In 5 European countries electric vehicles now cheaper to operate than fossil fuel powered vehicles

New research shows that electric vehicles are now cheaper to run than gas or diesel vehicles in five different European countries.

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International Council for Clean Transportation study(ICCT)

The ICCT research examined the purchase, fuel and tax costs of Europe's best selling vehicle the Volkswagen Golf in its battery electric, hybrid, gas and diesel versions. Over four years, the purely electric Golf was the cheapest in five countries: Germany, UK, Netherlands, Norway and France. This was due to a combination of lower taxes, fuel costs and subsidies on the purchase price in the five countries. The ICCT research showed that tax breaks are a key way to encourage the purchase of electric vehicles which will help alleviate the effects of climate change and lessen air pollution.

Carbon emissions from vehicles are a large contributor to global warming and the emissions have been rising in the EU during recent years. Vehicles are also a source of air pollution that is said to have caused 500,000 early deaths a year in the EU.

Norway offered the largest savings for EVs over diesel 27 percent as the EVs are not subject to a heavy registration tax. The UK has recently cuts the amount of grants for EV purchases and has the smallest saving overall just 5 percent. In the other three countries saving varied from 11 to 15 percent

Sandra Wappelhorst, from the ICCT, said financial incentives for electric cars would not be needed when purchase prices fall to that of fossil-fuel powered cars. This is not likely to happen until between 2025 and 2030. With the prices of batteries continually dropping this will eventually reduce the price of EVs as well. Owners of EVs need to be confident that there are sufficient charging points to charge batteries on longer trips.

Hybrid vehicles were often the most expensive to run over the four years. This was due in part because the vehicles must have two engines.

James Tate study

Another study by James Tate of the University of Leeds looked at the costs of car ownership in the UK, US, and Japan. That study also found that electric cars were cheapest mainly due to the lower costs of electricity to gas or diesel fuel. Tate said that the UK government could do more to encourage the purchase of more EVs: “My view is that the UK should do much more to steer the market away from the most polluting and inefficient cars, ie SUVs/4x4 which are continuing to grow in sales. These large, heavy vehicles burden us and the climate with unnecessary CO2 and air pollutants. A taxation policy that rises with fuel consumption rates, such as in the Netherlands and Norway is overdue.” Tate said auto manufacturers are not keeping up with the demand for EVs.

Recommendations of the ICCT report

The ICC included a series of recommendations for government policy:Create significant tax advantages for low-emission vehicles at the point of purchase. Tax payments or tax advantages at the point of purchase have a stronger influence on consumer choice than annual tax payments.

Ensure continued tax benefits for low-emission vehicles during their use. Lower taxes and lower total costs for consuming electricity compared with higher taxes and total price at the pump for gasoline and diesel fuel can serve as an incentive for consumers to opt for a car with an electric drive train.

Account for the emissions of a vehicle as part of the company-car tax system. Company cars play an important role in Europe as they make up the highest proportion of new-car registrations in markets such as France, Germany, and the United Kingdom.

Balance and regularly re-adjust the tax system to be self-sustaining. To ensure a self-sustaining tax system, vehicle-related taxes need to take into consideration all vehicles, ensure that high-emission vehicles generate the tax revenue to provide tax breaks for low-emission vehicles, and be adapted annually or every two years to account for changes in market structure.

Previously published in Digital Journal