How long will it take European drivers to save for an electric vehicle?

How long will it take European drivers to save for an electric vehicle based on the average cost of an EV compared to the average wage?

Electric vehicles are an incredibly popular mode of transport, particularly with fuel costs reaching such steep high prices – and even some record highs towards the end of last year.

Considering how much more cost-effective EVs are, and with other benefits including government funding, free parking for UK motorists, and even an increased resale value – it’s little surprise they are so popular.

Volkswagen have seen their worldwide EV deliveries grow by nearly 24% in the last year.

Similarly, manufacturers such as Volkswagen have seen their worldwide EV deliveries grow by nearly 24% in the last year.

However, with the cost of electric car rapid charging rising by 58% in eight months and the initial cost of purchase for an EV an obstacle that many motorists are facing, Hippo Leasing analysed how long it will take UK drivers to buy an EV, based on the average cost of an EV compared to the average wage. The calculations are based on people saving 10% of their annual wage towards an EV.

They’ve done the same for an additional 24 countries in Europe to see how the UK fares against its neighbours.

Switzerland is the fastest country to save for an electric vehicle

According to the study, motorists in Switzerland will be saving for an EV for just under seven years or 80 monthly wages. In 2022, it was estimated that one in four cars purchased in Switzerland were either electric or plug-in hybrid, suggesting that they could lead the charge for electricity in the future.

*The ‘average EV cost’ is calculated using the prices of the five most popular EVs in Europe in each country

**Average wage after tax and deductions.

***Based on saving 10% of annual income towards an EV each year.

**** Google currency converter 13:13pm 18/11/22 (1 Euro = 0.8706 GBP)

In second place is Luxembourg, with residents taking just under nine years (8.9) or 107 monthly wages to purchase an electric car. In Luxembourg, electric vehicle registrations jumped from 10.5% in 2021 to 15.2% in 2022.

This is a similar story in Norway, where saving for an EV would take nine years.

Switzerland, Luxembourg and Norway wages are significantly larger than the average cost of the best-selling electric cars. In Switzerland, this is by as much as €21,984 (£19,139). So, if they were to save more than 10% of their annual wage, they could purchase an EV much sooner.

In comparison, UK motorists could be waiting a lot longer.

How long will it take UK drivers to save for an electric vehicle?

For anyone in the UK hoping to get behind the wheel of an EV before the planned ban on the sale of new petrol and diesel cars (in 2030), you best start saving now. It will take UK drivers 13 years (or 158 months) to save for an electric vehicle, meaning you can expect to be sat in your vehicle by 2035 if you were to start saving now.

The average price of the top five EVs in the UK is £38,519, compared to an average wage of £29,106.

This makes the UK the eighth fastest country to save for an EV. Countries ahead of the UK, including Ireland and the Netherlands, take 11 and 12 years to save.

On the other hand, some countries could take more than 30 years to save for an electric vehicle.

Motorists in Croatia will need to save for an electric vehicle for 36 years

Hippo Leasing’s research suggests that Croatian drivers will save the longest out of all 25 countries. It will take 36 years (or 440 months) to save for an electric vehicle, with the top five EVs priced at £39,362 and the annual wage at £10,968.

*The ‘average EV cost’ is calculated using the prices of the five most popular EVs in Europe in each country

**Average wage after tax and deductions.

***Based on saving 10% of annual income towards an EV each year.

**** Google currency converter 13:13pm 18/11/22 (1 Euro = 0.8706 GBP)

People in Greece can also expect to save for 34 years for an electric car if they were to save 10% of their annual wage (£10,970). Similarly, Slovakia takes third for the longest place to save for an electric vehicle, with residents expecting to put money away for 32 years.

However, it is important to note that these countries have experienced financially challenging times, which could explain the number of years to save.

In 20 countries, the cost of purchasing an EV exceeded the average yearly wage

While European residents continue to purchase EVs as sales boom, the analysis shows that for 20 of the 25 European countries, the cost of a new EV is more than the annual wage. Significantly more in some countries.

In Croatia, the difference between the price of the top five EVs and the average annual wage is a staggering £28,564. In the UK, the average price of the best-selling electric vehicles is £9,413 more than the average yearly salary.

Tom Preston, Managing Director at Hippo Leasing, said: “As our research shows, owning an EV is financially difficult for many people across Europe, as their own finances are eclipsed by the prices of electric cars.

“Leasing an electric car is helping many more people make the switch to an EV, as they don’t need to save for the full value of their chosen car. Instead, they can make an initial payment followed by regular monthly payments.

“Combined with the various incentives on offer to encourage the switch to driving electric, the cost of owning an EV can be reduced,” he concluded.

Contributed by Hippo Leasing