ELECTRIC CAR OWNERSHIP: AN AFFORDABLE OPTION FOR ALL CONSUMERS The role of EU regulation in bringing environmental and financial benefits to ...
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ELECTRIC CAR OWNERSHIP:
AN AFFORDABLE OPTION
FOR ALL CONSUMERS
The role of EU regulation in bringing environmental and financial benefits
to Europeans
The Consumer Voice in Europe
April 2021
Contents
CONTENTS
IN A NUTSHELL 4
KEY FINDINGS 5
FINDINGS AND RECOMMENDATIONS 6
Why this research? 6
Who participated in this study? 6
What did we find? 6
BEUC RECOMMENDATIONS 8
DETAILED RESULTS AND CASE-STUDIES 9
Context 9
Methodology 10
Findings 12
Conclusion 21
3Electric car ownership: An affordable option for all consumers
IN A NUTSHELL
Between July 2020 and March 2021, BEUC, The European Consumer
Organisation, and nine of its members commissioned a study on the life-
time cost (Total Cost of Ownership, TCO)1 of passenger cars. Conducted
at European level and within nine countries2 by consultancy Element
Energy, it compares the costs of owning diesel and petrol (internal com-
bustion engines – ICE), hybrid, plug-in hybrid (PHEVs), hydrogen and
battery electric vehicles (BEVs) over their entire lifetime – from first to
third owner. For simplicity purposes: when this report refers to an ‘elec-
tric car’ it concerns the ‘BEV’.
DIESEL AND PETROL ENGINES HYBRID PLUG-IN HYBRID HYDROGEN BATTERY ELECTRIC VEHICLES
1
Total Cost of Ownership is the life cycle cost of a product. It includes the purchase of the vehicle but also the costs of petrol, diesel or electricity
consumption, insurance, maintenance, etc. TCO therefore also applies to cars bought second-hand (for the second or third owner).
4 2
Belgium, Cyprus, France, Germany, Italy, Lithuania, Portugal, Slovenia, Spain.Key findings
KEY FINDINGS
a. High mileage consumers (commuters, company car users,
taxi drivers) can already save money today by switching to
01
electric due to lower running costs.
b. The arrival of more affordable electric cars with lower battery
range will drive down TCO costs for several user groups
should they want to buy new: urban/suburban citizens,
A medium-sized electric car bought today is already the most pensioners, or families switching (one of) their cars to an
financially interesting solution over the car’s lifetime. While electric one.
the first owner will, on average, be better off by switching to c. Access to off-peak electricity tariffs at home is a game
electric as of 2025, every new electric car sold today will bring changer for BEV users. For a medium BEV, first owners with
significant savings to its second and third owners. However, access to such tariffs will already have a cheaper TCO than
some first owners can see financial benefits already today: those driving on petrol.
02
National incentives (bonuses, tax cuts) are important tools
03
Even when considering purchase incentives for first own-
for the transition. By tackling higher upfront costs for first ers, electric cars are the most equitable powertrain. That
owners, they raise the market share of electric cars and fast is because the first owner, who is most able to afford it, pays
forward the future benefits for second and third owners. a higher proportion of the car’s lifetime costs.
€
04
Plug-in hybrids, even if charged regularly, are not a finan-
cially advantageous solution for consumers. Second and
third owners – who are less likely to have off-street parking
solutions such as a garage or driveway – will be less likely
to make use of these cars’ limited charging potential. They
05
E-fuels – which are new synthetic fuels – represent a
would therefore rely on the combustion engine alone to costly solution for consumers. Price-parity with petrol
power what is a heavier vehicle, causing increased running would only happen by 2037 while electric cars remain per-
(and potentially maintenance) costs. manently competitive.
5Electric car ownership: An affordable option for all consumers
FINDINGS AND
RECOMMENDATIONS
Why this research? - First owners will on average be better of a second-hand market, as well as
This is the second study of its kind, fol- off by switching to electric in 2025. reduce CO2 emissions.
lowing one published in November 2016. That is because they face the bulk of
Since then, the European Union (EU) has depreciation costs. Yet pensioners, suburban drivers or fam-
increased its climate ambition,3 while the - Second and third hand owners will ilies using a second car for short, regular
sales of electric vehicles have taken off make savings for each electric car commutes can also look forward to driv-
thanks to stricter EU CO2 emission stand- sold new today as they will bear less ing electric before 2025 should they rely
ards in 2020/2021 and new models being of the car’s depreciation and benefit on car use and prefer to buy new. There
brought to the market. This new study from low running costs. This illustrates is a role for regulation here. Stricter CO2
reflects on these significant changes the value of stimulating a second and emission standards for cars will nudge
and updates the previous TCO models. third hand market for these vehicles. manufacturers to bring more BEVs to
It also takes a closer look at specific user market at a more affordable purchase
groups – commuters, pensioners, urban Similarly, the first owner of an electric car price that will approach the price of
citizens – and, crucially, the many peo- (BEV) would pay a higher proportion of equivalent petrol and diesel cars. Some
ple who buy second and third hand cars. the car’s lifetime costs compared to other manufacturers4 have announced the re-
powertrains (47%, versus 41% for a petrol lease of BEVs with lower battery range
Who participated in this car). As such, BEVs can be considered as (200-300km compared to the market av-
study? the most socially equitable powertrain erage battery size of 479km range) that
The following nine BEUC members, na- on the market, as first owners with more could fit many consumers’ daily needs
tional consumer groups, participated financial means contribute to a greater – 49% of EU consumers drive less than
in the study: Test Achats/Test Aankoop extent to financing the green transition. 10,000 km per year. With the upfront costs
(Belgium), Κυπριακού Συνδέσμου being kept a competitive level compared
Καταναλωτών/Kypriakos Syndesmos On the value of driving electric to their diesel or petrol equivalents, these
Katanaloton (Cyprus), UFC-Que for specific user groups new BEVs can provide savings to their
Choisir (France), Verbraucherzentrale Our findings also show that not all first owners already today.
