After the Tax Cut: More Expensive to Drive on Electricity than Gasoline

The dramatic reduction in tax on gasoline and diesel has changed the equation for many car owners. For those who rely on public charging stations, it is now cheaper to drive a gasoline car than an electric car.

According to calculations made by TT together with the consumer organization Riksförbundet M Sverige, it costs about nine kronor per mile to drive a gasoline car that consumes 0.6 liters per mile, based on a gasoline price of around fifteen kronor per liter. For an electric car charged at public fast chargers, the cost per mile is instead around 10.80 kronor, based on a charging price of about six kronor per kilowatt hour.

At the same time, a clear advantage remains for electric car owners who can charge at home. With an electricity price of about two kronor per kilowatt hour, including taxes and fees, the running cost is still significantly lower than for a comparable gasoline car.

The new price situation therefore primarily affects households that live in apartments or, for other reasons, lack the opportunity to install their own charger.

The change is a direct result of the Tidö government’s tax cut on gasoline and diesel which came into effect on 1 July. The government, with support from the Sweden Democrats, has during the term taken several measures to push down fuel prices.

Among the most important reforms is a dramatic reduction in the blending mandate, which has reduced the inclusion of biofuels and thereby lowered the pump price. In addition, energy and carbon dioxide taxes on gasoline and diesel have been reduced.

The government has justified the measures by saying that households and businesses should have lower transport costs and that Sweden should not have significantly higher fuel prices than comparable countries.

Debate About Electrification

The new figures are expected to fuel further debate about the electrification of the vehicle fleet. Proponents of electric cars point out that the vast majority charge at home and therefore still have significantly lower running costs than gasoline cars.

Critics, on the other hand, argue that the economic equation deteriorates significantly for those who rely on public charging infrastructure, and that this may slow down the transition.

That public charging has become more expensive than gasoline is not an entirely new phenomenon either. Already, analyses have shown that high prices at fast charging stations—combined with falling gasoline prices—have, at times, made fossil cars cheaper to drive for those without the possibility to charge at home.