charge at home using a smart meter and an off-peak electricity tariff. The Fuse app allows connection of compatible EV chargers to support eligible dual-rate variable tariff usage patterns, helping EV owners maximise savings. For those interested in installing an EV charger, explore our guide on EV charger installation.

Choosing the right energy supplier

An energy supplier committed to providing cheaper, cleaner energy can make a substantial difference to your EV running costs. Fuse aims to deliver terawatt-hours of the cheapest, cleanest energy possible, directly reducing the largest variable in EV running costs. Choosing a supplier that offers efficient energy management and competitive rates helps put financial control into your hands.

Making the switch to electric

The financial benefits of switching to an electric car are clear, driven by lower "fuel" costs, reduced maintenance, and various incentives. While upfront costs and insurance can be considerations, the long-term savings and environmental advantages make a compelling case for electric vehicle ownership. By optimising your charging habits and choosing an energy supplier focused on affordability and efficiency, you can unlock the full financial potential of your electric car.

Ready to take control of your electric car running costs? Fuse Energy offers clear pricing, real-time usage data, and 24/7 human customer support to help you manage your home energy efficiently. Switching to Fuse is quick and easy, allowing you to start saving on your electricity bills from day one. Click here to switch to Fuse Energy today. You can also learn more about our mission to build a future with abundant energy here.