Bundesverband (Germany), Altroconsumo first owners of a medium-sized elec-
(Italy), Lietuvos vartotojų organizaci- tric car will have to wait until 2025 to The analysis of user groups in each
jų aljansas – LVOA (Lithuania), DECO save money. Commuters, company of the nine focus countries confirms
(Portugal), Zveza Potrošnikov Slovenije car users or taxi drivers who usually these findings and provides addition-
– ZPS (Slovenia) and Organización de drive more than the average consum- al information on the examples men-
consumidores y usuarios – OCU (Spain). er (over 15,000km a year) have a clear tioned above. Our research considered
The research was coordinated by consul- incentive to buy a BEV already today the national price of fuel or electricity,
tancy firm Element Energy. due to its lower running costs com- VAT, consumer habits (annual mileage,
pared to conventional petrol and die- ownership length), access to private
What did we find? sel cars. Moreover, these ‘high mileage charging, and possible purchase sub-
The main EU-wide conclusion of this consumers’ usually keep their car for a sidies in a particular country. The TCO
study is that a medium-sized electric car shorter period and emit a greater share was then calculated for different user
bought today is already the most finan- of the total CO2 emissions from cars. types that reflect real consumer behav-
cially interesting solution over the car’s They are therefore key target groups iour. Scenarios include the purchase of
lifetime. Concretely, this means that: that can accelerate both the growth a first-, second- or third- hand vehicle.
3
T he European Green Deal published in December 2019 sets a CO2 emission reduction target for the transport sector of -90% by 2050 (from
1990). The previous target was -60%.
4
For example, Renault has recently announced its Dacia Spring, with a battery range between 230 and 305km with a price of €17 000 to €18 500
without considering purchase incentives at national level.
6 5
Comparisons are made against an equivalent petrol model. The study analyses each powertrain in more detail.Findings and recommendations
National examples confirming the EU period a socially fair policy. National reach price parity until 2037. Moreover,
findings are numerous:5 authorities therefore have the tools to they do not compete with the savings
- A Spanish commuter driving over facilitate the uptake of electric cars to offered by BEVs. By the time the TCO
30,000km per year can expect to save the benefit of all consumers. for e-fuels mirrors that of petrol, for a
more than €14,000 over the first six vehicle lifetime between 2030-46, they
years by buying a new BEV (even when On charging and its will remain 23% more expensive for
partly charging on the highway where infrastructure consumers to run than an electric car.
prices are usually higher due to higher Similarly, the TCO varies greatly depend-
power delivered). ing on whether users have access to a On the overall gains for
- A German pensioner with a low mileage home charging point or a preferential consumers, their health, and the
(7,500 km per year) would save €300 rate at a public charging station. This re- environment
per year by buying a medium-sized, sec- veals the urgent need to develop high In sum, our analysis emphasises that
ond-hand BEV (bought new in 2020). quality charging infrastructure through- BEVs are the most cost-efficient long-
- A resident of Vilnius using a home out Europe, along roads, at home, at term driving solution for consumers.
charging point would save almost workplaces or in residential buildings. Based on the findings of the study, we
€5,000 over five years by buying a This is particularly the case in Italy and argue that the benefits from an ‘early
second-hand BEV (12,000km a year, Spain, where BEVs are competitive but BEV adoption scenario’ in the coming
bought new in 2020). their market share remains low, due to years are fourfold; financial, social, en-
the lacklustre development of charging vironmental, and health:
On the role of purchase infrastructure. - An ‘early BEV adoption scenario’ would
incentives maximise the financial benefits for all
Despite these clearly established benefits, On other alternatives – beyond segments of consumers.
the study also reveals the need for some electric – to petrol and diesel - It would also be a socially fair policy, as
purchase subsidies or tax breaks dur- cars lower-income consumers can benefit
ing a transitional period. These should Finally, the study investigates the poten- to a greater extent from the switch to
make new BEVs competitive for first tial risks for consumers of technologies electric.
owners, accelerate sales and effectively which are often presented as alterna- - Adopting BEVs as soon as possible of-
create a second-hand market where the tives to BEVs: plug-in hybrids (PHEVs)6 fers the greatest potential for reducing
benefits are even greater. For example, and new synthetic fuels (or e-fuels)7 to emissions. Our study estimates that
in Germany a new small BEV is already power conventional engines: the growth in BEV sales could contri
competitive with a petrol vehicle today - The results show that PHEVs are a more bute to 75% of the emission reduction
because of generous purchase subsidies, expensive powertrain for consumers from new cars by 2030. Similarly, the
whereas without new incentives first compared to BEVs. This is even the case impact of the early adoption of BEVs
owners would have to wait until 2027 in when a PHEV owner mainly drives on on the emissions from the entire EU
Slovenia and 2028 in Cyprus. electric mode – and thus charges their fleet (old and new cars) could be ex-
car a lot – as laboratory tests assume. tremely significant with regards to the
A major criticism of these purchase in- Such additional costs escalate signifi- EU’s climate ambition by the end of
centives or tax cuts is that they would cantly when a PHEV is charged rarely the decade. An ambitious regulatory
only benefit high-income consumers. or not at all, the vehicle becoming re- framework to promote the uptake of
However, even if first owners bene- spectively 17% and 27% more expensive BEVs will therefore contribute to get-
fit from a purchase subsidy – say of than a BEV in 2030. More importantly, ting consumers on board the green
€7,000 – they would still bear a greater an increase in PHEV sales has an im- transition.
share of the costs of the vehicle against pact on second and third owners, who - Finally, considering the impact of air pol-
second and third owners than if they are less likely to have access to off- lution on citizens’ health, the transition
had bought a new petrol car. Seeing street (garage, driveway) charging. to cleaner electric vehicles would benefit
the demonstrated savings for second - Even going by the most optimistic pro- everyone, but especially those living in
and third owners, this renders the pro- jections, e-fuels are currently 80% more big cities where car traffic is responsible
motion of BEV sales for a transitional expensive than petrol and will not for a high share of harmful pollutants.
