Are Electric Cars Cheaper to Run in 2025?

Electric Vehicles 

A little-known fact is that electric cars predate petrol and diesel vehicles. English inventor Thomas Parker built the first electric car at the end of the nineteenth century, in 1884, in Wolverhampton, and he was also responsible for electrifying the London Underground to reduce smoke and pollution in the capital.

However, fossil-fuelled vehicles took precedence over electric ones, as they were made more widely available and affordable. It wasn’t until the end of the twentieth century that the focus on developing more environmentally friendly vehicles sped up the development of electric vehicles capable of faster speeds and greater distances.

Electric vehicles have grown significantly in popularity since the turn of this century and with advancements in technology, political viewpoints and rising environmental concerns, the case for EVs is ever more relevant. But are electric cars cheaper to run than petrol or diesel cars in 2025? We’ll dive into the realities of the costs of running an electric car vs a petrol or diesel to help you decide on the best option for your lifestyle and budget.

Upfront cost

The first thing to compare is the initial cost of purchasing an electric car vs a diesel or petrol.

Purchase price comparison: diesel vs electric

The upfront cost of a fossil-fuelled vehicle is still lower than that of purchasing an electric one, but the price gap is narrowing in 2025. The upfront cost of an electric car vs a diesel or petrol version may be higher, but the long-term financial benefits tend to outweigh this, especially when considering the options available when leasing an EV.

Some of the factors that are narrowing the price gap in the initial purchase of an EV include:

• Innovations in battery technology – giving longer range to EVs
• Lower manufacturing – with mass production
• Government grants and incentives

Diesel cars, for example, now are facing rising taxes and surcharges – increasing their overall expense.

Running costs

The running costs of any vehicle you might own or lease, include fuelling the car, tax, maintenance and servicing, as well as clean air charging and potential repair bills. So, let’s examine these various costs to determine if electric cars are cheaper to run in 2025.

Fuel vs electricity costs

Since the cost of living crisis, the cost of fuelling an EV has grown closer to the cost of a petrol or diesel vehicle and the fast charging tariffs can mean a very similar cost to fuelling an electric car. However, installing a home charging point allows off-peak charging times, meaning fuelling your EV is still cheaper than filling up the tank.

With the pressure on the government to meet environmental targets, the cost of fuel, especially diesel, is only set to rise, and after 2035 petrol and diesel cars will be banned from production – making electric cars the vehicle of the future.

Maintenance and servicing costs

Without a complex engine, oil changes or exhaust systems in an electric car, the maintenance costs are much lower. Petrol and diesel cars need more frequent servicing and maintenance needs, which may be potentially cheaper than EVs, depending on circumstances, but as electric vehicles need less frequent services, they usually work out to be more reliable and cost-effective over time.

Road tax savings for EVs

Most EVs remain exempt from road tax in 2025, saving drivers hundreds of pounds every year, whereas diesel vehicles are subject to higher Vehicle Excise Duty, or road tax, under new emissions-based tax structures.

However, there are changes imminent with luxury, expensive vehicles (more than £40,000) coming under a road tax supplement from 2025 regardless of fuel type.

Government grants and incentives for electric vehicles

There is an array of grants and incentives for those seeking to get behind the wheel of an EV. There are subsidies available for the installation of home chargers and tax rebates for those selecting EV rentals for their business use, which all make the switch more appealing. The reduction or removal of road tax and emissions charges all help to make the yearly cost of an EV attractive.

Benefits of zero tailpipe emissions

One of the biggest benefits of an electric car vs petrol or diesel is the fact they produce zero tailpipe emissions, which significantly helps to reduce air pollution and combat climate change. In sharp contrast, diesel and petrol cars emit harmful pollutants and, as a result, are facing increasing regulatory restrictions and potential bans in city centres.

EVs are also exempt from having to pay ULEZ (Ultra Low Emissions Zone) and LEZ (Low Emissions Zone) charges, making them the obvious choice in cities with emission restrictions.

Total cost of ownership (TCO)

So, whether electric cars are cheaper to run in 2025 comes down to the total cost of ownership. There are a couple of main considerations:

Comparing long-term costs of electric vs diesel

Over time, ultimately, EVs are more budget-friendly in running costs thanks to their lower fuel, maintenance, servicing and taxation costs and these savings frequently outweigh the higher upfront cost of an EV.

Balancing financial and environmental priorities

Choosing an EV, or a hybrid car, whether for a business or personal lease or to purchase, offers the dual benefits of financial savings in running costs as well as environmental sustainability. For those looking to reduce their carbon footprint and help combat climate change, while managing a budget, EVs are the ideal solution.

Key takeaways for electric vs petrol vs or diesel vehicles

The key takeaways of looking into whether electric cars are cheaper to run in 2025 are that EVs are:

• More cost-effective to fuel
• Lower maintenance and servicing costs
• Tax advantages
• More eco-friendly

Why leasing an electric vehicle may be the better choice

Leasing an EV minimises upfront costs and any depreciation costs associated with the onward sale of your vehicle and allows you to enjoy the latest technology at an affordable, budget-friendly monthly rate.

Hybrid vehicles also enjoy many of the same cost-savings and tax benefits and are also worth consideration as a more eco-friendly option, with the government extending the production time further than fossil-fuelled vehicles – you can read more about it in our blog.

Lease an EV With Gateway2Lease

The experts at Gateway2Lease are on hand to offer support for anyone looking to benefit from some of the most cost-effective deals on EVs. Leasing a car, such as a Tesla, which can be extremely expensive to purchase upfront, is an achievable option with our tailored lease deals.

Get in touch with our team to find out how you can save in 2025 with an EV car lease.

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