can we afford an electric vehicle? let’s run the numbers!

Aug10
by TFS on August 10, 2018 at 5:16 pm
Posted In: Environment, Lifestyle Design, Personal Finance

It’s a LEAF! Geddit!?!

 

We’ve been thinking about getting a new car recently and upgrading from our creaky old ~£1000 beater of a Peugeot 307, and as we are getting a bit bored of owning said make and model, we decided to cast the net a bit wider to see what was about.

As well as this, I decided to knock up a spreadsheet to estimate TCO, or Total Cost of Ownership per year, to see how various different options would actually impact our bottom line, as opposed to just focusing on the sticker cost of the vehicle purchase. As I am interested in Electric Vehicles (EVs), and even though the cost of the vehicle purchase is much larger than any Internal Combustion Engine (ICE) powered car we are likely to consider, I thought I may as well stick that into the spreadsheet just to compare… The results have been… interesting 🙂

First of all let’s compare the base case which would be keeping the old beater, or The TFS Mobile MkII as she’s fondly known as, to a slightly newer, shinier, better ICE powered vehicle: The Nissan Qashqai. It’s one we both like the look of, and it seems like they’re on sale at a reasonable price for the condition of the vehicle you can buy at the moment. Here is my attempt at forecasting TCO for both cars (Explanation of each row is below):

  1. Upfront cost for our current car is obviously zero because if we keep it we have no money to shell out (barring any immediate breakdown/servicing but think it should be OK for another 6 months)
  2. I am assuming we would get around £800 for our old car, which is possibly a little optimistic but let’s go with it for now!
  3. For both the ICE vehicles this is just Petrol + Tax + any maintenance costs. The £130/month is roughly what we’ve spent on our car for the last two years so I just went with that 1. For EVs this will be the cost of electricity + maintenance (There is currently zero tax on EVs). Also, the “Lease” part comes into play when I look at leasing an EV in a minute.
  4. Depreciation is per month and is a figure I worked out roughly using this handy website here.
  5. For our current car I’ve estimated £800 here, could be a little high as mentioned. For all other cars I’ve used the estimate from the website I just linked to above. In the Qashqai’s example, they reckon that if you buy at £3500 it is immediately only worth £3185, and then depreciates further per year from there… damn stupid depreciating cars!
  6. This is simply row 3 multiplied by 12 to give us a yearly cost of running the car.
  7. This is row 6 + row 2. When we get to year 2 and 3, the figure from row 6 is multiplied by the number of years owned, to give total cost of ownership.
  8. Value of the car after each year has passed, as per rough calcs using the depreciation calculator website as mentioned above.
  9. Is simply 7 minus 8 – in other words we are assuming if you sold the car at this point, how much are you out of pocket in total at that exact point in time. Same goes for years two and three
  10. This is row 9 divided by the number of years we’ve owned the car for.

A few points worth making at this stage:

  • The green highlighted row – “TCO Year 3” – is the one that is really important here because 1) I think it makes sense to view owning any car for at least a 3 year period and 2) that is the actual cost of owning/running it because you would assume you will sell the vehicle at the end of the period. At “only” £675 more, over 3 years, for a car that is initially worth nearly £3000 more on paper, this actually doesn’t seem all that bad. I was always against buying any car worth over around £1500 but looking at these figures I see there is less difference in TCO than I had originally imagined.
  • As you can see, as the years go on, the average cost/year of ownership goes up, which makes sense because of depreciation starting to take it’s toll. It really ramps up quickly on our current car simply because the worth of the car as a percentage of the yearly running costs is quite high at first but very quickly dips towards zero.
  • I initially calculated the TCO as just Fuel + Maintenance + Depreciation costs, which for example would just give a simple figure of £1800/year for our current car. But I decided that although that sounds correct logically, it wasn’t right because it didn’t take into account that you actually have an asset at the end of each yearly period that you could in theory sell to recoup some of your costs back (and as already stated I assume that we will do that for the purposes of these comparisons). This doesn’t make much of a difference to keeping the dusty ole Pug but it does make a big difference when purchasing a more expensive car as we shall see in good time…