6
Plug-in Hybrids (PHEVs) are cars combining a conventional combustion engine with an auxiliary electric engine that can be recharged from
a socket.
7
Synthetic fuels, or “E-fuels” are liquid fuels produced with the help of electricity, water and CO2 from the air or industrial emissions. 7Electric car ownership: An affordable option for all consumers
BEUC
RECOMMENDATIONS
- Our research indicates there is a lot of and diesel cars emitting more while those on lower-incomes, without
potential for a cleaner automotive mar- manufacturers respect their overall providing sufficient access to more
ket that would bring financial benefits emission reduction targets. energy-efficient mobility and heat-
to consumers. Decision-makers must ing/cooling alternatives.
nevertheless regulate to help consu - Accompany an ambitious regulation
mers in this transition. The following on CO2 emission reductions with •P
rotect consumers’ health by im-
recommendations must be considered other policies: proving the efficiency of combus-
in this regard: legislate for more strin- • Make electric charging a real and tion engines:
gent CO2 emission reduction targets convenient option for consumers: – A s air pollution caused by trans-
for cars. This will incentivise car makers – Improve the charging experience port remains a major problem across
to bring more electric models to the with public stations. This requires a Europe, It is essential to establish
market, stimulating their uptake and swift revision of the EU’s Alternative stringent emission limits for harmful
the growth of second- and third-hand Fuels Infrastructure Directive in order pollutants such as nitrogen oxides
markets. The revised regulation should: to make payment easy and charging (NOx) and particulate matters (PM)
• Tighten the 2025 and 2030 targets; set tariffs transparent (in €/kWh). via ambitious post-EURO 6 standards.
an intermediate target in 2027; reach – Encourage and facilitate the installa-
a target of 0g CO2/km by 2035 at the tion of private charging stations, in- - Support consumers as the world tran-
latest. cluding for consumers living in flats or sitions from petrol/diesel to electric
without access to private parking. This cars. In the run up to cost-parity be-
• Remove regulatory mechanisms that requires amending the EU’s Energy tween these cars – for a medium-sized
allow carmakers to artificially reduce Performance of Buildings Directive. car slated EU-wide in 2025 – innovative
their fleet emissions, emit more, pro- measures and incentives in favour of
mote the sales of PHEVs, or lower the • Give consumers the right informa- BEVs at national level must be or remain
ambition of their target. Achieving tion when they are willing to buy in place. These should consider the dif-
the targets should be done primari- a new car: ferent budgets of European households.
ly through the uptake of BEVs. – T he 22-year-old Car Labelling Practically this can take the form of:
Directive was established at a time • Purchase incentives for BEVs only, tax
• Prevent manufacturers from count- where electric cars were not on the cuts and targeted financial help for low-
ing the production of e-fuels as part market. This law should be revised er-income consumers (such as conver-
of their effort to reach fleet emission to give trustworthy information for sion premiums). PHEVs should not be
reduction targets (via a crediting sys- both combustion engine and electric incentivised due to inconsistent charg-
tem) as they would represent costly car owners. Specific requirements for ing behaviours and their detrimental
solutions to consumers and deter the the latter would be to show the real long-term cost effects for second and
needed investments in BEVs. driving range, maximum charging third owners.
speed and average charging time. • Support for the installation of a charg-
• Monitor real-life fuel consumption to ing station at home (or within a resi-
avoid potentially growing emissions •O
ppose the inclusion of road trans- dential building) via financial means,
from combustion engines and therefore port in the EU carbon market: smoother administrative procedures,
higher fuel consumption (and costs). – There is a growing push to include or demand-driven rollout schemes
The combined effects of diverted in- road transport in the EU carbon for charging stations in the streets.
vestments from conventional engines market – known as the Emission • Targeted measures to accelerate the
to electric cars and the increased mar- Trading System. Yet this could harm electrification of company fleets, tax-
ket share of BEVs could lead to petrol consumers financially, especially is, shared cars.
8Detailed results and case-studies
DETAILED RESULTS AND
CASE-STUDIES
Context an estimated level of 107 g/km in 2020. of electric vehicles currently available
Driven by the EU regulation on CO2 This equals a reduction rate of about 1 g/ does not sufficiently bring the prices
emission standards for cars and vans km per month, while from 2015 through down.
that requires them to reduce their fleet 2019 the rate of reduction was at about - Subsidies and purchase incentives in
emissions, manufacturers have been 0.6 g/km of CO2”11. many Member States have contrib-
bringing more and more electric car uted to an increase in sales but have
models to the market in recent years. BEVs are by far the most energy-effi- sometimes insufficiently addressed the
With the overall target of 95g CO2/km cient solution12. This technology is sup- needs of middle- and lower-income
for the years 2020/2021,8 manufactur- ported by investment announcements consumers, while these subsidies vary
ers have stepped up the pace in 2020 from manufacturers and the observed enormously across Europe – or sim-
and sales have soared: in the last quar- growth in sales of these vehicles, and ply do not exist for the vast majority
ter of last year, 250,000 battery-electric the installation of new charging sta- of Member States.
cars (BEVs) and 227,000 plug-in hybrids tions. Compared to other alternatives - The lack of information to consumers
(PHEVs) were registered in the EU. These (LPG, CNG, hydrogen), BEVs are the most on the technical characteristics of elec-
figures represent an increase of 217% likely to be developed on a large scale in tric vehicles is also glaring, especially
and 331% respectively compared to the the near future to meet the EU’s climate when it comes to the real-life battery
same period in 2019. In total, more than commitments. range and charging capacity.
one million electrified vehicles (BEVs + - The promotion, sometimes wrongly,
PHEVs) were registered in 2020, repre- However, while the environmental13 and of plug-in hybrids as company cars
senting 11% of vehicles sold in Europe health14 benefits of battery-electric cars or for private individuals who cannot
(compared to 3% in 2019)9 . have been clearly demonstrated, the regularly recharge their batteries.
