Beyond the sticker price: The hidden costs of electric vehicle ownership
You’ve done the maths. An EV saves you money on fuel, qualifies for tax incentives, and looks like the smart financial move to make.
You pull the trigger on that sleek new electric saloon or SUV, confident you’re backing the right horse.
Then reality bites.
Your insurance renewal arrives—and it’s substantially higher than your old petrol car. Three months later, you’re replacing tyres that have worn out twice as fast. The home charger installation that “should be straightforward” needs electrical upgrades, adding hundreds or even thousands to the bill.
Suddenly, those fuel savings don’t look quite so impressive – welcome to the hidden costs of EV ownership.
Whilst we’re not here to be discouraging about the switch to electric, making an informed decision is important when speaking about such amounts of money, and EVs can come with costs that aren’t that obvious to many.
Insurance: The shock nobody mentions
Let’s start with the big one that catches most new EV owners off guard: insurance premiums.
For those in the UK, personal EV insurance averages a premium of roughly 15-25% more than that of a petrol or diesel car. In the US the gap is even wider: EV insurance premiums average 49% higher than petrol cars in the States.
Why the disparity? Three main culprits.
First, repair costs are substantially higher for EVs because fewer garages have the specialist equipment and trained technicians to work on them.
Second, if your battery sustains damage in an accident, it can be extremely costly, significantly driving up premiums.
Third, insurers simply have less historical data on EV claims, making them more cautious with pricing.
For many drivers, these insurance premiums alone can completely erase the first two-three years of fuel savings. It’s a reality check that hits hard when that renewal notice arrives.
The good news? As EVs become more common and repair networks expand, these premiums are gradually coming down. But for now, it’s something to budget for.
Tyres: Death by a thousand miles
Here’s a cost that sneaks up on you: tyres.
EVs are simultaneously heavier than their petrol equivalents (thanks to those battery packs) and deliver instant torque from a standstill (again, thanks to those batteries).
The combination is murder on tyre tread.
EV tyres wear 20% faster than traditional tyres due to instant torque and vehicle weight. But it gets worse—you can’t just fit standard tyres.
A Michelin e.Primacy tyre for a Volkswagen ID.3 costs £165 from Halfords, compared with £91 for a regular Primacy 4 tyre fitted to a Volkswagen Golf.
That’s a £74 difference per tyre, or nearly £300 for a full set.
Fleet data from September 2023, meanwhile, shows the average ICE tyre cost £168 while an electric equivalent cost £222 – 32% more.
The US has experienced a similar pattern, with EV-specific tyres costing $120-240 per tyre versus $65-135 for standard tyres – a premium of 30-60%.
Why the premium? EV-specific tyres need reinforced sidewalls to handle the extra weight, special compounds for low rolling resistance (to maximise range), and noise-reduction features since there’s no engine rumble to mask road noise.
So if you’re covering 30,000-40,000 miles before needing new tyres instead of the 50,000+ you’d get from a petrol car, and paying 30-60% more when you do replace them, you could be looking at an additional £500-1,000/$650-1,300 over a typical ownership period.
The battery reality check
The battery is the elephant in the room – or rather, the elephant under the floor.
It’s the single most expensive component of your EV, and while outright failure is rare, degradation is inevitable.
The good news first: modern EV batteries degrade at an average rate of 2.3% per year, and only 2.5% of EVs need battery replacement. Most manufacturers warrant their batteries for 8-10 years or 100,000-150,000 miles, covering you against catastrophic failure.
But here’s what the warranty doesn’t tell you: that gradual degradation means your 250-mile range becomes 220 miles after four years, then 200 miles after seven. For many drivers, that’s manageable. For those doing regular long journeys, it’s a concern that grows each year.
And when replacement does become necessary – either because of unusual failure or simply outliving the warranty – you’re looking at £5,000-20,000/$6,000-25,000 depending on the vehicle.
It’s a low-probability, high-impact cost that hangs over EV ownership like a sword over Damocles.
