Electric Cars vs Petrol Cars 2026: Which Is Cheaper to Run?
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Electric cars vs petrol cars comes down to where you charge, how you pay for the car and how much tax you face. In 2026, electric cars are cheaper to run for drivers who charge at home, with HMRC's advisory rates putting home charging at 7p a mile against 14p to 17p for petrol. Public charging costs far more, and rapid charging can cost more per mile than petrol, which is why home and workplace charging decide the outcome.
Battery electric cars made up 23.4% of new UK registrations in 2025, according to SMMT figures, and the Benefit in Kind rate for zero-emission cars is 4% in 2026/27. This guide compares running costs, tax and charging side by side, then shows what popular electric cars cost through The Electric Car Scheme.
Electric Cars vs Petrol Cars: Cost Comparison At A Glance
The table compares the main cost factors for a typical driver covering 10,000 miles a year, using the sources linked in each section below.
| Electric Cars vs Petrol Cars at a Glance | Electric Cars | Petrol Cars | Difference |
|---|---|---|---|
| Cost per mile (home charging) | 7p | 14p to 17p | 50% to 59% less |
| Fuel or energy, 10,000 miles | £700 | £1,400 to £1,700 | £700 to £1,000 less |
| Servicing over five years | £4,022 | £5,709 | About 30% less |
| Benefit in Kind rate, 2026/27 | 4% | Up to 37% | Up to 33 percentage points lower |
| Road tax (VED), second year onwards | £200 | £200 | No difference |
| Insurance | About 10% to 15% more | Baseline | Electric cars cost more |
| London Congestion Charge, per day | £13.50 with Auto Pay | £18 | £4.50 less |
How Much Do Electric Cars And Petrol Cars Cost To Run?
The clearest independent benchmark for electric car running costs is HMRC's advisory rates from 1 September 2026. They set the rate for fully electric company cars at 7p a mile for home charging and 15p a mile for public charging, against 14p to 17p a mile for petrol cars up to 2.0 litres. These are advisory reimbursement rates rather than what every driver pays, so treat the annual figures as estimates.
| Cost per Mile and per 10,000 Miles | Cost per Mile | Cost for 10,000 Miles |
|---|---|---|
| Electric, home charging | 7p | £700 |
| Electric, public charging (HMRC rate) | 15p | £1,500 |
| Electric, rapid charging (79p per kWh) | About 23p | About £2,300 |
| Petrol, up to 1,400cc | 14p | £1,400 |
| Petrol, 1,401cc to 2,000cc | 17p | £1,700 |
The petrol figure holds up at the pumps. At 174.3p per litre, the UK average for the week ending 11 October 2026, a petrol car returning 45mpg costs about 17.6p a mile in fuel.
The gap reflects efficiency. Electric motors convert more than 90% of the electricity they consume into useful work, while even the best petrol engine converts only around 40% of the energy in the fuel. Regenerative braking recovers further energy in stop-start traffic, which is why electric cars suit town driving.
How Much Does Public Charging Cost?
Public charging costs more than charging at home, and the price depends on charger speed. Zapmap's Price Index for September 2026 puts the weighted average at 54p per kWh for slow and fast chargers and 79p per kWh for rapid and ultra-rapid chargers of 50kW and above. Assuming 3.5 miles per kWh, that's about 15p a mile on a slow or fast charger, in line with HMRC's 15p public rate, and about 23p a mile on a rapid charger, which is more than petrol.
The network is large, with 121,171 public EV chargers on July 1st 2026, but most drivers keep costs down by charging at home. Drivers who rely on public chargers can pay through The Charge Scheme from pre-tax salary and save 20% to 50% on charging costs.
Are Electric Cars More Economical in the Long Run?
When comparing electric vs petrol cars, the long-term financial benefits of choosing an EV become clearer. While the initial purchase price of an electric car may be higher, the total cost of ownership over time often makes electric cars significantly cheaper to run than their petrol counterparts.
Let's break down the long-term savings when choosing electric over petrol:
Are Electric Cars More Economical In The Long Run?
Yes. The Car Expert and Clear Vehicle Data analysed more than 600 UK models and found EV owners spend an average of £4,022 on servicing over five years, against £5,709 for combustion and hybrid cars, a saving of £1,687. Electric cars were cheaper to service in 95% of like-for-like comparisons.