question of financial benefits for con-
Although not perfect10, the regulation of sumers remains divisive, mostly about Before the publication of a revised pro-
CO2 emission standards is a good exam- the affordability of these vehicles for posal for a regulation on CO2 emission
ple of sectoral legislation leading to sig- middle and lower-income consumers. standards for cars in the “Fit for 55” pack-
nificant market effects. The target set for In addition to concerns about recharg- age in June 2021, BEUC wished to clarify
2020/2021 has resulted in unprecedented ing infrastructure and range15, several this debate on the financial benefits that
emission reduction. As the International issues remain: BEVs can bring through a large study on
Council for Clean Transportation notes: - Due to their higher purchase price, the Total Cost of Ownership (TCO) of ve-
“Average new car CO2 emission levels they are still inaccessible for many hicles (all engines combined).
went from 122 g/km (NEDC) in 2019 to households, and the limited number
8
In 2020, a 95% “phase-in” was foreseen by the regulation. This means that manufacturers could exclude 5% of their most polluting cars from
the calculation of their fleet emissions. This exemption falls in 2021, with all vehicles being integrated in the calculation.
9
ACEA (February 2021), New passenger car registrations by fuel type in the European Union. Quarter 4 2020, https://www.acea.be/uploads/
press_releases_files/20210204_PRPC_fuel_Q4_2020_FINAL.pdf, (accessed 12 April 2021).
10
The 95g/km for CO2 emissions is theoretical for 2020. Several mechanisms allow car manufacturers to emit more than the lab-tested limits,
while the measurement of real-life emissions is slowly being implemented. Source: European Commission, ‘Reducing CO2 emissions from pas-
senger cars – before 2020’ [website], https://ec.europa.eu/clima/policies/transport/vehicles/cars_en, (accessed 12 April 2021).
11
The International Council on Clean Transportation (January 2021), Market monitor: European passenger car registrations, January–December
2020, https://theicct.org/publications/market-monitor-eu-jan2021, (accessed 12 April 2021).
12
Transport & Environment (March 2021), From dirty oil to clean batteries, https://www.transportenvironment.org/sites/te/files/publica-
tions/2021_02_Battery_raw_materials_report_final.pdf, (accessed 12 April 2021).
13
Transport & Environment, Does an electric vehicle emit less than a petrol or diesel?, 21 April 2020, https://www.transportenvironment.org/
news/does-electric-vehicle-emit-less-petrol-or-diesel, (accessed 12 April 2021).
14
Matteo Barisione, ‘Electric vehicles and air pollution: the claims and the facts’ [web blog], European Public Health Alliance, 5 March 2021,
https://epha.org/electric-vehicles-and-air-pollution-the-claims-and-the-facts/, (accessed 12 April 2021).
15
BEUC (May 2019), Making electric cars convenient, https://www.beuc.eu/publications/beuc-x-2019-032_making_electric_cars_convenient.pdf. 9Electric car ownership: An affordable option for all consumers
This study carried out at European level income households, BEUC and its mem- - Taxes (VAT, registration tax, annual tax)
and in nine countries16, gives both aver- bers aim to engage consumers in the and subsidies
age projections for the European Union ecological transition by also providing - Insurance and maintenance costs
but also identifies specific categories of clear recommendations for them when
consumers (commuters, pensioners, it comes to choosing a car. To keep up with market developments
urban citizens, etc.) to give the most in the years to come, the study uses evi-
realistic estimate possible of the gains Methodology dence-based assumptions on the evolu-
from the purchase of a new, second- or EU-level analysis tion of the price of various components,
third-hand BEV. The Total Cost of Ownership calculates the improvement in fuel/electricity con-
the lifecycle cost of a product. This means sumption, the development of efficiency
The study also looks at several scenar- comparing vehicles beyond their pur- technologies, the introduction of new
ios relating to consumer habits (annu- chase price to estimate the real cost for emission-control systems (EURO7) and
al mileage, ownership length), access consumers throughout the ownerships the progress in batteries’ real capacity.
to home charging, changes in the cost of the vehicle. The following elements The study then constructs future vehi-
of certain electric car components and compose the TCO of vehicles: cles by gathering assumptions for all
the emergence of new synthetic fuels, - Vehicle pricing and components costs components together (see Figure 1).
often called ‘e-fuels’. - Efficiency measures required by EU
regulation (EURO6)
By focusing on these specific categories - Market depreciation
and addressing the needs of the lowest - Fuel/electricity costs and consumption
01 Data on the cost and performance
attribute of every vehicle available
on the market collected
02 Sales weighted averages of each
vehicle attribute derived, providing
03 Prices and performance attributes of
all HEVs, PHEVs and BEVs reviewed
Petrol and Diesel ICE averages for to identify trends
each segment
04 Component costs and efficiencies
for today and in the future
05 Chassis cost/efficiency estimated by
substracting components from
collected from latest literature Petrol and Diesel ICE averages
06 Current and future vehicles built by
adding necessary components to chassis
07 Outputs calibrated against
today’s market trends
Figure 1: Overview of steps taken to construct future vehicles. Numbers indicate modelling order.
16
BEUC members Test Achats/Test Aankoop (BE), Κυπριακού Συνδέσμου Καταναλωτών (CY), UFC-Que Choisir (FR), Verbraucherzentrale
Bundesverband (DE), Altroconsumo (IT), Lietuvos vartotojų organizacijų aljansas – LVOA (LT), DECO (PT), Zveza Potrošnikov Slovenije – ZPS
10 (SI) and OCU (ES) participated in this study led by Element Energy.Detailed results and case-studies
Once the overall manufacturing cost of National TCO inputs other powertrains for a higher annual
each vehicle has been calculated, a margin The values presented hereabove are mileage than the EU average.
is applied to calculate the purchase price adapted in our country analysis to better - Release of cheaper BEVs: Lower range
a consumer would see in a showroom. reflect consumer behaviour. Our mem- battery forecasts and the introduction
bers provided data on the fuel/electricity of BEVs with a cheaper upfront cost can
These elements and assumptions allow price, the annual mileage, the average boost the TCO of BEVs while respond-
a comparison of the different power- ownership period or the tax and subsi- ing to the needs of many urban/sub-
trains for each vehicle segment. The dies in place in 2020. urban consumers.
