According to RAC Charge Watch, dropping wholesale energy prices are not reflected in the cost of public rapid and ultra-rapid electric vehicle (EV) charging.
Breakdown cover and car insurance company RAC has released data from its Charge Watch study, which analyses pence/kWh charges from charging providers offering 50-149kW rapid chargers and ultra-rapid (150kW+) chargers.
While at-home charging prices fluctuate in line with wholesale costs, public charging costs are “virtually unchanged” since the start of the year, the RAC says. The average cost of a rapid pay-as-you-go charge, using chargers with power outputs from 50-149kW, currently stands 79.19p/kWh, compared to 79.55p/kWh at the start of the year.
In fact, the cost of public charging is up by 4% on this time last year, and by 28% on two years ago. RAC research shows that off-peak home charging can cost as little as one-seventh of the price of doing so at an on-street lamppost or bollard charger (7p, compared to 49p/kWh), and less than one-tenth of the price of using a rapid or ultra-rapid charger (7p, compared to 80p/kWh and 78p/kWh, respectively).
As of the end of August 2024, the wholesale electricity price was just under 9p/kWh, and the RAC found three key reasons for the disparity between what charge point operators (CPOs) charge and the actual cost of electricity.
Primarily, networks building and operating chargers have faced increases in additional charges on their electricity supply. Further, those same networks are investing in future infrastructure needs, building out the charging network in preparation for a volume of vehicles not yet on the roads.
There is also no price cap for business energy use. A spokesperson for the RAC, Rod Dennis, said that EV drivers might be surprised to learn “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”.
He explained: “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.”
Chief executive officer of ChargeUK, a trade association representing CPOs, Vicky Read, said: “We believe reforms are needed to help charge point operators offer public charging that is as affordable as possible.
“The sector has committed to spend £6 billion ahead of demand and profitability to deliver the charging infrastructure that the UK needs. With a public charger being installed every 25 minutes and the network expanding by 42% a year, we are on track to do this.”
Both Read and Dennis drew attention to the VAT charge of 20% for public charging, while at-home charging is just 5%. Since a reduction in the so-called pavement tax was not included in the budget, Dennis suggested that lower prices could come as a result of Ofgem reducing the additional charges that charging networks have to pay.
Reducing the price of public charging will benefit the automotive sector as a whole. It has recently been calling for government support in the face of dropping demand, as covered this week by Current±.
