TL;DR:
- Over 5 years at 10,000 miles/year, a Tesla Model 3 costs ~£2,140 less than a comparable BMW 320i — driven almost entirely by fuel savings
- Break-even mileage is ~6,900 miles/year; below that, higher insurance and depreciation can outweigh fuel savings
- Company car drivers see a completely different result: 2% vs. 30% BIK saves £21,280 over 5 years
Most EV cost of ownership comparisons stop at the sticker price. That misses 80% of the story. The real number is the 5-year total cost of ownership (TCO) — every pound spent from purchase to disposal. This comparison uses a 2026 Tesla Model 3 Standard Range versus a 2026 BMW 320i, both at ~£38,000. Same price bracket, very different cost structures.
Purchase Price and Incentives
Sticker prices match: £38,000 each. For UK private buyers, no plug-in grant applies — it was discontinued in 2022. Effective difference: £0.
Company car buyers see an immediate divergence, though. The Tesla Model 3 BIK rate is just 2% of list price per year. The BMW 320i sits at 30% (based on 142g/km CO2). At a 40% income tax rate, that’s £304/year (Tesla) versus £4,560/year (BMW). Over 5 years: a £21,280 difference. For company car drivers the financial case for EVs is decided before you turn the key.
Home Charger Installation
Every EV owner needs a home charging point. The BMW does not.
In the UK, a 7kW home wallbox costs £800–£1,200 installed. At 7kW, the Model 3 charges from near-empty overnight in around 9 hours. 5-year EV cost: +£1,000 (one-off, Year 1). Not optional — a home charger is the foundation of the entire EV economic case.
Fuel vs. Charging
On Octopus Go’s off-peak rate of around 7.5p/kWh, 10,000 miles/year in the Tesla Model 3 costs roughly £187/year — about 2p per mile.
The same 10,000 miles in the BMW 320i at 45mpg and 150p/litre comes to around £1,513/year — about 15p per mile.
Mix in 20% public charging at rapid network rates of 70–85p/kWh and the EV’s annual total rises to around £550/year. Still saving £963/year versus petrol.
5-year totals (20% public charging): Tesla £2,750 vs. BMW £7,565 — EV fuel saving: £4,815.
Public rapid charging at 80p/kWh works out around 20p/mile — more expensive than petrol. Home charging is what makes or breaks the EV financial case.
Insurance
EV insurance runs 10–20% higher than equivalent petrol vehicles in 2026, driven by higher repair costs and fewer specialist repairers.
For a 35-year-old with a clean licence and comprehensive cover: Tesla Model 3 around £1,075/year, BMW 320i around £950/year.
5-year totals: £5,375 vs. £4,750 — £625 more for the EV. This gap is narrowing as insurers build EV-specific data. Worth shopping around every year.
Maintenance
EVs skip oil changes (saving ~£150/year), spark plugs, air filters, and fuel filters. Regenerative braking extends pad and disc life 2–3 times compared to a conventional car — worth around £200 over 5 years.
The downside: the Model 3 weighs around 1,800kg versus the 320i’s 1,540kg, so it eats through tyres 15–30% faster. Add £300–£400 over 5 years.
5-year maintenance totals: Tesla £2,450 vs. BMW £3,300 — EV maintenance saving: £850. Real, but smaller than many EV advocates suggest.
Depreciation
Depreciation is the single largest cost in car ownership — and where EVs currently underperform.
EVs depreciate faster due to rapidly advancing battery technology, lingering buyer uncertainty about long-term battery health, and frequent model updates from brands like Tesla.
5-year residual estimates: Tesla Model 3 at 40–50% of purchase price (midpoint: £17,100), giving depreciation of £20,900. BMW 320i at 45–55% (midpoint: £19,000), giving depreciation of £19,000.
EV depreciation disadvantage: ~£1,900 over 5 years. Tesla residuals have stabilised somewhat after a sharp correction in 2023, but it’s still a real cost difference.
5-Year TCO Summary
| Cost Category | Tesla Model 3 | BMW 320i | Difference |
|---|---|---|---|
| Purchase price | £38,000 | £38,000 | £0 |
| Home charger | £1,000 | £0 | +£1,000 EV |
| Fuel / Charging | £2,750 | £7,565 | −£4,815 EV |
| Insurance | £5,375 | £4,750 | +£625 EV |
| Maintenance | £2,450 | £3,300 | −£850 EV |
| Depreciation | £20,900 | £19,000 | +£1,900 EV |
| 5-Year Total | £70,475 | £72,615 | −£2,140 EV |
Who Benefits Most
Break-even sits at approximately 6,900 miles/year assuming home off-peak charging. Annual savings at different mileage levels:
- 8,000 miles/year: ~£130 total saving
- 10,000 miles/year: ~£2,140 total saving
- 15,000 miles/year: ~£4,850 total saving
High-mileage drivers on home off-peak tariffs — Octopus Go, Intelligent Octopus, or similar — make the strongest private-buyer case. If you’re a company car driver, the BIK calculation swamps everything else in the model.
At 10,000 miles/year with home off-peak charging, the Tesla Model 3 costs about £2,140 less to own over 5 years than the BMW 320i. The saving comes entirely from fuel — insurance and depreciation both work against the EV. If you’re doing under 7,000 miles a year or relying heavily on public rapid charging, the numbers don’t stack up as neatly. Know your mileage and your charging situation before committing.