powertrains studied are: diesel, petrol, Additionally, for each of the nine coun- - Different access to charging: Charging
hybrids, plug-in hybrids (high, low and tries considered in this study, the situ- costs can be highly variable depending
no charging), fuel cell (hydrogen) and ation of three user groups represent- on a driver’s situation: off-peak resi-
battery electric vehicles. ing real-life scenarios were analysed to dential electricity can cost less than
provide consumers with concrete infor- 10 c/kWh while fast public charging
CNG and LPG have not been consid- mation that can be applied to their re- can cost over 70 c/kWh.
ered in the TCO study as they repre- spective cases. User groups were cho- - Delayed introduction of EURO7 stand-
sent a low and decreasing market share sen among: ards: The timing of the introduction
in the EU average fleet (despite some - Company car drivers and commuters of EURO7 is still uncertain and could
growing markets in Europe because of - Single or multiple car households influence TCO-parity between BEVs
extremely low sales in gross figures). - Consumers with access to home charg- and petrol/diesel cars.
Moreover, car manufacturers do not ing / rapid or slow public charging - Charging scenarios for PHEVs: There
plan to reshape their business models - New or used car buyers are various usages of PHEVs, some con-
around these powertrains. - Rural or urban citizens, pensioners, sumers using the electric engine only
part-time workers, … while others barely charge their vehi-
For ease of understanding, the study clas- cle (for example, company cars with
sifies the vehicles into three categories: For each scenario, the study breaks down a fuel card). The study considers the
small, medium, and large. Moreover, in the costs of each TCO component to al- TCO costs for three PHEVs scenarios:
order to assess the cost for each owner low consumers to modulate each cost high, low and no charging.
of the same vehicle, the following val- according to their needs and habits. - Costs of e-fuels: There is a growing
ues were chosen to estimate ownership These real-life examples support the EU push for e-fuels to help decarbonise
periods at EU level: findings and refine the results. National combustion engines. The study as-
- First ownership (four years – 15,000 km reports have been published and pro- sesses the costs of these e-fuels for
per year) moted by our members. consumers and their potential com-
- S econd ownership (five years – petitiveness with other powertrains,
12,000 km per year) Extra sensitivities notably BEVs.
- T hird ownership (seven years – In addition to the elements included in
10,000 km per year) the TCO study, the study includes six
sensitivities in its EU-level analysis, each
Note: the graphs presented below show of them representing risks or opportu-
the benefits for second and third own- nities for faster BEV uptake:
ers based on the year the car is bought - Consumers having higher annual mile-
new and the ownership periods pre- age than EU average: The study assess-
sented above. es the gains and costs of BEVs versus
11Electric car ownership: An affordable option for all consumers
Findings
Main EU-wide findings and confirmation by national examples
How much consumers can save now or in the future by going electric
Finding: A medium-sized electric car bought today is already the most financially interesting solution over the
car’s lifetime. While the first owner will, on average, be better off by switching to electric as of 2025, every new
electric car sold today will bring significant savings to its second and third owners.
€110k
€100k
Lifetime TCO: Medium Cars
€90k
€80k
€70k
€60k
2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030
Year vehicle bought new
Petrol ICE Petrol HEV PHEV (high charging) PHEV (no charging) Diesel ICE BEV Fuel Cell (H2)
Figure 2: Lifetime owner TCO comparison between different powertrains for a medium car. Note that the year indicates when the
car is first bought new.
BEVs are already the cheapest power- For first owners, a medium- or small- The Portuguese case study shows that
train on a lifetime basis for medium cars sized BEV becomes cheaper than a petrol longer ownership periods also offer
bought today, with small and large cars equivalent by 2025. Depreciation repre- greater benefits for BEV owners, with
following in 2023 and 2025, respective- sents the highest cost component for first an eight-year first ownership period of-
ly. Figure 2 shows that the gap between owners of BEVs. Depreciation represents fering a 17% TCO difference with a pet-
BEVs and other powertrains (except fuel the highest cost component for first rol car compared to only 8% for a four-
cell) will keep growing over the years, owners of BEVs. But with upfront costs year period (car bought new in 2020).
demonstrating the unambiguous posi- becoming much more comparable to
tion of BEVs as the future-proof, cost-ef- petrol/diesel cars by 2025, the low run-
ficient option for consumers. This also ning costs of BEVs soon give them a bet-
means that carmakers’ supply of BEVs is ter TCO. Figure 3 shows the importance
essential so that consumers can find them of running costs in the years to come.
across segments in the coming years.
12Detailed results and case-studies
Depreciation VAT Fuel / Electricity Insurance Maintenance
+€0.7k
+€2.0k
€35.8k
-€4.8k
+€2.7k
+€0.1k €33.2k
-€0.6k
-€5.3k
Petrol ICE Electric
Figure 3: First owner TCO cost components compared for a medium car between Petrol ICEs and BEVs bought new in 2025.
As shown in Figure 4, second and third consumers. While first owners (buying solution to get lower-income consum-
owners will see even greater benefits as without purchase incentives) will not be ers on board of the green transition. The
the impact of depreciation becomes sig- better off with a BEV before 2025, second situation can be summarised as follows:
nificantly less important while fuel costs and third owners can expect significant
are the main TCO component for these savings. This shows that BEVs can be a
€12k
€9k
€6k
TCO savings: BEV vs. Petrol ICEs
€3k
€0k
By 2025
BEVs cheaper for first owners
-€3k on a TCO basis
-€6k
2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030
First Owner: Small Second & Third Owners: Small First Owner: Medium Second & Third Owners: Medium
Figure 4: BEV lifetime TCO savings over a Petrol ICE for a medium car bought new by year.
13Electric car ownership: An affordable option for all consumers
Benefits for those driving a lot
Finding: High mileage consumers (commuters, company car users) can already save money today by switching to
electric due to lower running costs.
