Electric cars will cost as much to run as petrol after latest tax raid

ELECTRIC vehicles (EVS) will cost as much to run as fossil fuel after a fresh wave of Government tax rises.

Plans to charge EV drivers road tax from 2025 will make them equally expensive, new figures have shown.

Compare the Market found that annual EV running costs are currently £528 cheaper than fossil fuel cars.

Electric cars cost an average of £1,296 to run for 12 months compared to £1,824 for a petrol car, including petrol, tax and insurance and MOT.

A year ago the difference was £601. Any savings will be effectively lost when EV owners have to pay £165 a year in vehicle excise duty from April 2025, under plans in the Autumn Statement.

Many EV drivers will also have to pay the “expensive car supplement”, on cars worth £40,000 or more and will cost an additional £355 on average.

EVS subject to this include the Tesla Model 3, the Jaguar I-pace, the Kia e-niro and the Volvo C40 Recharge. The price comparison website said the combined £520 tax bill would “wipe out” the difference in the running costs between electric and petrol cars.

Nick Zapolski of Choose My Car, a car finance firm, said: “This new tax means that some will now be paying more for their road tax than someone in an old banger, which is not in line with the Government’s green credentials.”

Julie Daniels, of Compare the Market, said the “significant upfront cost” of buying an EV and installing a home charge point would prevent many from being able to afford the switch.

Ryan Fulthorpe, of Go Compare, another comparison site, said: “Traditionally, drivers of EVS enjoy environmental benefits and lower running costs – but if the Government’s longerterm plan on taxing EVS wipes out these savings, it would be a real own goal.”

Compare the Market said the average EV driver would pay £1,296 for fuel and insurance, while a petrol car driver would pay £1,824, including road tax. EVS were generally more expensive to insure than petrol cars, around £10 more. However, fuel was found to be £372 more expensive for petrol cars, and £202 more expensive than last year.

Higher energy costs have pushed up the price of charging an EV by £205 since 2021, Compare the Market found. Batteries have a shelf life of between 10 and 20 years. October data from the Society of Motor Manufacturers and Traders, a trade body, showed sales of battery EVS up 23.4pc year-on-year.

The Treasury said: “Electric vehicle registrations have increased 1730pc since 2016 and sales continue to reach record highs, which is why now is the right time to normalise their role on our roads even more by levelling the playing field on tax with petrol and diesel.

“We continue to support the EV revolution through over £2.5bn in incentives, including less year one road tax, nil-rating the Van Benefit Charge and grants to bring down buying costs.”