PHOTO CAPTION: Nissan LEAF electric car in London borough of Kensington.

What If the World Were Full of Electric Cars?

Chris Spann drives a Nissan LEAF, but also realizes that electric cars aren't the 'savior of motoring.'

Published: 04-Mar-2013

It is often claimed that electric cars will be the saviour of motoring as oil supplies begin to run out and the cost of petrol and diesel becomes more and more prohibitive. So far, electric cars have not caught on due to their limited range before a recharge is required and also to their high initial purchase cost. Recently however, breakthroughs have been made in regard to the range problem and electric cars may soon become a more realistic alternative to the internal combustion engine.

A new investigation by MoneySupermarket has revealed what the effects of making every car in the world battery-powered would be. The investigation shows that although there would undoubtedly be beneficial environmental consequences of switching to electricity from petrol and diesel, the loss of revenue for governments would be substantial. It also reveals that individual savings would be relatively low, particularly in terms of motor insurance.

Environmental consequences
The average car produces around 138 grams of carbon dioxide for every kilometre driven and the global average annual distance driven per car is around 13500 km. There are over 1 billion cars in the world. So the total carbon emissions produced globally by driving cars per annum is currently around 1,900,000,000,000 kilograms. If every car was converted immediately to run on electricity, annual emissions would be reduced by around 950 billion kilograms, or 950 million tonnes, which is around half of current levels.

In the UK alone there are over 31 million cars producing around 59 billion kilograms of carbon every year. This would be reduced to around 30 million kilograms after our hypothetical switch to batteries only.

Globally, 295 billion gallons of petrol also would be saved if every car was electrically powered.

Financial consequences
If every motorist in the UK drove an electric vehicle the government would lose more than £24 billion of tax revenue every year compared to current levels. The vast majority of this loss, around 80%, is due to losses in fuel duty.

The British exchequer would also miss out on around £4.9 billion in road tax charges (green cars being exempt from road tax) as well as approximately £38 million resulting from sales of motor insurance. Green drivers save around 5% on their annual insurance premium, which amounts only to around £24 on average, the average insurance premium being around £478.

Electric cars are also exempt from congestion charges and this would cost the UK government around £130,000,000 every year.

Additional tax revenues of £418,000,000 would arise in the UK from the extra electricity used but this pales into insignificance compared to the revenues lost. Having said that, the investigation did not produce figures for the other benefits of cutting exhaust emissions such as health benefits and EU carbon reduction targets.

Globally, the cost of the extra electricity used amounts to a whopping £271 billion, the UK portion of which is around £8.4 billion. The loss to car insurance companies in terms of revenue would be approximately £24.2 billion globally and around £750 million in the UK alone.

Savings to individual motorists turn out to be fairly insubstantial on the whole with the average driver reducing their yearly motoring costs by just £952. This is made up of savings of £773 in fuel, £24 in insurance and £155 in road tax.

Author Chris Spann drives the new Nissan Leaf and is a writer for MoneySupermarket.com.

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