€12k
First Owner TCO Δ: Petrol ICE – BEV
€10k
€8k
€6k
€4k
€2k
€0k
-€2k
-€4k
2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030
Baseline Company Car (38.400km) High usage (20.000km) Low usage (9.150km)
Figure 5: First owner Δ Petrol – BEV TCO for a medium car by mileage group.
As the running costs of BEVs are par- car fleet CO2 emissions. Targeting these (compared to a petrol car) for high
ticularly competitive in comparison with consumers (commuters, company car mileage commuters18 driving a BEV in
petrol and diesel cars, consumers driving users, taxi drivers, …) to switch to elec- Lithuania, Italy, Spain, Portugal, Cyprus,
over 20,000 km per year can expect a tric will therefore have an even greater and Belgium. A rural citizen in Cyprus,
better TCO already today (see Figure 5). environmental impact while providing driving 17,500 km per year can even ex-
them with financial benefits. pect a 40% difference in TCO savings
Moreover, it is estimated17 that the 24% of by buying a second-hand BEV.
European consumers driving more than National examples confirm these find-
15,000km are responsible for 45% of the ings, with TCO savings of over 20%
Benefits for those driving little
Finding: The arrival of more affordable electric cars with lower battery range will drive down TCO costs for sev-
eral user groups should they want to buy new: urban/suburban citizens, pensioners, or families switching one of
their cars to an electric one.
17
Ricardo-AEA (2014), Improvements to the definition of lifetime mileage of light duty vehicles, https://ec.europa.eu/clima/sites/clima/files/
transport/vehicles/docs/ldv_mileage_improvement_en.pdf, (accessed 12 April 2021).
14 18
Driving 20 000 km or more per year.Detailed results and case-studies
€6k
€5k
First Owner TCO Δ: Petrol ICE – BEV
€4k
€3k
€2k
€1k
€0k
-€1k
-€2k
-€3k
2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030
Baseline 400km range 300km range 200km range
Figure 6: First owner Δ Petrol – BEV TCO for a medium car for smaller battery sizes. Baseline average annual mileage (15.000km)
assumed for all scenarios.
Figure 6 shows the additional first owner charging network. Manufacturers could smaller daily commutes (going to the
TCO cost savings vs. petrol cars available therefore offer vehicles with lower bat- sports club, shopping for groceries, etc.).
for consumers that do not require a high a tery range and less on-board technology With almost 50% of consumers driving
maximum BEV range. This should be seen that would suit many consumers looking less than 10,000 km a year, there is real
in the light of battery costs falling over for a ‘backup’ solution. Think urban cit- potential for such cheaper BEVs.
the years and range anxiety becoming izens relying mainly on public transport
less of an issue thanks to a well-developed or a household using a second car for
Maximum BEV range for different battery size
200km 300km 400km 479k: Current medium car average
96% 96% 98%
88% 91% 90%
80% 80% 80%
67%
62% 67%
49% 49%
36%
22%
≤1 days/yr ≤2 days/yr ≤5 days/yr ≤10 days/yr
# trips per year above BEV range
Figure 7: Estimated days consumers surpass their maximum BEV Worldwide Harmonised Light Vehicles Test Procedure (WLTP) range19
for different battery range scenarios.
For more info – and BEUC’s view on this testing method – see: BEUC, ‘New and improved fuel test for cars enters into force’ [Press release], 1
19
September 2017, https://www.beuc.eu/publications/new-and-improved-fuel-test-cars-enters-force/html, (accessed 13 April 2021). 15Electric car ownership: An affordable option for all consumers
Figure 7 illustrates, across different bat- year. If equipped with an electric car with and 49% will exceed their maximum driv-
tery range scenarios, the proportion of a range of 200km, 22% of drivers will on ing range less than five times a year. This
consumers likely to need to use en-route average require an en-route charging ses- shows that smaller batteries are suitable
charging for no more than a few days each sion on no more than one day per year, for the needs of many consumers.
Off-peak electricity tariffs as game changer
Finding: Access to off-peak electricity tariffs is a game changer for BEV owners. For a medium-sized car, first own-
ers with access to off-peak tariffs at home will already have a cheaper TCO compared to a petrol engine.
There is a great discrepancy in terms of charging is already limiting BEV growth extra €1,700 with their BEV than if they
TCO parity between BEVs and petrol cars (see below). Supporting consumers in the relied purely on on-street public charg-
for consumers depending on whether transition is therefore not only a question ing. With 69% of the French population
they have access to home charging pric- of purchase subsidies. Public authorities having access to off-street parking, there
es. Having to rely solely on public charg- need to make sure they have access to the is a great potential for off-peak tariffs.
ing (11kW) delays TCO parity up to three right infrastructure. As BEUC previously On the other hand, a resident of Vilnius
years compared to off-peak tariffication. explained in a dedicated position paper, relying on public charging for their new
For a medium BEV, first owners with ac- ‘range anxiety’ remains a strong barrier BEV would pay an extra €4,000 over the
cess to off-peak tariffs will already have a for consumers willing to drive electric. ownership period compared to attractive
cheaper TCO compared to a petrol ICE. off-peak tariffs. Similar figures have been
National studies support these findings. reported for Spain, Italy, and Portugal.
There is also evidence that lack of access A French citizen benefiting from the elec-
to home charging and expensive public tricity company’s ‘tarif bleu’ can save an
Electric cars as ‘equitable’ solution for those who rely on driving
Even when considering purchase incentives, electric cars are the most equitable powertrain as the first owner,
who is most able to afford it, pays a higher proportion of the lifetime TCO.
€8k
Government Investment per BEV
€6k
€4k
€2k
Petrol ICE
Equity
€0k
38% 40% 42% 44% 46% 48% 50%
Upfront purchase subsidy Annual tax break (full second-hand stock) Equity index
(First owner / Lifetime TTCO)
Figure 8: BEV equity index for a medium car bought new in 2020 and changes due to purchase subsidies and tax grants.
