Electric car owners braced for price surge
- Energy regulator Ofgem has announced a rise in the energy price cap of 80 per cent from 1 October 2022.
- Increasing energy bills are expected to push inflation even higher.
- EVs near fuel price parity with ICE vehicles.
Electric car owners are facing a ‘perfect storm’ of rising domestic electricity prices, rapid charging set to become more expensive and record levels of inflation that mean pockets are being squeezed.
Earlier today (26 August 2022), the UK’s energy regulator Ofgem announced a rise in the energy price cap of 80 per cent to £3,549 per year for dual fuel for an average household from 1 October 2022.
The price cap, as set out in law, puts a maximum per unit price on energy that reflects what it costs to buy energy on the wholesale market and supply it to people’s homes. It also sets a profit rate that suppliers can make from domestic energy sales.
Today’s increase reflects the continued rise in global wholesale gas prices, which began to surge as the world unlocked from the Covid pandemic and have been driven still higher to record levels by Russia slowly switching off gas supplies to Europe, Ofgem said.
Increasing energy bills are predicted to drive inflation - already at a record level of 10.1 per cent - to a new level of 13 per cent.
All this means that the cost of running an electric vehicle, particularly for those drivers who don’t use one of the dedicated fixed price tariffs for charging an EV overnight, is set to rise.
A Nissan Leaf e+, for example, with a useable battery capacity of 59kWh, currently costs £16.52 to charge at peak times but applying the October price cap this would rise to £30.68.
The rise in the energy price cap comes at time when fuel prices have started to drop from record levels and already HonestJohn.co.uk readers have been asking whether the cost of charging an EV will remain less than an international combustion engine (ICE) car.
Commenting on today's announcement, RAC spokesperson 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 per cent more from 1 October than it did under the old cap - £33.80, compared to £18.37.
"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.
“We’re also 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 the FairCharge campaign call for the Government to cut the VAT rate levied on electricity from public charge points to five per cent, to mirror the rate charged on domestic electricity.”
How much does it cost to charge an EV?
How much you pay to charge up an EV depends on a number of factors. The first is where you choose to connect your car to a power supply. If you hook up at work or some public charging bays, it can be free to recharge your car’s battery as this is often offered as an incentive to use EVs.
At home, you’ll pay for electricity at the same rate as you do whenever you use any other electrical appliance. The cost comes down to what tariff you’re on from your electricity supplier and when you choose to charge your car. Some suppliers offer cheaper tariffs at night when there’s less demand.
How can I compare the cost of an electric car?
You can compare the cost of two different models using our fuel calculator. For instance, you may want to compare an electric Nissan Leaf to a petrol Vauxhall Astra or an electric Skoda Citigo-e iV against a petrol Ford Focus.
Will the cost of charging an EV remain less than an ICE car?
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hissingsid on 26 August 2022
The pain for EV owners will not end there. As well as further increases in electricity prices they will not stay VED free forever.Declining revenues from VED on petrol and diesel cars will probably result in a flat rate of VED on all cars.
VWCSK on 27 August 2022
If were to believe the media most of our electricity comes from solar panels and wind turbines so no need to worry about gas prices, but of course the media all full of BS and the truth about renewable is now starting to hit the fan.One thing to remember though is 50% of our gas comes from the North Sea and is OUR gas, not the governments or British Gas or Centrica’s so tell me please were not being taken for a ride.
Never mind maybe someone will be along soon on e-scooter type of articulated lorry to save the day so a loaf or bread doesn’t hit the £2 mark by Christmas.
groaver on 27 August 2022
The gas is the property of the companies who extract it.
daveyjp on 27 August 2022
if we didn't have the generation capacity of renewables we would need even more gas, so the situation woukd be far worse.
Its also not "our" gas. Someone pays to extract it, it is then sold on the global gas markets and if you have a product you will look to maximise the price for it.
angelcyn on 28 August 2022
If we hadn't taken the net zero route and closed down all the coal fired faster than we replaced them with nuclear, the situation would be far better, running a two tierd energy supply, ie you have to have nuclear or gas on standby for when the wind doesn't blow and the sun doesn't shine is the most stupid and expensive way of supplying energy.
