Electric vs Petrol: The Real Total Cost of Ownership in 2026

When people compare electric and petrol cars, they usually argue about one thing: the cost of fuel per mile. That comparison is real, and electricity at home is cheaper than petrol, but it is a small part of the total cost of owning a car. Depreciation, purchase price, road tax, insurance and servicing all matter, and for many drivers they matter more than fuel.

This guide looks at the full picture for UK drivers in 2026 so you can judge which fuel type actually costs less over the years you keep the car.

The five costs that make up total ownership

Total cost of ownership (TCO) is the sum of everything you spend to buy, run and eventually sell a car. The main components are:

1. Depreciation: the value the car loses while you own it. Usually the largest cost.
2. Fuel or charging: petrol or diesel at the pump, or electricity at home or in public.
3. Road tax (VED): the annual Vehicle Excise Duty.
4. Insurance: which can differ between EVs and petrol cars.
5. Servicing and maintenance: routine work plus repairs.

Comparing only the second item, fuel, is how people reach misleading conclusions. A full comparison weighs all five.

Depreciation: the cost nobody mentions

Depreciation is the difference between what you pay for a car and what you sell it for. On a typical car this dwarfs every other cost. A car bought for £30,000 and sold for £15,000 after a few years has cost £15,000 in depreciation, often far more than total fuel spend over the same period.

Petrol cars have a long, well understood depreciation pattern. EV depreciation has been more volatile: some models have held value well, others fell quickly as newer, longer-range models and cheaper batteries arrived. Because depreciation can easily outweigh fuel savings, you must check the specific models you are comparing rather than assume electric or petrol always holds value better.

Fuel vs charging: where EVs win, and where they do not

This is where electric cars have the clearest advantage, but only if you charge in the right place.

The figures assume a car doing roughly 3.5 miles per kWh; less efficient cars cost more per mile. The key point is that an EV is cheap to run only if you can charge at home, ideally on an overnight tariff. If you rely on public rapid charging, the cost per mile can rival petrol, and the running cost advantage largely disappears.

For a high-mileage driver who charges at home, the fuel saving across a year can be substantial. For a low-mileage driver, the saving is smaller and takes longer to offset a higher purchase price.

Road tax (VED) in 2026

The road tax picture changed in April 2025, when the exemption for electric cars ended. From that point EVs pay Vehicle Excise Duty like other cars.

• A new EV pays a low first-year rate of around £10.
• From year two, an EV pays the standard rate of £200 a year, the same as a typical petrol or diesel car.
• The expensive car supplement applies to EVs costing over £50,000, a higher threshold than the £40,000 that applies to petrol and diesel cars. Where it applies, the premium supplement is £440 a year for years two to six.

So on road tax, EVs and petrol cars are now broadly aligned at the standard rate, with EVs keeping a small edge on the supplement threshold.

Insurance

Insurance can be higher on some electric cars. Reasons include higher repair costs, specialist parts and the value of the battery. The gap varies by model and by driver, and the market continues to evolve. Treat insurance as a cost to check for the specific cars you are comparing rather than assuming it favours either fuel type.

Servicing and maintenance

Electric cars generally win on servicing. With no engine oil, spark plugs, timing belts or conventional exhaust, there are fewer routine items to replace. Regenerative braking reduces wear on brake pads and discs, so they last longer. The result is usually lower mechanical servicing costs over the life of the car.

Petrol cars have more service items: oil and filter changes, spark plugs, belts and exhaust components over time. Tyres are a cost for both, and EVs can wear tyres faster because of their weight and instant torque, which offsets part of the servicing saving.

Putting it together: an illustrative comparison

Consider two cars kept for several years and driven moderate-to-high mileage, with home charging for the EV:

The EV tends to win on fuel and servicing and to be neutral on road tax. It can lose on purchase price and, depending on the model, on depreciation and insurance. Whether the running cost savings recover the higher purchase price depends heavily on your mileage, your charging setup and the specific models.

Who should choose which

• An EV makes most financial sense for a high-mileage driver who can charge at home on a cheap overnight tariff and who chooses a model with reasonable depreciation. The fuel and servicing savings then have time to add up.
• A petrol car can make more sense for a low-mileage driver, someone without home charging, or someone who wants a low purchase price and predictable depreciation.

The bottom line

Do not decide on fuel cost per mile alone. Depreciation is usually the biggest cost, and road tax, insurance and servicing all shift the balance. An electric car can be clearly cheaper to own if you drive a lot and charge at home, but the advantage shrinks for low-mileage drivers and those reliant on public charging. Run the full numbers for the specific cars you are weighing up.

To compare running costs side by side for your mileage, use the car running cost calculator.