The short answer
There is no universal winner. Which powertrain costs least depends on how far you drive, whether you can charge at home, and what you pay for insurance and finance. This article gives you a method to work out the answer for your own situation.
What this is, in plain English
Running a car costs more than the pump price. The true annual cost of ownership includes fuel or electricity, road tax (Vehicle Excise Duty, or VED), insurance, servicing and the value the car loses each year (depreciation). Once you add those together, the picture can look very different from the headline fuel saving you see in an advert.
This explainer walks through each cost head in turn, gives you current figures with their sources, and shows a worked comparison for 10,000 miles a year.
How each cost works
Fuel or electricity
Petrol averaged 136.5p per litre in December 2025 according to the Department for Energy Security and Net Zero (DESNZ). That price includes fuel duty of 52.95p per litre plus VAT on top. Check the DESNZ quarterly prices page at GOV.UK before you run your own calculation, as the pump price moves month to month.
Electricity for home charging sits at around 26.3p per kilowatt-hour (kWh) under the Ofgem price cap from October 2026, which includes the effect of a temporary six-month VAT removal. A kWh is simply the unit of electrical energy, the same measure you see on your electricity bill.
Smart overnight tariffs such as Octopus Go can bring that cost down to roughly 7p per kWh. At that rate, 10,000 miles of EV driving costs around £183. On the standard daytime tariff it rises to around £700. On motorway rapid chargers at 70 to 80p per kWh, the cost climbs to roughly £1,875 for the same distance, which is comparable to or more than a petrol car.
A petrol car covering 10,000 miles at 46 mpg costs around £1,338 in fuel at December 2025 prices. A self-charging hybrid realistically returns 55 to 70 mpg in mixed driving, which cuts that figure noticeably. A plug-in hybrid (PHEV) only achieves its headline economy if you genuinely charge it every day. With a flat battery it often returns worse economy than a regular hybrid, because it carries the extra weight of a larger battery pack.
Real-world EV range is typically 20 to 30 percent below the official WLTP figure, and cold weather can cut it by up to 40 percent. The WLTP test is run in a laboratory at 23 degrees Celsius with the climate control switched off, which bears little relation to a January commute in the UK. Bear that in mind when calculating running costs.
Road tax (VED)
The EV road-tax exemption ended on 1 April 2025. All electric cars now pay VED. From April 2026, the standard annual VED rate is £200 for all cars registered after April 2017, regardless of fuel type. New EVs registered from 1 April 2025 pay a discounted first-year rate of £10, then move to the £200 standard rate from year two. Hybrids lost their previous alternative fuel vehicle discount from April 2025 and now pay the same rate as petrol cars.
Always verify the current rate at the GOV.UK vehicle tax rate tables, as rates are adjusted each April.
If your car had a list price above £40,000 when new (or £50,000 for electric cars from April 2026), an Expensive Car Supplement of £440 per year applies on top of the standard rate for five years from the second year of registration. Many new EVs clear those thresholds, so check before you buy.
Insurance
EV insurance typically costs 10 to 25 percent more than the equivalent petrol car. The reasons include higher purchase prices, specialist parts and the complexity of assessing battery damage after a bump. The difference can be several hundred pounds a year depending on your age and no-claims record. Always get a specific quote for the EV or hybrid you are considering rather than assuming it will be similar to your current car.
Servicing
An electric car has far fewer moving parts than a petrol car. There is no engine oil to change, no timing belt and no clutch. Typical EV service costs run to around £150 to £250 per year. Petrol cars typically cost £300 or more annually to service. Over a three-year period, servicing an EV is typically £500 to £1,000 less expensive than a comparable petrol car. These are typical ranges, not fixed quotes. Check the manufacturer’s scheduled maintenance guide for the specific model you are considering.
