How long will it take for drivers in Europe to save up for an EV?

Hippo Leasing investigates how long, on average, it will take drivers in different European countries to afford an EV. With Switzerland and the Scandinavian region leading the way, here’s what we’ve found…

On average, how long will it take drivers in different European countries to afford an EV?

The affordable running costs of an electric vehicle (EV) have made them an incredibly popular choice among motorists, especially when considering how much more cost effective they are to fuel and their no-road-tax benefits (at least until 2025).

However, one barrier motorists in the UK are facing is their initial cost of purchase. In our latest study, we’ve crunched the numbers to reveal how long it will take people in the UK to buy an EV, based on the average cost of an EV against the country’s average wage.

We’ve done the same for 24 other countries in Europe, so we can see how the UK compares to our European neighbours.

For our study, we’ve used the 10% Savings Rule, a guideline that encourages people to set aside 10% of their income when they’re saving for a major purchase, such as a car. Our calculations, therefore, are based on people saving 10% of their yearly wage towards an EV. 

It takes people in the UK just over 13 years to save for an EV

In the UK, saving for a brand-new EV will take just over 13 years, or the best part of 159 months.

Anyone who starts saving now can expect to be sat in their new electric vehicle by 2035 – five years after the planned ban on the sale of new petrol and diesel cars.

Making the top 10, the UK takes eighth place overall as one of the countries where you can save for an EV the fastest. This is despite the average cost of an EV being €10,812 (£9,413) more than country’s average wage of €33,432 (£29,106).

Switzerland, Luxembourg and Norway lead the way for the fastest to save for an EV

For residents in Switzerland, it will take less than seven years to save for a new EV, or 80 monthly wages. It’s a similar story in Luxembourg and Norway, where saving for an electric car will take 8.9 and nine years respectively.

We’ve based our calculations on saving 10% of a typical wage. However, in all three of these countries, wages far surpass the average cost of the best-selling EVs, by as much as €21,984 (£19,139) in Switzerland. Should they want to up the percentage they’re saving, residents in these countries could get behind the wheel even sooner.

Country	Average Price of Top 5 EVs*	Average Yearly Wage**	No. of Months to Save***	No. of Years to Save
Switzerland	€43,932 (£38,247)	€65,916 (£57,386)	80.0	6.7
Luxembourg	€38,244 (£33,295)	€42,876 (£37,328)	107.0	8.9
Norway	€40,031 (£34,851)	€44,652 (£38,874)	107.6	9.0
Iceland	€38,502 (£33,520)	€41,796 (£36,388)	110.5	9.2
Denmark	€46,139 (£40,169)	€46,800 (£40,744)	118.3	9.9
Ireland	€40,425 (£35,194)	€35,076 (£30,537)	138.3	11.5
Netherlands	€41,303 (£35,958)	€34,008 (£29,607)	145.7	12.1
United Kingdom	€44,244 (£38,519)	€33,432 (£29,106)	158.8	13.2
Germany	€42,004 (£36,569)	€31,692 (£27,591)	159.0	13.3
Austria	€42,664 (£37,143)	€31,596 (£27,507)	162.0	13.5

Which European country will be saving the longest for their EV?

According to our research, people in Croatia, Greece and Slovakia will be saving the longest for their next EV. These countries have all experienced financially challenging times, which could explain their longer saving estimates.

Country	Average Price of Top 5 EVs*	Average Yearly Wage**	No. of Months to Save***	No. of Years to Save
Croatia	€45,098 (£39,262)	€12,288 (£10,698)	440.4	36.7
Greece	€43,521 (£37,889)	€12,600 (£10,970)	414.5	34.5
Slovakia	€38,570 (£33,579)	€11,736 (£10,217)	394.4	32.9
Poland	€39,920 (£34,754)	€12,168 (£10,593)	393.7	32.8
Lithuania	€38,856 (£33,828)	€13,392 (£11,659)	348.2	29.0
Portugal	€39,923 (£34,757)	€13,944 (£12,140)	343.6	28.6
Estonia	€40,865 (£35,577)	€17,028 (£14,825)	288.0	24.0
Italy	€40,194 (£34,993)	€20,880 (£18,178)	231.0	19.3
Spain	€42,013 (£36,577)	€22,416 (£19,515)	224.9	18.7
Romania	€43,822 (£38,151)	€26,784 (£23,318)	196.3	16.4

EV costs are higher than annual wages in 20 of the 25 European countries analysed

According to our analysis, the cost of a new EV is higher than the country’s average yearly wage in a staggering 20 out of 25 European countries.

Differences range from €5,349 in Ireland to EVs costing €32,810 more than the average Croatian yearly pay.

Commenting on the data, Tom Preston, Managing Director at Hippo Motor Group said: “As our research shows, owning an EV is financially difficult for many people across Europe, as their own finances are eclipsed by the prices of electric cars.

“Leasing an electric car is helping many more people make the switch to an EV, as they don’t need to save for the full value of their chosen car. Instead, they can make an initial payment followed by regular monthly payments.

“Combined with the various incentives on offer to encourage the switch to driving electric, the cost of owning an EV can be reduced,” he added.

Methodology: Countries were chosen based on the European countries where the manufacturers of the top five best-selling EVs in Europe operate in.

The top five best-selling EVs in Europe are based on Q2 2022 sales as per the Global Passenger Electric Vehicle Model Sales Tracker: Q1 2018 – Q2 2022, reported here: https://www.counterpointresearch.com/european-ev-market-grew-16-q2-2022-led-mercedes/.

Average wage is calculated after tax and deductions. Data collected from Wikipedia’s net average monthly salary map. 

Model prices were collected from the official manufacturer website for each country. Where currencies differed from the Euro, prices were converted to Euros. Prices do not take into consideration any discounts or incentives which may be on offer within the country.

Electricity prices are based on price per kWh in Euros. Data sourced from Europa.eu, with external sources used for UK and Switzerland data, which was missing. Battery size is based on a basic model, taken from EV Database or the official manufacturer site.

Calculations give an indication of the cost of running an EV but may, in reality, be affected by other external factors. Data collected on 16th November 2022.