Are electric cars really too expensive?

8 mins read


There are two problems with electric cars: they take too long to charge compared to how far they can go and they cost too much money.

In the eyes of many people those are very good reasons for not getting one, as highlighted by lots of the comments on my review of the Renault Zoe that I recently spent a fortnight with.

This is an important consumer issue, considering that within the next decade most people’s second most expensive purchase after a home – their car – is going to have to be electric.

Beyond people’s personal preferences for old-fashioned petrol or diesel vs electric, this deadline is already starting to affect future depreciation calculations and having a financial impact.

The gap has narrowed slightly between electric and petrol cars, but a Renault Zoe will set you back about £10,000 more than an equivalent Clio. The R135 Zoe Rapid Charge will still set you back £31,495 after the £3,000 government grant, for example

The gap has narrowed slightly between electric and petrol cars, but a Renault Zoe will set you back about £10,000 more than an equivalent Clio. The R135 Zoe Rapid Charge will still set you back £31,495 after the £3,000 government grant, for example

The range and charging issue is one we have covered heavily on This is Money, and I tackled it head-on in that review, headlined Renault Zoe 1, Range Anxiety 0.

There may have been a little bit of optimistic licence in that headline, but I coped just fine doing a 60-odd mile round-trip commute three days a week into London, along with plenty of local journeys on other days, in the Zoe.

And that was done with no home charging opportunity, whereas those buying a Zoe now with off-street parking can get a free wall box allowing them to fill the battery overnight whenever they wish.

I had to do a degree of extra planning and public charging is not cheap, so I would hesitate to recommend those without the ability to have a wall box get an electric car yet. But I got on just fine and spent considerably less on electricity than I would have on petrol.

There was even a cold, damp, dreary morning test when the Zoe in Eco mode trumped my range anxiety and managed to do a 31 mile journey using just 25 miles of range.

A home wall box, the continuing roll-out of fast chargers and a little patience, can overcome the first part of the criticism highlighted above.

The second part is not so easy though, because electric cars are expensive.

The top spec Renault Zoe R135 GT Line Rapid Charge that I tested is a £34,495 car.

That’s an awful lot of money for a family hatchback, even when you factor in the fact that the £3,000 government plug in car grant knocks the price you pay down to £31,495.

An equivalent petrol-powered Renault Clio, an S Edition 130 auto, would set you back £21,495.

Further down the ladder, things don’t look much better. A cheaper and lesser-powered Zoe R110 Iconic Rapid Charge after the government grant is £29,495, whereas the equivalent Clio will cost you £20,095.

There is no getting away from the sense that even ‘affordable’ electric cars aren’t that… affordable. The ‘how much?’ criticism in the reader comments of the Zoe review is justified.

Excellent car as it may be, the Zoe’s expensive.

By comparison an equivalent Renault Clio, an S Edition 130 auto, would cost £21,495

By comparison an equivalent Renault Clio, an S Edition 130 auto, would cost £21,495

Except, there is another way to stack things. Most people buying brand new cars don’t purchase them outright, the vast majority do it on personal contract purchase or PCP deals as they are known.

With these you don’t really own the car, you put down a deposit and then fund the depreciation over a period of time with set monthly payments, and at the end of that choose whether to buy it with a final payment, or hand it back.

On a monthly basis, the cost difference with some electric cars starts to seem more palatable.

Take the R135 GT Line Zoe mentioned above with a £2,000 deposit, on a 4.9 per cent 36 month PCP deal with 10,000 miles per year, on which alongside the electric car grant Renault will chuck in a dealer contribution of £3,000, meaning you pay £400 per month.

The equivalent Clio on the same terms (with the £500 dealer contribution on offer) would cost just £57 per month less at £343.

But with the Zoe and a home charger you will pay about £6 to fill the 238-mile range battery vs £48 to fill the Clio’s 42 litre tank.

In theory, that 11 gallon fuel tank with a quoted mpg of 49 is good for 539 miles (let me know if anyone’s done that in a Clio).

If we take both those WLTP consumption figures as true and work on current petrol and electric costs, a 10,000-mile year would cost £890 in the petrol Clio and £250 in the Zoe. The monthly fuel saving is £53.

Road tax in the Clio is £150 and zero on the Zoe, so the monthly saving on that is £12.50.

Add those two figures together and the Zoe becomes £65.50 per month cheaper to run, outweighing the £57 per month extra cost on the monthly PCP.

It should be noted that Renault’s generous dealer £3,000 contribution flatters the figures here, but it does change things around a bit compared to saying that’s a £30,000-ish car, whereas a Clio is a £20,000-ish one.

There is also the possibility that your employer may sign up to offer a salary sacrifice scheme, with these now zero benefit-in-kind tax rated for electric cars – and the income tax and NI saving there could be a real gamechanger.

That’s not to say that you should take out a PCP deal on a new car – personally, I always go second hand – buy an electrical car, get a Zoe, or do anything else. But it does shift the conversation a little.

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