Motorists could save £960 a year on fuel costs by 2030 if they give up on petrol and switch to electric cars and GDP could jump by £5bn if low-carbon vehicles are embraced. A move away from hydrocarbons could also mean a 40 per cent drop in oil imports by the same year.
According to a Cambridge Econometrics study, the benefits wouldn’t just be financial but environmental too: the switch would also result in a 47 per cent fall in carbon emissions and the UK’s annual cost of running and replacing cars could fall by £5bn to £7bn. Even if electric cars were shunned in favour of low carbon models, the annual saving could be £600 per motorist.
There could be good news for GDP, too:
The net effect of reduced expenditure on petrol and diesel; increased spending on domestically-produced electricity or hydrogen fuel; and increased expenditure on vehicles translates to between £2.4 billion and £5 billion of additional GDP in Britain in 2030.
These results include the effect of an increase in tax rates in other sectors of the economy to compensate for fuel duty revenue losses. Spending more on vehicles, less on fuel imports, and more in other areas of the economy also leads to 7,000-19,000 net additional jobs by 2030.
If low carbon technologies are widely adopted, the emission of harmful pollutants could be greatly reduced, leading to £1bn less in annual spending on respiratory diseases.
Cheaper to run
The report said the lower prices would still save consumers money, even if the initial purchase of a more efficient vehicle would be larger than the current spend on a gas guzzler.
Admittedly, clean vehicles will be more costly to buy at the outset, but the initial investment will be outweighed by energy savings within a few years, leaving households significantly better off. Even if oil prices were to remain at today’s unusually low level, energy-savings would rapidly outweigh the cost of low-carbon technologies.
The report predicts that hybrids, which currently cost around £3,000 more than a normal car, will reduce in price by 2030 due to mass productions and refined manufacturing techniques. By 2013 they report predicts a hybrid will sell for £730 more than a normal car, and save the driver £6,600 in fuel costs.
Electric cars could be even more efficient, costing a customer just £254 a year to run, while the initial cost is expected to reach parity with petrol rivals by 2025.
The main deterrent to driving electric vehicles is so-called range anxiety, where drivers are put off by fears over a lack of charging points. The EU has identified a lack of necessary infrastructure, and announced a £7bn programme to remedy the problem. The number of charging stations is expected to increase from around 700 to over 1.2m by 2020.