The typical annual running cost for an electric vehicle is £369 less than a petrol car excluding initial price and public charging, according to new research from Compare the Market.
The research, which analyses the price of insurance, fuel, road taxes and MOT costs, shows that the average annual cost of running an EV in June 2025 was £1,351 compared with £1,720 for a petrol vehicle.
The costs do not include the higher prices of electric vehicles over their petrol equivalents or the dearer charging costs at public points as compared to private chargers.
Following the introduction of the Government’s new Electric Car Grant (ECG) scheme at the beginning of August, motorists can also now save £1,500 on certain new EVs. Insurance premiums for the Citroën ë-C3, ë–C4, ë-C5, and ë-Berlingo – four of the models included in the scheme – were £451 on average in June this year, according to Compare the Market, potentially taking overall running costs down to £1,142 for these models. As of the end of August, owners of EVs included in Band 1 of the scheme – which include the Ford E-Tourneo Courier and Ford Puma Gen-E – can benefit from an even larger discount of £3,750.
More broadly, the average car insurance premium for EVs has fallen by £176 year-on-year, decreasing to £660 in June 2025 from £836 in the same month last year.
The average running costs for EVs, however, have risen in the last year. This is partly because drivers now need to pay the same Vehicle Exercise Duty (road tax) as drivers of petrol vehicles, increasing overall running costs by £195. Higher energy costs have also made EVs more expensive to run year-on-year, with electricity to power an EV for 12 months costing £441 on average compared to £400 last year.
Despite this, EVs remain cheaper to run overall than petrol cars and continue to grow in popularity, accounting for 26.5% of new cars registered in August 2025, compared to 22.6% the same time last year, according to the Society of Motor Manufacturers and Traders.
The decline in EV car insurance premiums year-on-year means drivers who shop around online for car insurance when their renewal is due – rather than automatically renewing – could find a good deal.
Sam Wilson of Compare the Market, said, “EV drivers will be pleased to know that EVs remain more affordable to run than petrol cars on average. Alongside lower upfront costs, motorists driving certain EV models included in the Government’s new ECG scheme could also benefit from the lower insurance premiums typically associated with EVs, further reducing annual running costs. As average insurance premiums fall for EVs more broadly, comparing policies online ahead of renewal could be one of the easiest ways for motorists to make savings.”
