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The typical annual running cost for an electric vehicle (EV) is £369 less than a petrol car, according to new research from Compare the Market. The research, which analyses the price of insurance, fuel, road taxes and MOT costs, shows that the average annual cost of running an EV in June 2025 was £1,351 compared with £1,720 for a petrol vehicle.

Following the introduction of the Government's new Electric Car Grant (ECG) scheme at the beginning of August, motorists can also now save £1,500 on certain new EVs. Insurance premiums for the Citroën ë-C3, ë-C4, ë-C5, and ë-Berlingo - four of the models included in the scheme - were £451 on average in June this year, according to Compare the Market, potentially taking overall running costs down to £1,142 for these models.

As of the end of August, owners of EVs included in Band 1 of the scheme - which include the Ford E-Tourneo Courier and Ford Puma Gen-E - can benefit from an even larger discount of £3,750. More broadly, the average car insurance premium for EVs has fallen by £176 year-on-year, decreasing to £660 in June 2025 from £836 in the same month last year.

The average running costs for EVs, however, have risen in the last year. This is partly because drivers now need to pay the same Vehicle Excise Duty (road tax) as drivers of petrol vehicles, increasing overall running costs by £195. Higher energy costs have also made EVs more expensive to run year-on-year, with electricity to power an EV for 12 months costing £441 on average compared to £400 last year.

Despite this, EVs remain cheaper to run overall than petrol cars and continue to grow in popularity, accounting for 26.5% of new cars registered in August 2025, compared to 22.6% the same time last year, according to the Society of Motor Manufacturers and Traders. The decline in EV car insurance premiums year-on-year means drivers who shop around online for car insurance when their renewal is due - rather than automatically renewing - could find a good deal, the researchers said.

Sam Wilson, expert at Compare the Market, said: "EV drivers will be pleased to know that EVs remain more affordable to run than petrol cars on average. Alongside lower upfront costs, motorists driving certain EV models included in the Government's new ECG scheme could also benefit from the lower insurance premiums typically associated with EVs, further reducing annual running costs. As average insurance premiums fall for EVs more broadly, comparing policies online ahead of renewal could be one of the easiest ways for motorists to make savings."

EV and petrol car running costs for a year compared

AVERAGE ANNUAL COST OF RUNNING AN ELECTRIC VEHICLE

Year

2024

2025

Insurance

£836

£660

Fuel

£400

£441

Est. VED (Road Tax)

£0

£195

MOT

£55

Total cost per year

£1,291

£1,351

AVERAGE ANNUAL COST OF RUNNING A PETROL-FUELLED CAR

Year

2024

2025

Insurance

£816

£625

Fuel

£933

£845

Est. VED (Road Tax)

£190

£195

MOT

£55

Total cost per year

£1,994

£1,720

About the research

Insurance data was sourced from Compare the Market. It said 51% of Compare the Market customers aged between 45 and 54 were quoted less than the prices stated in this release for their car insurance for March 2024 and March 2023. These are for petrol and electric vehicle enquiries for comprehensive cover. Hybrid vehicles are included in the petrol-fuelled insurance figures.

Annual fuel costs were based on drivers travelling 6,000 miles per year (ONS NTS0901 - Petrol car mileage: all cars 2022). Petrol priced at £1.45 per litre in June 2024 and £1.31 June 2025 (Source: BEIS Monthly: Typical/average annual retail prices of petroleum products and a crude oil price index (tab 4.1.1 quarterly).

Fuel efficiency was 5.40 litres per 100km (Source: Department for Transport ENV0103). Electricity priced at £0.245 per kWh in June 2024 and £0.2703 per kWh in June 2025 (Source: Energy Price Guarantee 2024 and Ofgem 2025). Fuel efficiency is 16.9 kWh per 100km (Source: average efficiency for the ten most electric vehicle popular models on Compare the Market).

MOT cost for a car - £54.85 (source: https://www.gov.uk/getting-an-mot/mot-test-fees). Petrol car and EV cars registered on or after April 1, 2017. Rates for second tax payment onwards. Single 12-month payment - £195 - source GOV.uk.

EV 'costs rise' but petrol drivers given £369 warning