 

leasing an electric vehicle

Here’s a quick one that I did just out of interest and dismissed immediately because, well, it just seemed too expensive. This was based on the cheapest leased EV I could find which was £200/month. Admittedly you are getting a brand spanking new car for that, but the TCO is way too much at £3307/year. The car in question was a Kia Soul I found on here, if anyone was interested. I guess it’s expensive because: A) you are getting a new car and therefore they bake depreciation costs into the payment and B) There are financing costs and generally financing should be avoided at all costs. I know we all know that already but I thought I’d still compare it just in case I was pleasantly surprised. Here is the updated table with the leasing option anyway:

 

buying a used electric vehicle

To clarify, I’m talking about a Nissan Leaf (see photo above, final model shape and colour may vary 🙂 ) because that seems to be the best EV out there in terms or range/price from what I can see. I’ve included 3 price points for the Leaf in the table:

  • Upper Range – This should buy a 2014/15 30kWh 2 Leaf which gives you around 120 miles of real world range, apparently. Range has a double meaning here because it’s the upper range we’d go for in terms of price, and also the upper range of the actual miles the car can go on one charge, how clever is that!?
  • Mid Range – Might just squeeze a 30kWh model with this price but it would probably quite high mileage. More likely to get a decent shape 24kWh model, which only has around 90 miles or real world range.
  • Low Range – Would get you a cheap 24kWh version of the Leaf, one of the older models around.
  • I’ve also included one final option which is for a Renault Zoe, with a leased battery, which you can pick up for around £12K. They have around a 200 mile range which is great, but then you have to pay a monthly fee for the battery which is not so great. Also I don’t like the Renault Zoe. To clarify, if I was still single and aged 22 it looks like an awesome little hot-hatch, but doesn’t look so great as a family car with the tiny back seats and weird/no back doors.

Anyway before moving on let’s have a look at the cost table

Wow!

Did any of those figures suprise you? We could get a lower range Nissan Leaf, made in 2013, which is a good 5 years newer than the Nissan Qashqai’s we’re looking at (2008/09 for that price range), for around the same TCO per year.

Honestly I don’t think I’d consider the 24kWh version because under 100 miles of range is just not enough for a 1 car family. It may be good as a second car town run around, but we are always driving to random places like the Isle of Wight which is about 80 miles away from where we live… way too close for comfort for my liking!

But even looking at the Mid or even Upper range it’s not that much more expensive compared to the Qashqai option. It definitely puts a Leaf on the table as a serious option for us, and even a frugal(ish) one at that.

Much more frugal than a £12K or £15K sticker price would initially have you think.

After 3 years the Qashqai would cost us an estimated £5275 and the top end Leaf would be £7290. £2015 over 3 years for a much newer car, all the mod cons that go with that, and feeling smug about not creating any green house gases while driving… is it worth it… I think it’s borderline for me still but it’s a lot closer than I would have ever imagined! Watch this space!

I haven’t really got much else to say on the above as hopefully the figures speak for themselves, but my final question to any EV owners out there is…

Are my figures anywhere near realistic?!

I fear I have favoured the EV options because of my internal bias towards… well basically wanting to get one 🙂

I’ve figured £20/month for electricity (we drive about 6000 miles/year) and £20/month for maintenance.

Depreciation figures are from the same website that I used for both the ICE car options.

I hear that the only real thing that is needed is tyres… not sure how true that is but certainly no oil changes, gear box issues, and so on. And with a much newer car in general I would like to think that most of the suspension parts, electrical components, and all the other smaller things like that will not need replacing or servicing for many years yet. But let me know if I’m smoking something green that I shouldn’t be, please! 🙂

 

Cheers!

Notes:

  1. This could well be a low ball figure for actually upkeeping the Qashqai or for future expenses on our current car if things really start to go wrong with it, but for the purposes of a quick comparison I think it’s in the right ball park at least ↩
  2. This refers to the battery capacity ↩
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