Electric Vehicle Owners to Be Hit Hard by Soaring Energy Prices: Report

By Alexander Zhang
Alexander Zhang
Alexander Zhang
August 27, 2022 Updated: August 27, 2022

Electric vehicle (EV) owners will be badly hit by a steep rise in energy prices, UK motoring group RAC has warned.

Ofgem, the UK’s energy regulator, announced on Aug. 26 that the energy price cap for around 24 million households in England, Scotland, and Wales will rise by 80.06 percent on Oct. 1, sending the average household’s yearly bill from £1,971 to £3,549 ($4,200).

Under the new cap, the RAC said, the cost of a full charge at home for an EV with a 64-kilowatt hour battery will be £33.80 ($39.86). That is compared with £18.37 under the current cap, and £13.69 for last winter’s price limit.

RAC spokesman 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 percent more from Oct. 1 than it does under the current cap.”

But he said the cost of charging an EV at home is still “good value” compared to paying for petrol or diesel.

Dennis said those EV drivers who have to charge up away from home will be hit even harder.

“We’re also aware that public charge point 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,” he said.

The RAC reiterated its call for the government to cut the VAT rate levied on electricity from public charge points to 5 percent, to mirror the rate charged on domestic electricity.

Surging Prices

Ofgem said the price increase reflects “the continued rise in global wholesale gas prices,” which began as demand increased following the COVID-19 pandemic and was exacerbated by the Russia invasion of Ukraine.

It warned that “prices could get significantly worse through 2023.”

The Bank of England has forecast that higher gas prices will push inflation above 13 percent by the end of the year, while Citigroup this week warned that it could hit 18.6 percent in January, the highest in almost half a century.

Ofgem’s chief executive Jonathan Brearley urged the incoming prime minister and new Cabinet “to provide an additional and urgent response to continued surging energy prices.”

Foreign Secretary Liz Truss, currently the frontrunner in the Conservative Party leadership race, has promised to take “decisive action” to deliver “immediate support” if she becomes prime minister.

PA Media contributed to this report.