16Detailed results and case-studies
Figure 8 shows the market equity index20 purchase subsidy of up to around €7,000. is likely to be more limited in the short
for BEVs with different government pur- Similarly, tax breaks appear as an even term. This is another reason why BEUC
chase subsidies or tax breaks. The conclu- more equitable solution as they apply to all advocates for regulatory measures that
sion is that BEVs still drive higher market users – not just to first owners. However, should increase the share of electric cars
equity over their lifetime versus petrol due to current supply limitations within on the market, stimulating the growth of
ICEs even when they have a first owner the BEV second-hand market, this impact second-hand vehicles.
The plug-in hybrid factor
Finding: Plug-in hybrids, even if charged regularly, are not a financially interesting solution for consumers. Second
and third owners – who are less likely to have off-street parking solutions such as a garage or driveway – will be
less likely to make use of these cars’ limited charging potential. They would therefore rely on the sole combustion
engine to drive a heavier vehicle, causing increased running (and potentially maintenance) costs.
Lifetime TCO: % more expensive than BEVs
30%
25%
20%
15%
25% 27%
10% 20%
17%
14%
5%
9% 9%
1% 6%
0%
2020 2025 2030
High charging Low charging No charging
Figure 9: % higher lifetime TCOs for vs. BEVs for a new PHEV bought in 2020, 2025 & 2030.
Figure 9 shows the cost difference for - a low charging scenario – representative In all three scenarios considered (high,
PHEVs in comparison with BEVs. Due of a driver who does not have access to low and no charging), it appears clearly
to the inconsistent charging behaviours daily home or work charging and relies that PHEVs are not a financially interest-
from PHEV drivers, three scenarios have on destination charging (e.g., at a su- ing solution for consumers. More im-
been considered: permarket) a couple times per week; portantly, PHEVs that are not charged
- a high charging scenario – correspond- - a no charging scenario – a driver who become the most economically draining
ing to the type-approval testing pro- does not charge their PHEV and relies powertrain to consumers compared to
cedure and representative of a driver 100% on combustion fuel. all other powertrains. This is particular-
that has access to daily home charging ly important for second and third own-
while driving mainly in electric mode; ers, who are less likely to have access to
20
For this study, the equity index has been defined as the percentage of a vehicles’ lifetime cost that is paid by the first owner. 17Electric car ownership: An affordable option for all consumers
off-street and therefore home charging. long-distance trips. The EU regulation Belgium provides an interesting case
These user groups will mainly suffer from on CO2 standards also allow carmakers study for the use of PHEVs. The coun-
higher running and maintenance costs. to use PHEVs as compliance cars to reach try has seen a record share of PHEVs in
their fleet targets and make up for their 2020 due to generous tax cuts for com-
PHEVs are often in the hands of first own- investments in this powertrain. This has pany cars, becoming the fourth biggest
ers with little or no incentive to use the led to more PHEV sales in the recent market in the EU (in gross figures) with
battery (company car users whose fuel years. For example, in 2020, German more than 31,000 PHEVs sold last year.22
expenses are reimbursed, for example) carmakers had 43 PHEV models on of- Yet many companies providing a car to
or individual consumers attracted by the fer, but only six BEV models. their employees do not facilitate the in-
‘best of both worlds’ adverts (a combus- stallation of a charging point at home
tion engine and an electric one) while The TCO results are in line with what or provide an ‘electricity card’. What
a BEV could meet the vast majority of BEUC members have already shown in is more, some employees still receive
their daily needs (see section, ‘Benefits terms of the real-life fuel consumption a ‘fuel card’ and have little or no incen-
for those driving little’). of PHEVs via several testing projects21. tive to use their electric engine. TCO
The fuel consumption of such cars can results in Belgium show that a compa-
While PHEVs are usually found in larg- be two to three times the one adver- ny car user driving 30,000 km per year
er car segments with higher purchase tised to consumers via laboratory test- would generate a €15,000 saving over
price, carmakers are advertising these ing values. the ownership period by leasing a BEV
cars by exaggerating the fears about rather than a PHEV that would almost
electric range and the need for daily never be charged.
E-fuels are not part of the solution
Finding: E-fuels will represent a costly solution for consumers. Price-parity with petrol would only happen by 2037
and electric cars remain permanently competitive.
Lifetime TCO: % more expensive than BEVs
25%
20%
15%
23% 23% 23%
10%
20% 19%
5%
10%
0%
2020 2025 2030
Petrol ICE E Fuels (Middle East PV)
Figure 10: Percentage higher lifetime TCO vs. BEVs for a new car bought in 2020, 2025 & 2030.
21
See WHICH? (25 February 2021), ‘Plug-in hybrid cars use more fuel than official figures claim’ [Press release], https://www.which.co.uk/
news/2021/03/plug-in-hybrid-cars-use-more-fuel-than-official-figures-claim/, (accessed 13 April 2021); MILE21, Discover the real consumption
of your car [website], https://www.mile21.eu/, (accessed 13 April 2021); and GreenNCAP ( 25 February 2021), ‘Plug-in Hybrid Cars: Are They All
the Same? [Press release], https://www.greenncap.com/press-releases/plug-in-hybrid-cars-are-they-all-the-same/, (accessed 13 April 2021).
22
Test Achats (24 October 2020), ‘Voitures neuves bientôt taxées différemment en Flandre’ [website], https://www.test-achats.be/actions/
18 mobiguide/info/cars/taxe-de-mise-en-circulation-en-flandre , (accessed 13 April 2021).Detailed results and case-studies
E-fuels present a significant financial risk are currently 80% more expensive than 2030, they would still be 23% more ex-
to European consumers. Even based on petrol and do not reach price parity until pensive than BEVs.
the most optimistic projections – which 2037. More importantly, Figure 10 shows
rely on Middle East photovoltaic produc- that while e-fuels powered cars could
tion with no additional fuel duty – e-fuels reach TCO parity with petrol cars by
Lessons learned from national studies
Finding: National incentives (bonuses, tax cuts) are key tools for the transition. By tackling higher upfront costs for
first owners, they raise the market share of electric cars and fast forward future benefits for second and third owners.
