The Financial Truth of EVs vs. ICE TCO

Most compare the upfront costs of electric vehicles (EVs) and internal combustion engine vehicles (ICE) and conclude that EVs are more expensive to own. This is not the financial truth however, as that unfolds over the long term. 

While EVs are more expensive upfront, there are many additional factors which need to be accounted for to really compare the total cost of ownership (TCO). The factors you must consider are fuel savings, lower maintenance, tax incentives, and long term reliability. The practical variables of the divers is when EVs can become a real financial no brainer. 

Fuel Savings:

The first factor I will explore is Fuel Savings, in almost every scenario charging an electric car will be cheaper than refueling your average petrol car. There are two primary ways to charge your electric vehicle, at home or at a public charging station. Charging at home is the recommended option as you can take advantage of the night rates for electricity, this causes home charging to be significantly cheaper. 

The average electric car consumes around 17kWh per 100km. If you utilise off peak hours to charge, it costs €0.08 per kWh. This means it costs you around €1.40 per 100km. When compared to the best selling car in Ireland 2024 - Hyundai Tucson - which averages 7L/100km at a cost of €1.715 per litre for a total of €12. This means for the same 100km it will cost you €10.60 more. 

The average Irish driver travels 16,867 kilometres a year, this means driving a petrol car will cost you an average of €1,788.75 more a year! Needless to say it is cheaper to charge an electric car.

Maintenance costs:

EVs have significantly reduced maintenance costs over their lifetime. This, in part, is due to the reduced number of moving parts. There are no oil changes, sparkplugs, exhaust systems or transmissions which have hundreds of wear points. EVs also produce a significant amount of data which allows you to predict and schedule maintenance, this reduces major repair surprises. 

Another significant factor in reducing an EVs maintenance cost is their regenerative braking, this technology allows EVs to recoup battery by converting kinetic energy to electricity and sending it back to the battery. In this process it also creates a magnetic field which opposes the motor’s rotation slowing it down, this reduces the wear on the brakes as the motor handles some of the slowing. The AAA states that an EV costs $330 less than an ICE for maintenance annually.

Tax Incentives: 

Tax rebates or exemptions can significantly reduce the TCO of an EV. In Ireland there is a grant for up to €3,500 for EVs between €14,000 and €60,000. This can reduce the brunt of the initial cost price. Another incentive is the increasing tax on carbon emissions. Ireland is committed to increase the tax on carbon until it reaches €100 per tonne of CO2 emitted by 2030. This means it will only continue to get more expensive to fuel your petrol car.

Practical Variables:

The practical variables in a driver's life is where EVs can become a financial no-brainer. If an EV fits into your life the TCO advantage will significantly increase.

For example: 

• If you can charge off peak hours at home, your running costs significantly drop.

• If your annual mileage is above the average, your fuel savings will compound quicker.

• If your daily driving range fits within the typical EV range, you will eliminate charging inconveniences and rely solely on cheap home charging.

When these factors align, an EVs savings compound and become a financial no-brainer.

Commercial Savings:

For commercial fleets, the TCO advantage of EVs multiply even further. A company could have hundreds of vehicles in their fleet which can provide substantial savings when electrified. Every saving in fuel, maintenance and tax multiplies across the whole fleet.

At EVE, we provide fleet operators with a simulation and analysis of how to transition their fleet effectively, this allows them to seize the savings while aligning with their operational goals.