For years, one of the biggest arguments against switching to an electric car was simple: EVs cost more.
That is becoming a much harder argument to make.
Falling lease prices, lower running costs and the growth of salary sacrifice schemes mean some electric cars can now cost less per month than comparable petrol models. Recent analysis from Octopus Electric Vehicles suggests that, on a monthly lease basis, electric cars are increasingly reaching — and in some cases beating — petrol-car price parity.
But headline lease prices only tell part of the story.
For anyone deciding between petrol and electric in 2026, the more useful question is no longer simply which car costs less to buy? It is which car costs less to own and run each month?
- Choose £400 home charging credit, £400 off a home charger or £400 Electroverse credit
- Compatible with Octopus Energy's smart EV tariffs
- Approved Used vehicles available
- Early termination protection built into every lease
EV purchase prices don’t tell the whole story
Electric cars have traditionally carried higher list prices because of the cost of their batteries. While that gap has narrowed considerably, looking at the manufacturer’s recommended retail price can still make an EV appear expensive.
Most drivers, however, don’t buy a new car outright.
PCP, leasing and salary sacrifice all turn the cost of a car into a monthly expense. That changes the calculation considerably, particularly as used EV values and manufacturer incentives have helped make new electric-car leasing increasingly competitive.
This is why comparisons between an EV’s £40,000 list price and a petrol car costing £35,000 can be misleading. If the EV is available for a similar — or lower — monthly payment, the £5,000 difference may have little relevance to the driver’s actual finances.
Then there is the cost of fuel
This remains one of the strongest financial arguments for an electric car, although it comes with an important caveat.
Drivers who can charge at home and make use of an EV-specific overnight electricity tariff can potentially cover their everyday mileage remarkably cheaply.
A petrol car achieving 40 or 50mpg simply can’t replicate the cost per mile available from cheap overnight electricity.
The picture is less attractive if you rely heavily on public rapid charging. Public charging prices vary significantly, and regular use of the most expensive rapid chargers can erode much of an EV’s running-cost advantage.
Where and how you charge therefore matters almost as much as which EV you choose.
Servicing can tip the calculation further
Electric cars have fewer moving components in their powertrains than combustion-engine cars. There are no oil changes, spark plugs or exhaust systems, for example.
That doesn’t mean an EV is maintenance-free. Tyres, brakes, suspension, air-conditioning and other components still require attention, and repair costs can vary considerably between models.
Nevertheless, routine servicing can be another area where an EV has an advantage over a comparable petrol car.
Don’t assume every EV cost is lower
Are Electric Cars Now Cheaper Than Petrol Cars? The Real Monthly Cost in 2026
For years, one of the biggest barriers to switching to an electric car was the price. EVs might be cheaper to charge and maintain, but you often had to pay considerably more to get one in the first place.
In 2026, that argument is becoming much less convincing.
New research from Octopus Electric Vehicles suggests electric cars have now reached a significant milestone: on a monthly lease basis, the typical EV can actually be cheaper than the typical petrol car.
Octopus EV found a median monthly lease price of £369 for electric cars, compared with £409 for petrol cars. Based on its comparison, that would equate to more than £1,600 in lower lease payments over a typical agreement – before charging, servicing and other running costs are considered.
So, has the point finally arrived where choosing electric isn’t just the greener option, but the cheaper one too?
EV prices are changing quickly
The upfront price of an electric car can still look expensive.
Batteries add considerably to manufacturing costs and there are plenty of EVs with list prices above their petrol equivalents. But list price is becoming a less useful measure of what drivers actually pay.
Many new cars are now obtained through leasing, PCP or workplace salary sacrifice, making the monthly cost more relevant than the manufacturer’s headline price.
This is where the gap is changing.
Octopus Electric Vehicles compared EV leasing prices with petrol alternatives and found several cases where electric had become cheaper.
Its examples included the electric Dacia Spring at around £199 per month compared with approximately £225 for a petrol Dacia Sandero. The Vauxhall Frontera EV was around £279 per month compared with roughly £303 for the hybrid version, while the electric Citroën ë-C3 was also cheaper than the petrol C3 in its comparison.
These aren’t premium EVs being compared with budget petrol cars. They demonstrate how competition among manufacturers is starting to change the lower end of the EV market too.
The monthly payment is only the beginning
An EV being cheaper to lease is significant because historically the running-cost savings were needed to compensate for a higher initial cost.
If the electric car starts off cheaper, those running-cost advantages become additional potential savings.
Charging is the obvious example.
Drivers with off-street parking can take advantage of electricity tariffs offering cheaper power at certain times of the day or night. For somebody completing most of their charging at home, the cost per mile can be substantially lower than fuelling a comparable petrol car.
The exact saving depends on your vehicle, mileage, electricity tariff and petrol prices, so there isn’t a single figure that applies to everybody.
Where you charge is particularly important.
Drivers regularly using expensive rapid chargers won’t necessarily experience anything like the savings available to someone who plugs in on their driveway overnight.
