UK's EV sales growth under threat from soaring cost of public charging: RAC

Surging UK electricity prices have pushed the cost of recharging electric vehicles on public networks close to parity with fueling gasoline and diesel cars, risking a slowdown in uptake on new EVs sales, according to driving services group RAC.

After the costs of using public rapid charge points jumped 42% in just four months, an electric car driver using rapid or ultra-rapid public chargers is paying around 18 p per mile for electricity, compared with roughly 19 p per mile for gasoline, and 21 p per mile for diesel, the RAC said Sept. 26, citing to figures.

The jump in wholesale costs of gas and electricity in the wake of the Ukraine war means it costs EV drivers GBP10 more to charge a typical family-sized electric car to 80% on public network, RAC Charge Watch estimated.

"The RAC is also concerned the relatively high cost of rapid charging on the public network risks putting off drivers from opting for electric cars when they next change their vehicles," the RAC said in a statement. "While the government's Energy Bill Relief Scheme announced last week should help prevent charging costs from spiraling still further, it remains the case that drivers using public chargers unfairly pay 20% in VAT [value-added tax] for electricity they buy, compared to charging at home where it's just 5%."

RAC said it supports the UK's FairCharge campaign, which is calling for VAT on public and private EV charging to be set at 5%, a move that would reduce the cost of an 80% rapid charge by 7.91 p to 55.38 p per kWh, and an ultra-rapid charge by 7.99 p to 55.95 p per kWh and would not unfairly penalize those drivers who can't charge their cars at home.

"With electricity costs up by an average of 140% on last year and the government's divisive VAT levy of 20% on public charging, EV adoption is under threat. This government needs to act on charging costs, cap rises on public chargers, lower VAT and support charge point operators to build infrastructure," Quentin Willson, founder of the FairCharge campaign said in a joint statement.

Oil displacement

The RAC said, however, that most EV drivers charge their vehicles at home where -- under the UK's Energy Price Guarantee that takes effect in the coming week -- the cost per mile for an average-sized EV driven efficiently is around 9 p for a mile.

For the first eight months of 2022, 137,498 battery EVs, or BEVs, were sold in the UK, up 49% year on year and making up 14% of total sales, up from 8.4% over January-August 2021. UK gasoline vehicle sales fell 17.7% year on year to 434,120 units, while diesel vehicle sales dropped 47% to 56,693 units, Society of Motor Manufacturers and Traders data showed.

But the market share of gasoline and diesel internal combustion engine vehicles rose to 52.4% in August, the largest combined market share since December 2021, up from 51.3% in July and 50.8% a year ago.

Like most of its major European market peers, the UK saw EV sales drop off in July with decreases in absolute levels to less than 19,000 plug-in EVs sold in July 2022 versus nearly 31,000 in June.

The fall came mostly as all car sales dipped, however, and the EV car market share remained high in Europe at around 16% with yearly sales growth remaining strong at well over 10%.

S&P Global Insights forecasts that passenger EV fleets globally will grow to displace 8 million b/d of oil products by 2030 before accelerating to displace 5.8 million b/d by 2040.