Is it profitable to buy an electric vehicle?

Penalties for combustion-powered vehicles, the introduction of Low Emission Zones, the energy transition and the substantial bonus currently in place for electric vehicles... All of these factors may convince you to take the plunge. But is buying an electric vehicle profitable? When are electric vehicles most profitable?

First of all, it is important to mention the number of kilometres driven per year, which must be quite high... When comparing combustion and electric vehicles, assumptions of between 10,000 and 20,000 km per year are used. A 2011 study conducted by a consulting firm advising the Prime Minister estimated a cost per km of €0.317, as opposed to €0.275 for a combustion-powered vehicle, based on the following assumptions: 13,000 km/year, battery cost of €350/kWh, and electricity price of €0.15/kWh. (1)

The cost of the battery then put a considerable strain on the user's budget, despite the savings in terms of operating and maintenance costs. Maintenance costs are 70% lower for electric vehicles than for combustion-powered cars (2), which have increased by more than 25% in 5 years (3).

How far have we come from 2011 to 2022 in terms of the costs associated with an electric vehicle?

While electricity prices have increased slightly to reach an average of €0.174 (incl. tax) per kWh of electricity in 2022 (4) (3), the cost of batteries has since drastically declined. According to Bloomberg, the cost of lithium-ion batteries has dropped by more than 80% in about ten years: it went from $1,100/kWh in 2010 to only $137/kWh in 2020. Please note that the cheapest battery is currently that of the Renault Zoé, which costs €163/kWh.(5) Thus, a drop below $100 should be imminent in the next few years, as cell production continues to ramp up.  (6)

The continuation of the ecological bonus and the recent increase in fuel prices show a significantly reduced gap between the overall expenses for combustion and electric vehicles at the moment... knowing that the electric kWh is of course exempt from the Domestic Duty on Consumption of Energy Products (TICPE), which has a heavy impact on the current cost of fuel. It would thus be in your best interest to drive more with an electric vehicle, considering the savings in operating costs. (2)

Is it really more economical to drive an electric car?

According to UFC-Que Choisir, electric vehicles will definitely be more cost-effective over their entire lifespan from 2024 onwards, especially large cars, which will still be more expensive than diesel and hybrid petrol cars until 2023. As for small city cars, the 2023 point of convergence would be related to the potential end of the significant ecological bonus for electric cars.

The cost of charging: the strength of electric vehicles

As we all know, the energy sector has been hit by a major increase in fuel prices. These rates would be high enough to discourage drivers of combustion-powered cars from using their vehicles, if an alternative option were available. While a full tank of petrol can very easily cost you a lot of money depending on your trips, a full charge of the battery will very often cost less than 15 Euros, depending on the charging capacity of your vehicle.

So the payback starts right away after you have purchased your electric vehicle!