Price Parity 2024: The Final Mile

EXCERPT

Many analysts have forecast that upfront price parity - where a buyer pays no more for an EV than a petrol car - will be reached by 2026. To assess UK progress towards price parity in the first year of the Zero Emissions Vehicle (ZEV) mandate, we reviewed the costs of a representative sample of 7 new EVs and their petrol counterparts, accessed in three ways - purchasing outright, leasing and personal contract purchase (PCP), making 20 scenarios in all.

We found:

• EV upfront costs were 12% more than petrol equivalents, not the 50% often cited.

• Upfront price parity, or payback in less than 1 year, for the electric vehicle choice in 6 out of 20 (30%) scenarios.

• In a further 5 out of 20 scenarios (25%), payback in 2 1⁄2 years or less.

• Motorists with average mileage could save up to £7000 over the next 4 years by choosing an EV over a petrol equivalent, and a minimum of £3,000 over 4 years, whether they lease or buy by PCP or outright; more if they drive higher mileage.

To support continued price parity, we recommend: continuing with the ZEV mandate, which is chiefly responsible for delivering upfront price parity; explaining the cost savings better, and busting myths; cutting the tax on public charging; and focusing any additional financial support on home chargers.

Home chargers cost the same whether you are charging a Dacia or a Mercedes, and benefit new and second hand vehicle buyers alike. They are therefore a much more effective incentive for low-middle earners than VAT cuts on new EVs.