eVED 2025: The True Cost of EV Ownership Revealed

Rising Fuel Duty: The Game-Changer for EV Total Cost of Ownership

The Autumn 2025 Budget confirmed the first fuel duty increases in 16 years, gradually returning rates to pre-pandemic levels by 2027 and indexing them to inflation beyond 2028.

This matters: every 1p rise adds £9.25 in cost over five years to a petrol vehicle.

Projected by April 2028:

• Fuel duty = 61p/litre

• Petrol 5-year fuel cost: £5,740 → £6,200+

• EV charging = unaffected

Takeaway: ICE vehicles will become steadily more expensive to run. The gap between EVs and petrol/diesel cars is widening fast.

Depreciation & Insurance: The Hidden Cost Drivers

EVs currently depreciate faster up to 60% in 5 years vs 50% for petrol cars. This alone adds £8,500+ in ownership costs.

Insurance? Also higher. EVs cost 25.5% more to insure due to battery repair risk and limited claims data. But there’s good news: premiums are expected to fall 10–20% within five years as the market matures.

✅ Mitigation tip: Leasing or buying used EVs can dramatically reduce the cost impact of depreciation.

The Business Case: PHEVs & EVs Deliver Tax Advantages

For UK businesses, company car tax is where EVs (and especially PHEVs) shine.

BIK Tax Comparison (5-year cost):

• EV: £1,600

• Petrol: £24,000

• Diesel: £28,000

• PHEV: £12,000–£16,000

Businesses can also reclaim eVED and deduct charging expenses. Combined with home or depot charging infrastructure and smart procurement, EV economics improve even further.

Home Charging Is the Dealbreaker for EV Cost Efficiency

If you’re relying on public rapid chargers (£0.79/kWh), EVs become more expensive than diesel.

But install a home or business charger (£0.24/kWh average, with some off peak rates as low as £0.07/kWh), and the savings add up fast.

📉 Break-even point:

• Installation cost: £1,000 (Grants are available)

• Payback: 2–3 years for a 7,400 mile/year driver

• Long-term: Major cost advantage over ICE

💡 Tip: Claim EVHS grants and Business Rates Relief for up to 10 years.

Strategy Over Sticker Price

The headline cost of an EV can be misleading because total cost of ownership is about more than the sticker price. Yes, EVs look more expensive up front, but when you factor in fuel duty, tax, and servicing… the picture changes.

Our Top Strategic Takeaways:

• Leasing beats owning if you’re worried about depreciation.

• PHEVs offer the best tax/eVED mix for high-mileage fleets through 2028.

• Used EVs will be the sweet spot post-2027 as depreciation slows.

• Home/Depot charging is essential to realise EV cost advantages.

Now’s the time to rethink your vehicle strategy.

Ready to model your fleet’s total cost of ownership or plan charging infrastructure?