Almost any time the subject of switching to an electric vehicle arises, we hear a familiar refrain. "I love the idea, but the cars themselves are so expensive. I just can't afford that right now."
It's a perspective that we can sympathise with at Car Charge Go. We're all EV drivers ourselves and remember the outlay only too well. The price range of electric cars can vary wildly, from around £17,000 to almost £140,000. That's undeniably more than you would be expected to pay for a traditional, fuel-powered vehicle.
Equally, it's understandable why many people would be reluctant to spend big on their car unless truly indulging in luxury. After all, a vehicle is typically the definition of a depreciating asset, reducing in value with every mile driven and year of age. What if we proposed that purchasing an electric vehicle is actually an investment, though?
Fuel scarcity may inspire price increases
This blog was created in late September 2021, while panic buying of petrol and diesel has gripped the UK. Check any social media feed and you'll be flooded with images of long queues outside stations, alongside increasingly desperate pleas for information on sites that have not yet sold out of fuel.
Now, you'll have your own views on whether this is a media-induced short-term panic or a genuine worry about the future of fuel. One thing is sure, though. This scarcity, and reaction to it, will have been noticed by the industry's big guns. With suppliers never shy to exploit a financial opportunity, fuel prices have soared.
Nobody can predict with 100% accuracy what will happen in the future. All the same, fuel will likely drop in price once this alarm subsides – before spiking again, and again, and again. In the age of social media and 24/7 news cycles, we're only ever moments away from the next great crisis. Expect such panicked stocking up, and associated price rises to reoccur in future.
Each time they do, the baseline cost of fuel will likely creep up a little too. After a panic, many drivers will be so relieved that prices have dropped that they ignore that the cost remains higher than before the drama. Over time, this will bolster the profit margins of suppliers – and hit drivers in the pocket.
This is all without considering the government's existing dedication to environmental issues, too. With plans afoot to cease production of non-electrical vehicles by 2030, alongside ongoing concerns about the price and availability of oil from overseas, it's increasingly possible that state intervention will occur. If petrol and diesel become rare resources, they will be deemed a precious import – and priced accordingly.
Electric car prices and valuations are soaring
As we discussed previously, it will cost quite a pretty penny to invest in a new electric car. The same, however, can be said about a classic, fuel-powered vehicle. Despite pushes to get more people driving EVs, the average expense attached to cars of all shapes, sizes and forms is steadily rising.
This was first noted in the US, where a shortage of crucial parts was blamed for the rising prices. As always, supply and demand will rule all. When we consider Brexit's impact on the British automobile industry, however, we all need to start preparing ourselves for a similar situation.
Of course, as we have discussed, the government is also pushing to prevent the sale and construction of new fuel-powered vehicles from 2030 onward. Many grants are also available to early adopters of electrical driving, designed to ease the financial burden of making this switch.
How do you feel that automobile manufacturers will react to this? By demonstrating generosity and reducing prices of their latest and greatest models, knowing they will be considered outdated within less than a decade? Or by making hay while the sun shines, attempting to glean as much profit as possible from a business model that has a limited shelf life?
We also mentioned the rising cost of fuel and the panic this inspired. As you can no doubt imagine, this has led to a substantial increase in interest in EVs, ensuring that the value of even used cars is higher than ever. Early adopters may find themselves in a position to trade an electric vehicle for a substantially higher sum than they may have expected during the next fuel crisis. This alone is surely enough to position EVs as an investment.
Maintenance costs on EVs are much lower
Finally, it's worth considering the total cost of a vehicle throughout its lifespan. Now, we have made no bones about the fact that EVs are expensive to purchase. Many drivers keep their cars for longer than ever, though, opting to repair and replace parts rather than upgrade entirely.
That's an admirable approach and theoretically a cost-saving measure. Is it, though? Rifle through your financial records and check how much money you have handed to your local garage over the last few years. Minor repairs here and there, MOTs and services, major faults … they can quickly start to add up to substantial expenses.
The initial cost of an EV can be tempered by the low maintenance running fees of these cars. No combustion engine means far less capacity for things to go wrong. It's estimated that an electric vehicle costs as little as 50% as much as a standard car to maintain roadworthy status. Once again, we're looking at such a drive as an investment.
Perhaps above all, none of us can put a price on the environment. Driving 90 miles – that's from London to the coast of Norfolk – releases enough CO2 to melt a foot of ice in the Arctic. At the current rate of emissions, experts believe this will leave the territory devoid of ice throughout the summer by 2035.
Eventually, as we know, driving an EV will become a legal mandate. Some drivers may be happy to wait until the decision is taken out of their hands, which we understand entirely. All the same, we hope that some of the reasoning outlined above will convince at least some readers that this is an excellent opportunity to make the change to electricity.
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