Are Electric Cars More Expensive To Insure?
Usually, yes. Zego puts electric car insurance at roughly 10% to 15% above an equivalent petrol model, down from about 25% at the 2024 peak, although the figure is approximate. Insurance is included in a salary sacrifice package from The Electric Car Scheme, so employees don't arrange cover separately.
How Long Do Electric Car Batteries Last?
Battery wear is lower than many drivers expect. Geotab's January 2026 analysis of more than 22,700 EVs found batteries degrade by an average of 2.3% a year. Vehicles that rely on DC fast charging above 100kW degraded by up to 3.0% a year, against about 1.5% for vehicles mainly using AC or lower-power charging.
How Quickly Do Electric Cars Lose Value?
It varies by model. An Insureworks analysis of 2023 to 2025 models, using Auto Trader prices from 21 May 2026, found the Tesla Model 3 and Model Y retained an average of 64.9% of their original RRP, while the BMW i4, Hyundai Kona Electric and Ioniq 5, and Kia EV6 and Niro each retained more than 55%. Used electric car prices have recovered, rising 3.3% year on year like for like in July 2026 (Autotrader), so past trends may not hold.
Electric Car Tax: Benefit In Kind, Road Tax And Congestion Charges
Tax is where the gap between electric and petrol cars is widest, and three charges matter.
What Is The Benefit In Kind Rate For Electric Cars?
The Benefit in Kind rate for zero-emission cars is 4% in 2026/27, rising to 5% in 2027/28, 7% in 2028/29 and 9% in 2029/30. Petrol and diesel cars face up to 37% in 2026/27, rising to 38% in 2028/29 and 39% in 2029/30.
On an illustrative £50,000 car, a 40% taxpayer pays about £800 a year on an electric car (4% of £50,000 is £2,000 taxable), against up to £7,400 a year at 37%. HMRC's guidance explains how the charge is calculated.
| Benefit in Kind Rates by Tax Year | Zero-Emission Cars | Petrol and Diesel (Maximum) |
|---|---|---|
| 2026/27 | 4% | 37% |
| 2027/28 | 5% | 37% |
| 2028/29 | 7% | 38% |
| 2029/30 | 9% | 39% |
Do Electric Cars Pay Road Tax?
Yes. Electric cars pay £10 in the first year and the £200 standard rate from the second payment, the same as petrol and diesel cars. Electric cars with a list price over £50,000 also pay a £440 expensive car supplement. From 1 April 2028, drivers of battery-electric cars will also pay 3p per mile in electric vehicle excise duty, which is £300 a year at 10,000 miles.
Do Electric Cars Pay The London Congestion Charge?
Yes, but at a discount. The 100% Cleaner Vehicle Discount ended on 25 December 2025, so the Congestion Charge for electric cars is now £13.50 a day with TfL Auto Pay, or £18 without it. Fully electric cars remain exempt from the £12.50 daily ULEZ charge.
What Do Popular Electric Cars Cost To Salary Sacrifice?
Salary sacrifice moves the comparison from list price to monthly cost. Through electric car salary sacrifice, The Electric Car Scheme packages the car, insurance, servicing and maintenance, breakdown cover and road tax (VED) into one monthly payment taken from pre-tax salary, and employees typically save 20 to 50% compared with a personal lease.
The table shows net monthly costs for eight popular models on a £62,000 salary, 10,000 miles a year and a 3-year term with a flat payment profile.
| Salary Sacrifice Net Monthly Cost on Popular Electric Cars | Trim | Net Monthly Cost |
|---|---|---|
| Renault 5 E-Tech | Techno + Comfort Range 52kWh | £338 |
| MG4 | Premium Long Range 64kWh | £379 |
| Nissan Ariya | Advance 63kWh | £452 |
| Tesla Model 3 | RWD | £461 |
| Volkswagen ID.3 | Essential Pure 52kWh | £483 |
| Hyundai Ioniq 5 | N Line 84kWh | £505 |
| Tesla Model Y | RWD | £620 |
| Kia EV9 | Air 99.8kWh | £735 |
The Renault 5 E-Tech is the lowest at £338 a month net, followed by the MG4 at £379, while the seven-seat Kia EV9 is the highest at £735. Net cost varies by trim, salary and mileage, so a personalised quote shows your own figure.