Wind and solar as stand alones are useless, plus the national grid has said it will need a base load increase of 60% minimum to fullfill all the net zero obligations and that aint going to happen, so what with EVs then.
4caster on 1 September 2022
You are well behind the times with your last comment.
Solar and wind energy are far cheaper to produce than gas, and do not enjoy government subsidy now. Ørsted has just opened the biggest offshore wind farm in the world, Hornsea 2 off the Mouth of the Humber. With 165 turbines and each blade 265 feet long, one turn of one turbine will power the average home for 24 hours. We also need modular nuclear reactors, the likes of which Rolls Royce has been putting into warships for decades.
focussed on 2 September 2022
Total nonsense.
The companies installing wind turbines should be contractually bound to pay for the construction of the back-up base load OCGT power stations that have to sit running hot, using gas, to back up the wind turbines when the wind falls light and they cannot generate or the wind is too strong and they have to be shut down.
At the moment they couldn't care less what happens, it's on someone else's dollar.
Generation isn't the problem - it's reliable generation that matters, and wind turbines are not the answer.
NickNike on 2 September 2022
The cost of renewable generation is 4 times the cost of gas generation. Wind turbines have a life of 20 years and will need replacing. The blades are plastic and can only be disposed off by landfill. They also kill loads of birds of prey. Your green generation is purely political and based on the massive lie of climate change.
NEIL SCARLETT on 30 August 2022
Yes indeed, an e scooter that charges itself by wind power generated by the motion of the scooter, Yes folks roll up roll up be the first in your street to own a perpetual motion machine.
Contax139 on 1 September 2022
Bread has already hit the £2.00 mark, we don't get that much energy from wind and solar at it's best and it's very seldom at it's best.
Lloydyboy on 1 September 2022
Put your hands up if you didn't see this coming?Really, no hands?
Least it's easier to steal electric by bypassing your house supply as opposed to driving off a forecourt without paying.
I'll stick to my diesel for as long as the holes in my body remain functional.
MJJ on 1 September 2022
Petrol E10 in South Shields is 166.9paethelwulf on 2 September 2022
NickNike on 1 September 2022
What a complete cock-up. There's been no energy management or adequate investment for the past 30 to 40 years. And that included the Tories and Labour. A complete bunch of 650 Muppets, yet at the next general election all the m****s will go out and vote thinking their cross on a piece of paper will make a difference.Well. I think petrol will drop more leaving electrickery a lot more money. I have a message for the green Liberal brigade who are messing it all up for everyone and who drive around in their premium priced EVs.
Mwahahahahahahahahahahahahaha
4caster on 1 September 2022
I have an electric car, which is powered from the sunshine that my solar panels collect. For the rest of my electricity I signed a 12-month fixed rate deal with British Gas in May this year.I know it won't happen much in winter, but I am pleased to fuel my car for nothing for half the year, and at 32p per kWh for the rest of the time.
NickNike on 2 September 2022
How does this comment help with the overall situation? Did you install the panels? If so, you don't mention the thousands spent on installing the solar panels which will take decades to get you money back. And you have a fixed rate with a company that was nowhere near the cheapest. I had a fixed rate and the company went bust. I fail to see what point you are trying to make. You never know, BG could go bust. At 32p per unit. Are you sure? I was paying 15p in May and 27.63p now.
Tony77 on 2 September 2022
One fuel that is not mentioned and is about half the price of petrol, less emissions than petrol and diesel cars is lpg. I'm currently paying just under 80p a litre.If you consider this in the equation between electric cars and petrol car, lpg looks like it could be a winner.
Another thing that isn't really talked about is the emissions from the gas fired power stations,oil fired power stations and the few remaining coal powered generating stations. They are just moving the pollution from one place to another.
Electric cars are a good idea but they are still in their infancy at the moment and other forms of power should be considered as well
on 3 September 2022
No mention of EV tariffs offered by several electricity providers. I am paying 8.25p/kWh to charge mine for 5 hours a night fixed to next July.Add a comment