Are electric cars becoming cheaper to buy?

Recent cuts to the Smart #1 and Vauxhall Corsa leave us wondering are EV's more affordable

Honda e:Ny1
Honda e:Ny1 Tesla Model 3 Renault Megane E-Tech Vauxhall Range Vauxhall Corsa Yes Edition Dacia Spring Smart #1

Read Time: 6 min (Updated March 2024)

Are electric cars becoming cheaper? In a word, YES! The automotive EV industry is experiencing a pivotal shift, with recent trends indicating that EVs are not just decreasing in price but are undergoing significant reductions, such as Renault and Tesla, to bring their pricing more in-line with ICE (internal combustion engine) models. This trend is noteworthy because it signals a potential turning point in the market dynamics of electric vehicles.

Vauxhall set a significant benchmark at the end of February by announcing the Corsa Yes edition, lowering its entry price by £5,550 to become the most affordable EV available at the time. This move is indicative of the growing competition and shifting strategies among automakers to capture the attention of cost-conscious consumers looking to transition to electric mobility.

Dacia's announcement that the Spring model is coming to the UK further shakes up the market. Having already sold over 140,000 units across Europe since its introduction in 2021, the Dacia Spring's anticipated launch price of just £17,000 positions it as a highly competitive option. This price point is particularly noteworthy as it undercuts the Corsa Yes by over £8,000, making the Spring the new benchmark for affordability in the UK's EV market.

Additionally, Smart's strategic decision at the end of January to reduce the price of their #1 model by £5,000 through the introduction of a new entry-level trim exemplifies the ongoing trend of price competition. This move is aimed at attracting new buyers to the electric market by making it financially easier to adopt EV technology.

2024 Vauxhall Corsa Yes edition

Lets look into some of the reasons why.

Technological Advancements: As technology evolves, the cost of producing EVs is decreasing. This is particularly true for batteries, which are a major component of the cost. As battery technology improves and production scales up, manufacturers can produce EVs more cost-effectively.

Economies of Scale: As the production volume of EVs increases, manufacturers benefit from economies of scale. This allows them to spread the cost of production over a larger number of vehicles, reducing the cost per unit.

Consumer Demand: As public awareness and acceptance of EVs grow, there’s an increasing demand for more affordable electric vehicles. Manufacturers are responding to this market demand by offering more competitively priced models.

Increased Competition: With more automakers entering the EV market, there's heightened competition. This competitive landscape prompts manufacturers to lower prices to attract more customers and gain a larger market share.

Honda e:Ny1

Honda's latest promotion for the e:Ny1 electric vehicle presents an attractive offer for potential buyers, aligning the price point with that of the HR-V Hybrid for a limited period. This deal, valid until January 31, 2024, includes an impressive £8,000 deposit contribution from Honda, effectively reducing the on-the-road (OTR) price of the e:Ny1 to £36,995.

To further enhance the value proposition, Honda is coupling this offer with competitive finance rates and an inclusive five-year care package. This comprehensive package encompasses a service plan, warranty, and roadside assistance, adding substantial long-term value and peace of mind for buyers.

Performance-wise, the Honda e:Ny1 stands out with its considerable range of up to 256 miles according to the Worldwide Harmonised Light Vehicle Test Procedure (WLTP). For convenience, the vehicle supports rapid charging capabilities, allowing it to be charged from 10% to 80% in approximately 45 minutes when using a 100kW charger.

In terms of size and utility, the e:Ny1 positions itself as a family-friendly SUV, comparable in size and functionality to vehicles like the Lexus LBX or Volvo EX30. This makes it an appealing option for those seeking a spacious and practical electric vehicle with the reliability and quality associated with the Honda brand.

Tesla Model 3

Tesla's Model 3, one of the most recognisable electric vehicles on the market, has seen significant price reductions in 2023, with the latest adjustment bringing the cost down by £3,000 to a new price of £39,995. This revised pricing applies to the refreshed model set for delivery in January 2024, marking a notable update since its debut in 2017.

The Model 3's most recent updates are substantial, focusing on aerodynamics and aesthetics. Key enhancements include a smoother front bumper designed to maximize aerodynamic efficiency and updated, thinner LED headlights. At the rear, the vehicle features brighter, more seamlessly integrated lights into the boot, adding to its sleek design. Additionally, Tesla has introduced two new color options, Ultra Red and Stealth Grey, broadening the aesthetic choices for buyers.

Performance-wise, the standard Model 3 is priced from £39,990 and offers a range of 318 miles on a single charge. It also boasts a quick acceleration, going from 0-60mph in just 5.8 seconds. For those seeking extended range and performance, the Long Range model is available. This variant includes a larger battery enabling a significant range of 390 miles and a more powerful motor that shortens the 0-60mph acceleration time to 4.2 seconds, priced from £49,990.

In terms of size, the Tesla Model 3 competes closely with the BMW i4 and Polestar 2, making it a compelling option for those considering a premium electric sedan with a blend of range, performance, and technological features. The price reduction and model updates are likely to enhance its appeal in the competitive electric vehicle market.

Renault Megane E-Tech Electric

In the last week, the Renault Mégane E-Tech Electric has become a more accessible option in the electric vehicle market, thanks to a significant price reduction across its entire range. The starting price for the entry-level model is now £34,495, which is a substantial £2,500 decrease from its previous starting price of £36,995. This adjustment makes the Mégane E-Tech Electric more competitive in terms of pricing.

The discounts extend to higher trim levels as well, offering even greater savings. The mid-range Techno+ trim is now available from £36,495, showing a decrease of £3,000. For those looking at the top-tier option, the Iconic model is now priced at £38,495, reflecting a substantial reduction of £3,500.

These pricing changes position the Renault Mégane E-Tech Electric more favourably against its mid-sized rivals in the electric vehicle segment. It now undercuts competitors such as the Kia Niro EV, priced at £37,295, and the Volkswagen ID 3, which starts at £37,225.

In terms of size, the Renault Mégane E-Tech Electric is comparable to models like the Hyundai Bayon and the Volkswagen ID.3, offering a similar footprint and practicality. This combination of competitive pricing and size similarity makes the Mégane E-Tech Electric a compelling choice for consumers looking for a mid-sized electric vehicle that balances affordability with ample space and modern features.

Vauxhall Models

Vauxhall is taking notable steps to make electric vehicle (EV) ownership more feasible and financially accessible for a broader range of consumers. A key aspect of this initiative is the reduction of the Annual Percentage Rate (APR) on finance deals to 5.9%, coupled with substantial deposit contributions of up to £7,000. This strategic move is part of Vauxhall's updated Personal Contract Purchase (PCP) offers, which are specifically tailored to lower the barriers to switching to electric vehicles.

These attractive finance offers are available on a range of Vauxhall's electric models, including the All-New Astra Electric, New Corsa Electric, and Mokka Electric. To further enhance affordability and accessibility, Vauxhall has introduced the new Design trim level. This addition is aimed at lowering the entry point to EV ownership, making electric cars more attainable for a wider audience.

These financial measures, when combined with the inherent savings on running costs associated with electric vehicles, lead to a scenario where the total monthly cost of owning an EV is comparable to that of petrol models. This cost parity is a significant milestone in EV adoption, as it addresses one of the primary concerns potential buyers have about the higher purchase price of electric vehicles.

By making electric vehicles more financially accessible and creating parity in monthly costs with petrol models, Vauxhall is not only expanding its customer base but also contributing to the broader shift towards sustainable and environmentally friendly transportation.