The silver lining? Moderate climates, like the UK’s, are actually among the best environments for battery longevity. Extreme heat and cold accelerate degradation far more than temperate weather.
Charging infrastructure & public costs
If you have a driveway and can install a home charger, you’re golden. But the upfront costs vary dramatically between markets, and public charging can be punishingly expensive.
Home Charging Installation
Naturally, if you’re in the market for an EV, being able to charge your vehicle at home is one of the main benefits. But set-up costs can be pretty demanding.
The average electric car charger installation cost in the UK is around £1,000 (or £650 if eligible for a government grant). Once installed, you can charge for as little as 7-9p per kWh on special EV tariffs.
And it’s a fairly similar story over in the US, with charging installation costs $963 on average, ranging from $300 to $2,500. The federal government offers a 30% tax credit for EV charger installation costs, up to $1,000. Once installed, the average American pays $0.18 per kilowatt-hour, though this varies from $0.12 in Washington to $0.41 in Hawaii.
Public charging costs
There is already a perception that charging whilst on the move is going to get expensive, so probably isn’t too much of a surprise to learn that compared to home charging, public chargers cost considerably more.
As of January 2025, average pay-as-you-go prices in the UK are approximately 53p per kWh for slow/fast chargers and 81p per kWh for rapid/ultra-rapid chargers. Compare that to 7-9p at home, and you’re paying 6-10 times more.
Today’s AAA US average for public charging is $0.384 per kWh, while DC fast-charging averaged $0.49 per kWh in Q3 2025. That’s 2-3 times more expensive than home charging.
The “convenience tax” is brutal. In the UK, if you’re doing 10,000 miles annually relying entirely on public rapid charging, you’re looking at £1,570-1,850 per year versus just £350-450 at home.
In the US, meanwhile, public charging costs about $1,234 annually compared to $589 at home for the same mileage – about $645 more.
This is why EVs make far more financial sense for homeowners with driveways than for flat-dwellers relying on street parking.
Depreciation & The Changing Fee Landscape
For years, the story was simple: EVs depreciated faster than petrol cars, end of story. But 2025 told a more nuanced tale.
EVs lose more than $5,000 annually in value on average, compared to $2,500-$4,000 for petrol vehicles. Average EV depreciation sits at 38-42% after three years vs. 35-40% for petrol vehicles.
That’s still a gap, but it’s closing. Early EVs with limited range and outdated tech took a hammering in the used market, but modern long-range models with decent charging speeds are holding their value far better.
The Tax and Fee Creep
From April 2025, EVs in the UK now pay Vehicle Excise Duty (road tax) – £195 per year for most models, or £605 for cars over £40,000. After years of exemption, this is a significant new annual cost.
Meanwhile, 40 states in the US now impose higher annual vehicle registration fees for EVs, ranging from $50 in Hawaii and South Dakota to $260 in New Jersey. Additionally, the federal tax credit of up to $7,500 for qualified EV purchases ends for vehicles purchased after September 30, 2025.
Some manufacturers are also introducing subscription fees for features like heated seats and advanced navigation.
The Bottom Line: Are EVs Still Worth It?
Here’s the honest answer: it depends on your circumstances and location.
You’ll likely save money if you:
- Have a driveway and can charge at home
- Do high annual mileage (12,000+ miles/year)
- Can take advantage of off-peak electricity rates
- Live in a region with lower electricity costs
You might struggle to save if you:
- Rely primarily on public charging
- Do low annual mileage (under 8,000 miles/year)
- Live in high-electricity-cost areas (Hawaii, California, UK rapid charging networks)
- Can’t absorb the higher insurance and tyre costs
The key is going in with your eyes open. EVs aren’t a magic bullet for cheap motoring. They’re a different trade-off: lower fuel and maintenance costs, but higher insurance, tyres, and potentially charging infrastructure.
Run the numbers for your specific situation before signing on the dotted line.