Low and middle-income households in the UK may be forced into another cycle of fossil fuel cars if the affordability of EV alternatives does not change rapidly before 2030, a new study has found.
NerdWallet compared the cost and depreciation of popular hatchbacks to find out which are affordable for the average UK driver. The research is based on an average car finance payment of £194.80 per month and payments ranging from three to seven years.
The study compared two fossil-fueled cars (Fiat 500 and Ford Fiesta) and two electric (Renault Zoe and Nissan LEAF). These were each split into top-end and low-end models before annual depreciation was calculated – resulting in 24 cars of different values for each fuel type for comparison.
- For the average driver, just one of the EV hatchbacks is affordable on a three-year finance agreement.
- On a five-year finance agreement half of the fossil-fuel hatchbacks are affordable, but only four of 24 EV models.
- On a seven-year finance agreement, just over one third (37%) of the EV models listed are affordable, compared to 83% of fossil-fuel hatchbacks.
NerdWallet’s director of operations John Ellmore said: “These findings suggest a worrying trend for the average UK motorist who is currently being priced out of purchasing an electric vehicle by a lack of options on the market.
“At current rates, a new EV hatchback model launched in 2021 would not be affordable for the average motorist until 2026 – by which time many drivers may have committed to years of finance payments on a fossil fuel model instead – further stalling the transition towards a green future.”