Energy price cap 2022: what it means for electric car costs

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That will take the cost of charging an average EV with a 64kWh battery, such as a Kia e-Niro, from £18.37 under the current cap, to £33.80, according to the RAC’s calculations. At last winter’s price cap, the same car would have cost £13.69 to charge from 0-100%.

EV sales have soared over the past year but some industry observers are worried that as running costs creep closer to those of petrol and diesel cars, some buyers could be put off switching to an EV.

Part of the appeal of EVs for many drivers has been the lower per-mile running costs compared with petrol and diesel vehicles. However, the latest price rises will close that gap substantially, especially as fuel prices fall around the country.

RAC spokesman Rod Dennis said: “The impact of the energy price cap increase will certainly be felt by drivers who charge their electric cars at home, with a full charge of a typical family-sized electric SUV costing 84% more from 1 October than it does under the current cap.

“Despite recent falls in the price of petrol and diesel, the cost of charging at home is still good value compared to paying for either fuel, but again underlines just how the rising cost of electricity is affecting so many areas of people’s lives.”

Rising running costs

Ben Nelmes, co-founder and head of policy at green consultancy New AutoMotive, said: “Even with rising electricity prices, EVs will continue to be much cheaper to run than petrol or diesel cars. There are still great offers for EV electricity tariffs to further reduce the cost of charging. EVs can and should be part of the solution to the cost-of-living crisis.”

In many cases even under the new price cap, EVs will be cheaper to run per-mile than an equivalent petrol car but the gap is substantially smaller. According to calculations by Heycar based on official consumption figures, a Renault Zoe will cost 11.3p per mile while a similar-sized petrol Vauxhall Corsa will cost 14.5p per mile. A Nissan Leaf e+ will cost 12.8p per mile under the new cap while a diesel Ford Focus will cost 13.5p per mile. The gap between EVs and petrol/electric hybrids is even smaller. The Kia e-Niro referred to by the RAC will cost 11.67p per mile at the new unit price while the full hybrid version of the Niro costs 12.07p at current petrol prices but costs £8,500 less to buy.

The latest figures are based on the 52p/kWh cap but some energy suppliers have favourable EV tariffs for owners who charge at off-peak times, with rates as low as 7.5p per kWh. However, some suppliers, including British Gas and EDF, have suspended sales of the tariffs to new customers.

Emily Seymour, energy and sustainability editor at consumer group Which?, said rising costs could put some motorists off changing to an EV. She said: “A big part of the electric vehicle appeal has always been lower running costs, but these price rises could jeopardise more people making the switch to electric cars. Many non-hybrid petrol drivers will still save money by switching to electric, but for many diesel drivers that now won’t be the case.

“In a recent survey, we found that the upfront cost of buying an EV is the biggest barrier preventing drivers from considering an electric vehicle – and this latest energy price rise could further prevent people from making the switch.”

Dan Powell, consumer editor at Heycar, agreed, saying the price cap announcement was “grim reading” for EV owners and prospective buyers. He commented:  “Drivers who are on the fence about going electric could soon decide it’s best not to make the leap and will hang on to their petrol or diesel car instead.

“That’s why it’s imperative that the Government acts now to support EV drivers. If it doesn’t it risks destabilising the fledgling EV market and undermining the UK’s climate ambition.”

Public charging costs rising

The RAC said that drivers who need to charge away from home won’t escape price rises either and called for action to cut costs at public chargers. Users charging at many rapid chargers are already facing per-mile costs higher than for many petrol or diesel vehicles.

Mr Dennis said: “We’re aware that public chargepoint operators are having no choice but to increase their prices to reflect the rising wholesale costs they’re faced with, which will heavily impact drivers who have no choice other than to charge up away from home.

“The RAC continues to support FairCharge’s campaign for the Government to cut the VAT rate levied on electricity from public charge points to 5%, to mirror the rate charged on domestic electricity.”

Chargepoint operator Instavolt, which recently put its prices up to 66p/kWh, said that if the Government were to cut VAT to 5%, its costs would fall to 58p/kWh. The Government has previously ruled out any such change in VAT rates.

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