Why Leasing Electric Cars Can Be Expensive — and Why It’s Set to Get Cheaper
Electric vehicles (EVs) are widely seen as a cleaner, more sustainable form of transport. Yet many drivers find that leasing an EV still costs more per month than leasing a petrol or diesel car — even though EVs can be cheaper to run over time.
How Battery Prices Have Fallen Over Time
Battery cost is the single biggest influence on the price of an electric car. Over the past decade, costs have dropped dramatically — but they’re still high enough to affect lease pricing.
Approx EV Battery Price (£ per kWh)
Year | Price
------------------------
2011 | █████████████ £960
2013 | ████████ £640
2015 | ████ £280
2017 | ███ £200
2019 | ██ £145
2021 | ██ £120
2023 | █ £92
2025 | █ £72
2026 | █ £64
This shows that battery prices have fallen by roughly 93% since 2011, and analysts forecast further declines toward around £64 per kWh by 2026. Lower battery costs reduce vehicle prices — which should lead to cheaper leasing costs over time.
Why EV Leases Are Often More Expensive Today
1. Batteries Still Cost a Lot
Even with falling prices, batteries remain a major part of an EV’s manufacturing cost. Leasing prices factor in the expected depreciation of the battery over time, which keeps monthly payments higher than many drivers expect.
2. Leasing Companies Overestimate EV Depreciation
Research by Transport & Environment suggests that in Europe, EV leases are around 57% more expensive on average than equivalent petrol cars — even when real-world resale data does not fully justify the difference.
Example:
Peugeot e-208 (electric): - £509 per month
Peugeot 208 (petrol): - £329 per month
This gap suggests leasing companies still price in extra caution when valuing electric cars.
Monthly Lease Cost Comparison
Monthly Lease Cost (Example)
-----------------------------
Petrol | ██████████ £330
Electric | █████████████████ £510
These figures are illustrative and based on real reported deals. Actual lease costs vary by mileage, contract length, credit profile, and market conditions.
Why Electric Car Leasing Is Likely to Get Cheaper
1. Battery Prices Will Continue to Fall
Industry analysts forecast that battery prices could drop to around £64 per kWh by 2026, compared with roughly £92 per kWh in 2023. This represents a major cost reduction and is expected to translate into lower vehicle prices — and eventually cheaper lease payments.
2. The Used EV Market Is Maturing
As more electric cars complete their first lease cycles, the second-hand EV market is growing. This gives leasing companies better data on resale values, reducing uncertainty and financial risk — which should lower lease prices.
3. Increased Competition
More manufacturers are entering the EV market with a wider range of models, including lower-cost options. Increased competition typically leads to:
Better lease incentives
Lower upfront costs
More aggressive pricing
4. Government Incentives and Policy Support
UK government grants, tax benefits, and salary-sacrifice schemes continue to make electric cars more attractive. While these don’t always immediately reduce lease prices, they support long-term affordability and market growth.
Real-World Examples
Tesla Model 3
Tesla has periodically reduced leasing prices in response to market conditions. In some UK promotions, monthly lease prices for a Model 3 have dropped to around £250 per month, showing how quickly prices can shift as competition and inventory increase.
Used Electric Car Leasing
Used EV leasing is becoming increasingly popular:
A used Škoda Enyaq has been advertised at around £292 per month,
Compared to £550+ per month for a new equivalent through some salary-sacrifice schemes.
This highlights how a growing used EV market can significantly reduce leasing costs.
Recent trends indicate that in the future, prices of leasing electric vehicles will continue to fall, due to increased competition, and the expansion of battery manufacturing around the world. Paired with expanding legislation cross the UK and Europe, eventually making electric vehicles the only vehicles sold, alongside more adoption of EVs through more infrastructure.