Drivers who have invested in electric cars may be regretting their choice, after it was revealed that the vehicles are more costly to run on long journeys than petrol motors.
Analysis by motoring body the RAC revealed that public charge points used by motorists topping up on long drives are now nearly £10 more expensive than filling up a car with petrol. Drivers opting to use rapid charge points so they can continue their journey quickly fare even worse, with a £15.51 bigger bill than petrol users and £2.91 more than diesel.
Charging to cover 484 miles on a public network costs £92.69, which is more expensive than filling a 55-litre petrol car to go the same distance at £83.03. Using ultra rapid charging increases the cost to £98.59. Public charging is also more than double the price of domestic charging, which comes to about £44.74.
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Charging an electric car at home is still much cheaper than buying a tank of fuel at the pumps, as VAT is charged at 20% on public networks, compared to five per cent for domestic energy use. But while most drivers can charge their cars at home, around 16% do not have private parking spaces, according to campaign group FairCharge, which is calling on the Government to reduce the VAT to five per cent on public charging points.
FairCharge estimated that bringing VAT on public networks down to five per cent would cost the Exchequer a "relatively small" £37.3m. However, this would rise if the uptake of electric vehicles increased in the future as predictions are that four in 10 drivers as more people opt for electric vehicles ahead of the ban on petrol and diesel car sales from 2030. A spokesperson said that the tax discrepancy could deter poorer families from electric cars and even force the Government to push back its net zero target from 2050.
“It’s most likely to affect those living in terraced houses and apartment blocks - often the lower-income households - so it’s something that we feel is really unfair," the spokesperson said. "There’s a perception that electric vehicles are for the elite, but our point is that we’re trying to widen access to electric vehicles. I think there’s a bit of reluctance from the Government.”
New petrol and diesel cars are due to be banned from Britain’s roads within years as the Government pushes to reach net zero by 2050, yet some critics believe ministers are reluctant to take the step of setting VAT at five per cent across the board because electric vehicles are seen as elitist.
Simon Williams, of the RAC, told the Telegraph: “Our concern is that the extremely high energy prices have the effect of putting people off using public EV chargers of all speeds altogether. Cutting the level of VAT on electricity sold at public chargers to five per cent to match what people pay at home would be one way of keeping prices under control and would show the Government remains committed to doing everything it can to get more drivers to go electric.”
Data from the Society of Motor Manufacturers and Traders (SMMT) shows the number of electric vehicles on the road increased by 40.2% last year but Ginny Buckley, founder of car review website Electrifying.com, warned that the VAT gap meant that “costs aren’t adding up” for drivers without off-street parking. She said: “Unfortunately, this is happening at a crucial point in the electric vehicle transition where mainstream car buyers need to be brought along on the journey. The Government needs to step in and take decisive action to ensure that price parity is reached between public and private charging. Reducing the 20% VAT rate currently imposed on public charging to five per cent seems like an obvious way to do this.”
The news of rising costs for EV owners came as American EV manufacturer Tesla this week announced it has cut the price of some of its most popular electric cars by thousands of pounds in a bid to boost customer demand. New UK buyers will save £5,500 on an entry-level Model 3 and £7,000 on the cheapest Model Y, sparking anger from some of the 16,000 customers who had bought a car last year at a higher price.
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