Baseline
case
Year car
is bought new 2020 2021 2022 2023 2024 2025 2026 2027 2028
First Ownership Second Ownership Third Ownership
Figure 11: Year that BEVs become cheaper than Petrol ICEs, averaged over all car sizes. Note the year indicated represents when the
vehicle is bought new.
Figure 11 shows the impact of national Subsidies and financial incentives are It is particularly striking to note that a
incentives (or the absence of) for first certainly market drivers: Germany and German commuter driving 25,000km/
owners in terms of TCO-parity with pet- France, which offer the most generous year with their BEV sees a 50% TCO
rol cars. These incentives consequent- conditions for BEV purchase, witness a difference compared to a petrol car.
ly have the power to bring forward or higher market share for this powertrain This is despite generally higher elec-
delay financial benefits for second and and could even envisage phasing out tricity prices in Germany than in the
third owners. their incentives. rest of Europe.
19Electric car ownership: An affordable option for all consumers
Grants and tax cuts are not the only tools and many Spanish consumers not hav-
for national authorities. For example, ing access to home charging in densely
Spain sees a low market share of BEVs populated areas. Figure 12 summarises
despite generous subsidies in place and the situation for each of the nine coun-
consequent TCO savings for some first tries and proposes general recommen-
owners already today. This is explained by dations for public authorities to deploy
the lack of public charging infrastructure BEVs at a larger scale.
2020 FY BEV
% of new 8%
carr sales
6% France
Germany
Higher BEV uptake in local market
Portugal
4%
Belgium
Slovenia
2% Italy
Spain
Lithuania
Cyprus
0%
-€6k -€4k -€2k €0k €2k €4k €6k €8k €10k €12k
2020 First owner TCO savings:
Increasing TCO savings vs. Petrol ICEs BEVs – Petrol ICEs
Bubble size = total 2019 passager car
registrations (all powertrain) Illustrative exponential BEV uptake
Low growth due to cheaper Petrol ICEs TCO advantage dependant on subsidies
increase subsidies & tax breaks maintain grants & tax breaks
High TCO savinbgs vs. Petrol ICE Low BEV growth despite TCO savings
phase out government subsidies charging access & BEV supply
Figure 12: Small & medium cars BEV % of 2020 market sales vs first owner Δ TCO to Petrol ICEs.
20Detailed results and case-studies
Conclusion is a socially fair policy that can maxim- standards for cars, this is a key message
With these cost savings brought by ise both the environmental and financial to policymakers willing to engage con-
BEVs for many user groups in mind, the benefits, as shown in Figure 13. Ahead of sumers in the green transition.
study concludes that promoting them the revision of the EU regulation on CO2
Lifetime TCO
savings vs. 15%
Petrol ICEs
10% Petrol PHEV
Diesel ICE (high charging) BEV
5%
Petrol Full Hybrid
0% Petrol ICE
Petrol PHEV
Cheaper for consumers
(low charging)
-5%
Petrol PHEV
-10% (no charging)
Fuell Cell (H2)
-35%
-15 -10 -5 0 5 10 15 20 25
Lifetime tailpipe CO2 savings
Lower CO2 Emissions (tonnes, WLTP)
Low Emission Vehicles Combustion Engine
More expensive & high CO2 TCO +ve but high CO2 costs
poor value for consumers phase out with BEVs
High TCO & CO2 savings CO2 savings but expensive
best value for consumers cost reduction needed
Figure 13: Medium car bought new in 2020 – lifetime savings over a petrol ICE and total lifetime WLTP tailpipe CO2 savings vs. 2020
baseline (125gCO2/km) per vehicle.
21Electric car ownership: An affordable option for all consumers
To quantify the environmental23 gains,
this EU-level study proposes to envisage
a 60% BEV uptake (share of new vehicles More importantly, the study also acknowledges that the sooner
sold in the EU) by 2030. Throughout the BEVs enter the market, the greater the environmental and finan-
decade, electric cars will become even cial benefits. Evidence thus calls for an ‘early BEV adoption scenar-
more competitive, and consumers are io’ as the most cost-efficient way to reach the European Green Deal
expected to buy them as supply goes ambition of a 90% of CO2 emissions in the transport sector by 2050
up. BEVs could therefore contribute to compared to 1990.
most of the CO2 emissions reduction
from new cars, as displayed in Figure 14.
CO2 Emissions Reductions (WLTP g/km): 60% BEV uptake
BEV PHEV Fuel Cell ICE Fuel
2020 Growth Growth Growth Efficiency
74
PHEV sales
2020: 5%
125 Fuel Cell
2030: 15%
2020: 0%
2030: 5%
12
BEV sales
2020: 6% 6
7 2030
2030: 60%
26
Figure 14: Breakdown of average WLTP emission reductions (new cars) for 60% uptake scenario by 2030.
To harness these financial, social, and environmental benefits (but also the health ones coming from improved
air quality), the CO2 standards regulation must therefore favour the uptake of BEVs over other powertrains
as soon as possible, set ambitious emission reduction targets and remove all loopholes and mechanisms al-
lowing car manufacturers to artificially reduce their emissions. A supportive regulatory framework at EU and
national levels should accompany this regulation and address consumers’ concerns in terms of charging or
higher purchase price of electrics. It should also provide better information to consumers when buying a car.
23
The study looks at the tailpipe emissions of vehicles, and do not compare the environmental impact of their production or the sourcing of
materials for batteries. Other studies exist and confirm the environmental benefits of electric cars, notably Transport & Environment (March
2021), From dirty oil to clean batteries, https://www.transportenvironment.org/sites/te/files/publications/2021_02_Battery_raw_materials_re-
22 port_final.pdf, (accessed 12 April 2021).The Consumer Voice in Europe
This publication is part of an activity which has received funding under an operating
grant from the European Union’s Consumer Programme (2014-2020)
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