Motoring organisations are raising concerns that a 20 percent “pavement tax” on public electric vehicle (EV) charging is deterring drivers from making the switch to electric. The AA has highlighted the unfairness of the Treasury imposing 20 percent VAT on public charging points, which makes it more costly for those without a driveway and home charger – who are exempt from VAT – to charge their vehicles.
It means some petrol drivers could actually pay less. The AA commented: “EV drivers without a personal charger will be frustrated that the Chancellor opted to retain the ‘pavement tax’, by keeping VAT on public realm charging at 20 percent.”
Additionally, the RAC’s analysis indicates that reductions in wholesale electricity prices are not being reflected in the costs at some public chargers. This issue emerges amidst worries that the adoption of electric cars in the UK is lagging behind expectations, potentially leading to hefty fines for manufacturers of petrol and diesel vehicles that miss sales targets.
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Charging costs have risen, with October seeing an increase of 11p per Kilowatt hour for slow chargers, typically found on lampposts in residential areas, compared to September. Consequently, the price for charging during peak times on a public slow charger is now 69p/kWh, equating to 15.59p per mile, while off-peak charging costs stand at 44p per Kilowatt hour or 9.94p per mile.
According to the AA’s EV Recharge Report for October, using a slow 7kw home charger costs merely 24p per kilowatt hour or 5.42p per mile. This cost is significantly lower than the prices for public fast chargers. For instance, the average cost of using a rapid public charger at peak times stands at an eye-watering 18.53p per kilowatt hour, which is over three times the amount of the cheapest home charging option.
The VAT “pavement tax” results in scenarios where operating an electric car can be more costly per mile than driving a petrol-fuel vehicle. The report places the average expense for running a petrol car at 11.53p per mile, cheaper than the priciest public charger but more expensive than home charging for EVs at 5.42p per mile.
Jack Cousens, Head of Roads Policy for The AA, commented on the disparities: “While price rises are always disappointing, the difference between EV and petrol costs is that charging companies offer far more stability and uniformity compared to forecourts. We expect there to be little price fluctuation at chargers across the winter, whereas petrol drivers fear that their costs could increase daily.”
In addition to this, the RAC has reported that the costs for public rapid charging of electric vehicles (EVs) continue to remain ‘stubbornly high’. Wholesale electricity prices have seen a dramatic decline, dropping from 51p per kWh in August 2022 to just below 9p per kWh at the month’s end this year, yet drivers using rapid chargers still face high costs. The average tariff for pay-as-you-go chargers with outputs between 50 and 149 kilowatts remains at a steep 79.19p per kilowatt hour.
RAC spokesperson Rod Dennis commented: “Drivers of electric vehicles might be frustrated that the cost to use rapid or ultra-rapid chargers remains stubbornly high, despite wholesale energy prices dropping. But they might also be surprised to learn that the actual cost of electricity they are using when they charge up makes up a relatively small part of the total price they have to pay due to the high charges levied on the networks for grid upgrades and connections.”
Dennis pointed out: “Charging networks are spending enormous sums of money now to install the charging infrastructure that an increasing number of drivers will be using in the years to come, as more of us switch to EVs.”
Noting the importance of these facilities, he stated: “Not all drivers depend on these fastest, high-powered chargers, but they are a crucial element of the charging mix.”
Finally, Dennis emphasised: “‘It’s vital that public charging costs for drivers come down.”