Depreciation
Depreciation is the value your car loses over time. It is often the biggest single cost most drivers never notice on a spreadsheet. According to Cox Automotive data, EVs depreciate at roughly 38 to 42 percent over three years, compared with 35 to 40 percent for petrol cars. The gap has narrowed as EV used prices have stabilised following a sharp correction between 2022 and 2024. Used EV prices were still falling around 10 percent year on year in early 2026, partly because large volumes of ex-fleet and salary-sacrifice cars are returning to the market. Hybrid cars have generally depreciated more predictably and often hold value well.
Does this affect you?
If you can charge at home overnight on a cheap tariff, an EV is likely to cost you noticeably less to run than a petrol car on fuel and servicing combined. If you rely mainly on public rapid chargers, that advantage largely disappears. For practical guidance on setting up home charging, see our article on charging an electric car at home: the practical first steps.
If you cover fewer than 6,000 miles a year, the higher purchase price and insurance cost of an EV may never be recovered through fuel savings. If you cover 15,000 miles or more, the fuel saving on home charging becomes substantial.
A PHEV makes most sense if your daily commute falls within electric-only range and you charge it every day without fail. If neither of those conditions applies consistently, a self-charging hybrid or an efficient petrol car may be cheaper in practice.
What it costs: a worked comparison for 10,000 miles
All figures use December 2025 petrol prices, October 2026 Ofgem electricity rates and April 2026 VED rates.
| Cost head | Petrol | EV, home charging (7p/kWh overnight) | EV, rapid public charging |
|---|---|---|---|
| Fuel or charge per 10,000 miles | approx. £1,338 | approx. £183 | approx. £1,875 |
| VED | £200 | £200 (£10 yr 1 if new) | £200 |
| Servicing (typical range) | £300+ | £150 to £250 | £150 to £250 |
| Insurance uplift | baseline | +10 to 25% | +10 to 25% |
| 3-year depreciation | 35 to 40% | 38 to 42% | 38 to 42% |
Depreciation and insurance vary too much by model, age and driver profile to give a single annual figure. Run the numbers for your specific car and insurer.
Common myths and misunderstandings
“EVs are always cheaper to run.” Not if you rely on rapid public chargers. The per-mile cost can match or exceed petrol. The home-charging advantage is real and significant, but it is not universal.
“EVs are exempt from road tax.” They were. That ended on 1 April 2025. All EVs now pay VED at the standard £200 rate, with only a £10 discounted first year for new registrations.
“Hybrids are taxed less.” Also no longer true. Hybrids lost their alternative fuel vehicle discount from April 2025 and now pay the same VED as petrol cars.
“The WLTP range figure is what you will get.” Expect 70 to 80 percent of it in typical UK conditions, and less in winter.
What is still changing
From 1 April 2028, a new mileage-based charge called eVED will apply to fully electric cars, plug-in hybrids and hydrogen fuel cell vehicles. This was confirmed by a government consultation response published on 13 July 2026. The rate will be 3p per mile for full EVs and 1.5p per mile for PHEVs. Drivers will declare their mileage when renewing VED with DVLA. No GPS tracking is involved. An average EV driver covering 8,500 miles a year would pay around £255 per year in eVED on top of the standard £200 VED, totalling roughly £455. This changes the EV running cost calculation from 2028 onwards, so factor it in if you are buying now.
EV residual values remain more sensitive to technology change and policy shifts than petrol equivalents. Treat three-year depreciation estimates for electric cars with more caution than you would for petrol.
What to do next
- Work out your annual mileage. Your MOT certificate shows recorded mileage year on year, which gives you a reliable average.
- Establish whether you can charge at home. If you cannot, the EV fuel cost advantage is much smaller. Our guide on charging an electric car at home: the practical first steps explains what is involved.
- Get an insurance quote for the specific EV or hybrid you are considering before you commit.
- Check VED for the specific car at the GOV.UK vehicle tax rate tables, including whether the Expensive Car Supplement applies.
- Ask for the manufacturer’s servicing schedule, not a general estimate. Some EVs have fixed-price service plans worth considering.
- For depreciation, use a current trade guide rather than a new-car list price. The used market sets the real residual value.
The arithmetic is straightforward once you have your own numbers. Do it before you sign anything.
