The cost of charging electric cars on the road has surged by nearly 60% in just eight months, making them more expensive to run on long journeys compared to petrol vehicles. According to an analysis by the RAC, rapid charge points used by drivers during long trips are almost £10 pricier than filling up a petrol car. The increase in cost is primarily due to soaring energy prices. VAT, charged at 20% on public networks, as opposed to 5% for domestic energy use, is another significant contributing factor.
While charging an electric vehicle at home is still substantially cheaper than fueling up at petrol stations, many drivers face obstacles due to the lack of off-street parking for charger installation. This becomes a concern as the UK government’s plan to ban petrol and diesel cars from its roads by 2030 draws nearer. However, critics argue that the tax levied on public EV charge points undermines the government’s environmental ambitions. Some believe that the reluctance to reduce VAT to 5% across the board is driven by the perception that electric vehicles are for the elite.
The RAC reveals that the average cost of rapid-charging an electric vehicle is 70.32p per kilowatt hour, marking a 58% increase since May and an 11% surge since September. This rise is attributed to escalating electricity prices and the infrastructure required to deliver substantial electricity safely. Consequently, charging an EV for a distance of 484 miles on a public network amounts to £92.69, surpassing the cost of filling a 55-litre petrol car at £83.03. Opting for ultra-rapid charging further escalates the cost to £98.59 – £15.51 more than filling a petrol car and £2.91 more than a diesel car. Public charging is also more than double the price of domestic charging, which comes to around £44.74.
While the majority of drivers can charge their EVs at home, approximately 16% do not have access to private parking spaces, a figure projected to increase to four in 10 drivers as the popularity of EVs continues to grow in anticipation of the petrol and diesel ban. The RAC’s Simon Williams expressed concerns that high energy prices may discourage people from using public EV chargers altogether. He suggests that reducing the VAT on electricity sold at public chargers to 5% would help control prices and demonstrate the government’s commitment to promoting electric adoption.
FairCharge estimates that lowering VAT on public networks to 5% would cost the Exchequer a “relatively small” £37.3 million, with the potential for an increase if EV uptake increases in the future. The campaign group emphasizes that this discrepancy primarily affects lower-income households without off-street parking, making it an unfair system. It further argues that the tax disparity may deter disadvantaged families from transitioning to EVs and potentially compel the government to push back its net-zero target from 2050.
Ginny Buckley, founder of car review website Electrifying.com, highlights the significant gap in VAT rates between public and private charging, which poses challenges for drivers without off-street parking. She emphasizes the need for the government to take decisive action in achieving price parity. Reducing the current 20% VAT rate imposed on public charging to 5% appears to be a sensible solution in addressing this issue.
Data from the Society of Motor Manufacturers and Traders (SMMT) reveals a 40.2% increase in the number of electric vehicles on the road by December 2022.
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