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The Guardian - UK
The Guardian - UK
Environment
Shane Hickey

Brace for a shock: cost-of-living crisis drives up price of electric car charging

Annoyed: electric car owner Philip Ingram
Annoyed: electric car owner Philip Ingram. (See case study below.) Photograph: Andy Hall/The Observer

While petrol price rises may have made the headlines, the energy crisis has also been hitting owners of electric cars in the pocket. The cost of charging at home has risen by 43% for some drivers, while the already higher cost of on-the-road recharges has gone up 25%.

As energy prices are forced up due to rising costs for suppliers, specialist charging deals for drivers have become more scarce. And now there are suggestions that people may put off the purchase of an electric car as the cost-of-living crisis takes hold.

Although demand for vehicles is high, a new report to be released this week from Volkswagen Financial Services suggests that fewer people might commit to buying electric vehicles (EVs) as belts tighten and the cost of energy increases.

“The cost-of-living squeeze will probably mean some potential EV purchasers may not commit to a switch this year, particularly as such vehicles are perceived to be more expensive in relative terms when compared to combustion engine alternatives,” says the report.

Home charging

Electric car owners who are charging their vehicle at home will usually find the most cost-efficient option is one of the specialist tariffs on offer. “Two-rate” tariffs offer one price for electricity used during the day and another for night-time use. When prices are much lower you can top up your battery cheaply.

For example, comparison site Love My EV lists the rates for EDF’s GoElectric 35 as 44.69p per kilowatt hour (p/kWh) during the day and 4.5p/kWh at night. The Octopus Go tariff costs 35.04p/kWh during the day and 7.5p/kWh at night. Both figures are based on supplying a home in south Wales.

Three electric cars charging at a roadside station with an attractive yellow zig-zag canopy sheltering the chargers
A public charging station in Sunderland: many electric vehicle owners cannot charge at home and must pay on-the-road rates. Photograph: Christopher Thomond/The Guardian

Since energy prices have increased, the number of specialist deals on the market has dropped, says Laura Thomson, co-founder of Love My EV. While they are usually the best deals for drivers who charge overnight, the day rate and standing charge can be expensive, which consumers need to take into account when working out what is best for their situation.

“For most people who have an EV to charge at home, it does make sense, but there is a high standing charge and a high day rate to factor in,” says Thomson. If you use a lot of electricity during the day, this may not be your best option.

The site has a comparison tool for tariffs. Beware of promises of “free miles” within tariffs as these savings may be outweighed by higher charges, it says.

The rising price of EV tariffs means drivers now face paying 43% more than a year ago. This amounts to a rise of about £75 a year for an average vehicle such as a Nissan Leaf or a Renault Zoe, says Ben Nelmes of transport research company New AutoMotive.

In 2021, the cost of recharging an EV that covered 7,400 miles a year – the average mileage – and was recharged mostly at night was £174. This was based on an overnight rate of 4p/kWh and a day rate of 18p/kWh. By last month, this same charging practice cost £249 a year, based on the best prices then available – 5p/kWh at night and 28p/kWh during the day.

“Someone driving a bigger EV, such as a Kia e-Niro or Tesla, will find that this underestimates what they’ll be paying. Similarly, someone in a Smart car will find they spend a bit less than this,” says Nelmes.

On the road

Rising costs have also become apparent at public chargers. Instavolt, which operates a charging network across Britain, has increased its prices twice so far this year, first from 45p/kWh to 50p/kWh and then to 57p/kWh. Ubitricity, one of London’s largest charging networks, increased prices from 24p/kWh to 32p/kWh last month.

Data company Zap Map, which maps public charge points, found that, on average, charging costs increased from 24p/kWh in December to 30p/kWh in February for slow and fast chargers, and from 35p/kWh to 44p/kWh for rapid and ultra-rapid chargers.

“The price of charging your EV on the public network, or at home, has risen substantially over the past few months with the general increase in electricity prices,” says Melanie Shufflebotham from Zap Map.

There are 460,000 EVs currently in the UK, according to the Volkswagen Financial Service report, and just 300,000 home charger points installed. Those who don’t have a home charger end up paying more, according to Keith Brown of Paythru, a payments technology company. “One of the big inequities of the emerging EV charging market is the price ‘premium’ electric vehicle drivers pay if they don’t or can’t have a home charge point,” he says. “Domestic supply is taxed at a VAT rate of 5% whereas public charge-point supply is taxed at a VAT rate of 20%.”

Shufflebotham has called for the rates to be made equal. “Equalising the VAT rate for both public and home charging would be a great example of levelling up, and encourage more people to make the transition to electric vehicles,” she says.

The advantages

Despite increasing prices, EV drivers still face much lower bills than those with petrol or diesel cars, using figures based on the same annual mileage for all types of vehicle.

Nelmes says that while the rises in the costs of EV charging at home are high, they are dwarfed by the costs of filling a car with fuel.

“We estimate the average UK motorist would spend £1,028 per year on petrol and £987 per year on diesel. That’s up from £796 a year on petrol and £747 a year on diesel a year ago,” he says. “That means that the fuel cost savings available to petrol and diesel drivers who switch to EVs this year are £779 for petrol drivers and £738 for diesel drivers.”

Case study: positives and negatives

Having bought a Nissan Leaf in the last few weeks, Philip Ingram looks back at the deals that were available last year with some annoyance.

He currently pays a flat rate throughout the day of 28.45p/kWh with British Gas, the best tariff available to him at home in Bordon, Hampshire. Last year, he could have taken advantage of deals of 5p/kWh overnight, he says. While there are deals with good night-time rates, now their high day rates mean they do not suit the family budget.

The annoyance is tempered by the savings from moving from a diesel VW Golf to an EV.

Ingram, who runs a cotton company called LittleLeaf Organic, used to pay nearly £90 to fill up with diesel but gets the same mileage for £20 of charging. This has to be balanced against the cost of the car: £24,000. “I wish we had done it a long time ago,” he says, “but the reason that we have been slower is … capital costs. Several times I have said to [my wife] Lisa the running costs are unbelievable, but then you look at the cost of buying this car, [which] is enormous.”

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