Maintenance can favour electric too
There are also mechanical differences.
An electric motor has fewer moving parts than a combustion engine. EV drivers don’t need engine oil changes, spark plugs or replacement exhaust systems, for example.
Electric cars aren’t maintenance-free – tyres, suspension, brakes, air-conditioning and numerous other components still need attention – but routine maintenance can be simpler.
Again, the important point is that this saving used to be part of the calculation required to justify paying more for the EV.
If EV and petrol monthly prices are reaching parity, maintenance becomes another area where electric can potentially pull ahead.
Salary sacrifice can change the numbers again
For employees whose workplace offers an electric car salary sacrifice scheme, comparing a conventional EV lease with a petrol lease doesn’t necessarily show the full potential saving.
Salary sacrifice allows an employee to give up part of their gross salary in return for an electric car.
Because the deduction is made before Income Tax and National Insurance, this can reduce the effective cost of the vehicle. The employee does have to pay Benefit-in-Kind tax, but EVs continue to receive favourable BiK treatment compared with higher-emission company cars.
One provider worth considering is Octopus Electric Vehicles, which says employees can save up to 40% on the cost of an EV through salary sacrifice, although the actual saving will depend on individual circumstances.
Its package also goes beyond simply supplying the car.
Octopus EV salary sacrifice includes servicing, maintenance, replacement tyres and breakdown cover, with insurance also included where the employer has selected this option.
Drivers currently get a choice of £400 off an Octopus home charger, £400 in home-charging credit or £400 of public-charging credit through Electroverse.
That makes it important to compare the whole package rather than simply putting two headline monthly lease prices next to one another.
- Choose £400 home charging credit, £400 off a home charger or £400 Electroverse credit
- Compatible with Octopus Energy's smart EV tariffs
- Approved Used vehicles available
- Early termination protection built into every lease
Why the Octopus package is interesting
The connection between Octopus Electric Vehicles and the wider Octopus Energy business is particularly relevant for EV drivers.
Buying or leasing an EV is only one part of switching from petrol or diesel. You also need to think about how and where you are going to charge it.
Octopus EV customers who are also eligible Octopus Energy customers can access its Intelligent Octopus Go – EV Saver tariff, which offers an additional saving on the standard Intelligent Octopus Go off-peak rate.
Those who can’t install a charger aren’t necessarily excluded from the benefits either. Octopus’s option of £400 public-charging credit through Electroverse is specifically useful for drivers who expect to do more charging away from home.
Bringing the car, charging and energy together won’t necessarily make Octopus the cheapest option for every driver, but it does make the overall cost of switching easier to assess.
Are there still circumstances where petrol could be cheaper?
Absolutely.
Electric doesn’t automatically mean cheaper.
Someone who buys an inexpensive used petrol car outright and covers relatively few miles could spend considerably less than someone leasing a brand-new EV.
Insurance also needs to be considered. Premiums vary enormously according to the car and driver, and some EVs can be relatively expensive to insure.
Public charging can make a big difference too. If you don’t have access to cheap home charging and regularly depend on high-powered rapid chargers, your energy costs could be substantially higher.
Depreciation is another consideration for drivers buying rather than leasing. Used EV values have changed rapidly as the market has matured, which makes future resale values difficult to predict.
The fairest comparison is therefore based on your own circumstances.
The bigger change is price parity
Despite those caveats, reaching parity on the lease itself is an important moment for electric cars.
Octopus Electric Vehicles reported an 89% increase in new EV leasing orders in March 2026 compared with February, suggesting that affordability and changing attitudes are already encouraging more drivers to make the switch.
There is also much more choice than there was a few years ago. Drivers are no longer choosing between a small number of relatively expensive EVs. There are electric hatchbacks, SUVs, saloons and family cars across an increasingly broad range of monthly budgets.
That competition matters.
More manufacturers competing for EV customers should put further pressure on prices while improving specifications, battery ranges and charging speeds.
So, should your next car be electric?
Price is no longer a good reason to automatically rule an EV out.
If you can charge cheaply at home, drive enough miles to benefit from the lower energy costs and find a competitive lease, an electric car can already make financial sense.
If your employer offers EV salary sacrifice, the calculation can become more attractive still.
That doesn’t mean everybody will save money by switching. Compare the actual car, insurance, charging arrangements and finance or lease package available to you.
But something important has changed.
For years, the financial case for an EV was essentially: pay more now and potentially save money later.
As electric lease prices fall, that equation is being rewritten.
Increasingly, the EV can be competitive from the first monthly payment – and the lower running costs come afterwards.
John is the Editor and Spokesperson for Electric Car Guide.
With over 20 years of writing experience, he has written for titles such as City AM, FE News and NerdWallet.com, covering various automotive and personal finance topics.
John’s market commentary has been covered by the likes of The Express, The Independent, Yahoo Finance and The Evening Standard.