What Hidden Costs Should You Consider When Switching To Electric?
Two costs sit outside the headline comparison. A home charger is an upfront cost that unlocks the 7p-a-mile rate, and it can be added to a salary sacrifice package as an optional extra. An EV tariff with cheaper overnight rates can reduce home charging costs further, so review your tariff when you order.
Should You Choose Electric or Petrol?
The right choice depends on how you drive and where you can charge.
Choose Electric if:
You can charge at home or at work, which gives you the 7p-a-mile rate.
Your employer offers an electric car salary sacrifice scheme.
Choose Petrol if:
You regularly drive very long distances without time to stop and charge.
You have no access to home, workplace or reliable public charging.
A plug-in hybrid sits between the two, but it carries a higher Benefit in Kind rate than a fully electric car. Drivers who want a lower monthly cost can also consider a used electric car through the same scheme.
Frequently Asked Questions: Electric vs Petrol Cars
Which Is Cheaper To Run, Electric Or Petrol Cars?
Electric cars are cheaper to run if you charge at home. HMRC's advisory rates put home charging at 7p a mile against 14p to 17p for petrol, which is about £700 against £1,400 to £1,700 over 10,000 miles. Public charging at 15p a mile on HMRC's rate costs about the same as petrol, rapid charging costs more, and EV servicing costs less over five years.
Are Electric Cars More Expensive Than Petrol Cars To Buy?
Electric cars often have a higher list price than equivalent petrol models, but the monthly cost depends on how you pay. Through salary sacrifice, net monthly costs on a £62,000 salary start from £338 for the Renault 5 E-Tech and £379 for the MG4.
What Is The Benefit-in-Kind tax Rate For Electric Cars in 2026?
The Benefit in Kind rate for zero-emission cars is 4% in 2026/27. It rises to 5% in 2027/28, 7% in 2028/29 and 9% in 2029/30, while petrol and diesel cars face up to 37% in 2026/27. On an illustrative £50,000 electric car, a 40% taxpayer pays about £800 a year.
How Much Does It Cost To Charge An Electric Car?
Charging at home costs about 7p a mile and public charging about 15p a mile, based on HMRC's advisory rates from 1 September 2026, although rapid chargers at 79p per kWh cost about 23p a mile. That's about £700 at home and £1,500 in public over 10,000 miles. The Charge Scheme lets employees pay for charging from pre-tax salary and save 20% to 50%.
How Does Electric Car Salary Sacrifice Work?
Your employer leases the car, and the monthly cost comes out of your gross salary before income tax and National Insurance. That's why employees typically save 20 to 50% compared with a personal lease. The package includes insurance, servicing and maintenance, breakdown cover and road tax (VED).
Final Verdict: Electric vs Petrol in 2026
Electric cars are cheaper to run than petrol cars in 2026 for drivers who charge at home, at 7p a mile against 14p to 17p on HMRC's advisory rates. Servicing costs less and the Benefit in Kind rate is 4% in 2026/27 against up to 37%, while insurance is the main cost that runs the other way.
Salary sacrifice brings those savings into one monthly payment, with net costs on a £62,000 salary starting from £338 for the Renault 5 E-Tech. Net cost depends on your salary, mileage and trim, so the clearest way to compare electric with the petrol car you drive today is to get a personalised quote from The Electric Car Scheme.
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Last updated: 20/10/2026
Information and prices provided are accurate at the time of release and may be subject to change. Our pricing is based on data collected from The Electric Car Scheme quote tool. All final pricing is inclusive of VAT. All prices above are based on the following lease terms; Using a flat payment profile, 10,000 miles pa, 36 months, and are inclusive of Maintenance and Breakdown Cover. The Electric Car Scheme’s terms and conditions apply. All deals are subject to credit approval and availability. All deals are subject to excess mileage and damage charges. Prices are calculated based on the following tax saving assumptions; England & Wales, 40% tax rate. The Electric Car Scheme Limited provides services for the administration of your salary sacrifice employee benefits. The Electric Car Scheme Holdings Limited is a member of the BVRLA (10608), is authorised and regulated by the FCA under FRN 968270, is an Appointed Representative of Marshall Management Services Ltd under FRN 667174, and is a credit broker and not a lender or insurance provider.
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