Electric car owners braced for price surge

Sarah Tooze, Consumer Editor
Fri, 26 Aug 2022

• 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.”

Ask HJ

Will the cost of charging an EV remain less than an ICE car?

With the price of petrol and diesel lowering slightly and the price of electricity likely to double if not more, will the cost of fuelling an electric car remain less than petrol or diesel?

It's worth doing some sums when trying to decide between petrol, diesel or electric power. As an example, let's look at the Volkswagen ID.3. A mid-range model has a 58kWh battery and can travel, say, 240 real-world miles from a charge. It's predicted that the cost of electricity could be capped at 70.34p per kWh from January 2023 – so, in a worst-case scenario, our ID.3 will cost about £40 to fully charge at home (equal to around 16p per mile). As a comparison, consider a Volkswagen Golf 1.5 TSI. You'll currently pay around 175.24p per litre of unleaded, so it'll cost around £87 for a full tank of petrol. Assuming you'll see around 50.0mpg, that works out at a cost of around 16p per mile... exactly the same as an ID.3. So how does a diesel Golf compare? Our readers see around 53.0mpg on average from a 2.0-litre diesel Golf, which means at the current fuel prices (185.9p per diesel) you'll pay... 16p per mile. Of course, these are rough calculations and there are numerous other factors to consider but, on the face of it, the cost of 'fuelling' an EV could soon be just as expensive as running a petrol or diesel car.

Answered by Andrew Brady

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Ask HJ

Should I buy a used car that can't be delivered for three months?

I am considering my first electric car and am being offered no incentives from the dealer. The car is described over the phone as a courtesy car, has about 1,975 miles on the clock but can't be delivered for three months having been taxed at end of June. A deposit can be taken. There are a few downsides like losing time off the guarantee and it's no longer new. Any others you can think of? What's the reason for this? The company seems respectable. I have dealt with another branch in the past. Should I be wary?

I'd suggest taking your business elsewhere, there is no valid reason why you should have to wait three months for a used car. If I had to make a guess, I'd say one of the dealer's customers is driving it whilst waiting for their car to be repaired. There are some long waiting times for repairs (due to the semiconductor shortage) and the dealer may extend the wait beyond three months if the repair hasn't been carried out in time.

Answered by Dan Powell

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