Electric or petrol: what each costs to buy, tax and run in 2026

Electric cars pay €120 motor tax and get up to €5,000 off registration tax, extended to 2028. How running costs compare at 2026 fuel and electricity prices.

The price on the windscreen is only the start. An electric car usually costs more to buy but less to tax and run. How quickly it pays back depends on how far you drive and what you pay for electricity.

Buying: Vehicle Registration Tax

Vehicle Registration Tax (VRT) is built into the price of a new car. For petrol and diesel cars it is a percentage of the value set by CO2 emissions, from 7% to 41%. There is also a charge for nitrogen oxides. For fully electric cars the rate is 7%. Revenue gives relief of up to €5,000 for cars with an open market selling price up to €40,000, falling to nothing at €50,000. So an electric car with a value up to €40,000 pays no VRT.

Budget 2027 extended the electric car relief, due to end in 2026, to the end of 2028. It also increases the VRT rates for cars over 80g/km of CO2 by 1% from 1 January 2027. So most new petrol and diesel cars will cost a little more next year.

Motor tax

For cars registered from 2021, an electric car pays €120 a year. A typical petrol car emitting between 111g and 120g of CO2 per km pays €190; the highest-emitting cars pay €2,400.

Running costs

In September 2026 the Central Statistics Office's national average petrol price was €1.96 a litre, up 14% on a year earlier. For 15,000 km a year, a petrol car using 6 litres per 100 km costs about €1,764 in fuel. An electric car using 17 kWh per 100 km costs, depending on your electricity unit rate:

Your own unit rate is on your electricity bill; if you have a cheaper night rate and charge overnight, use that. Public chargers set their own prices, so check them if you will rely on them.

Adding it up

• yearly savings: fuel plus €70 of motor tax
• against: any difference in purchase price, and finance costs on it
• resale values, which are harder to predict for both

If you drive a company car, the comparison changes again. Electric cars are taxed on a much lower value as a benefit in kind (a taxed perk). See tax on an electric company car.

Work it out

• Electric or petrol: the full cost →
• PCP or HP: check your car finance quotes →
• Company car BIK →

Sources

• Department of Finance: Budget 2027: Tax Policy Changes (checked 25/10/2026)
• Revenue: Private use of employer provided vehicles: exemptions and reductions (checked 25/10/2026)

General information, not tax advice. HeyPenny is not a tax agent.