Energy Prices and EVs
🚩 What do the rising energy prices mean for electric vehicles?
Following the recent hike to electricity prices, several British media outlets reported that electric vehicles would become more expensive to run than vehicles that run on an internal combustion engine. This is simply untrue.
This is because the government has now committed to lowering the price cap - meaning that EVs will remain cheaper to run for at least the next two years.
What is the energy price cap?
The energy price cap was introduced by Ofgem, the body that regulates energy in Great Britain, in January 2019. It followed concerns that many people were paying too much for their energy.
The price cap limits the maximum amount energy suppliers can charge you for each unit of energy you use if you live in England, Scotland and Wales.
Between 1 July and 30 September 2024, annual energy bills for a typical dual-fuel direct debit household in Great Britain are set to around £1,568.
Find out more from Energy Savings Trust.
Why have EV running costs increased recently?
In the last few months, petrol and diesel prices have fallen, while at the same time it became clear that electricity prices were set to rocket.
The extraordinary increase in electricity prices means that charging electric cars has also become more expensive. It must be noted that despite this unprecedented price hike, EVs are still cheaper to run that their fuel powered counterparts. This is especially true for drivers with home chargers, or local overnight charging options. If you have a driveway - a home charger will pay for itself, especially with an EV energy tariff.
Are electricity tariffs still important for EV drivers?
The value offered by electric vehicle energy tariffs is significant – and even more so at a time such as this. These tariffs are aimed specifically at EV drivers that charge at home and offer access to cheap off-peak electricity. When comparing the running costs of different fuel types these tariffs mean EVs will always have the edge, as there is simply no equivalent means for motorists to access similarly discounted prices for petrol or diesel.
Unfortunately, whilst the vast majority of drivers can simply plan ahead, charge at home, and still save money, not every electric car owner has access to home charging. It seems unlikely that the government’s price cap will cover public EV charging, and it will be those who can’t charge at home that suffer the most from higher electricity prices.
What is our advice to drivers looking to switch?
We believe that drivers who are able to charge at home, especially those with a variable tariff, would still be able to save substantial sums of money on running costs of their new EV. Despite government intervention guaranteeing cheaper rates for only two years - it is likely that additional measures will be taken.
With the energy prices now stable, and with renewed effort to help households through interventions such as GB Energy, we believe that EVs will continue to provide a good deal for drivers - but at the same time we urge you to double check your potential savings using our savings calculator - as our energy prices are constantly updating.
Enter your registration to see how much you could save!
Switching to an EV could still be cheaper than paying for fuel but given the recent price spikes, it is worth double checking. We use the latest average energy costs to estimate your savings.