Home EV charging cut to less than 5p a mile but set to rise from October due to Ofgem hike

Electric car owners can currently benefit from charging costs as low as 5p per mile when plugging in at home, new research from the AA shows.

A July reduction in the energy price cap reduced costs from standard domestic tariffs, allowing electric vehicle owners who can charge them on their property to take advantage of lower energy costs.

The report shows that some drivers could pay even less than 5p per mile if they have a special EV tariff and can take advantage of cheaper off-peak energy prices.

However, the super-low operating costs won’t last long as Ofgem has announced that domestic energy prices will rise from 1 October.

On 1 July there was a 2p reduction in the energy price cap.

This allowed EV owners to benefit from paying just 4.97 pence per mile to charge.

This is a huge saving compared to driving a traditional petrol car; the car group estimates the average cost per mile (based on the latest UK fuel prices) at 12.90p – more than 2.5 times what some EV owners pay to charge at home.

It shows the dramatic decline in electric car charging costs as a result of smoothing energy prices.

By contrast, in December 2022, when the AA first launched the Electric Vehicle Charging Report, the price threshold for charging a car nationally was 7.99 pa-mile.

The 61 percent price reduction is even more tempting compared to high gasoline prices: charging your vehicle at home is at least 60 percent cheaper than refueling.

And public charging network prices are also static across all speeds and tariffs, compared to petrol prices, which have risen by 0.50p per litre between June and July alone.

Slow and on-street charging fell in June (by as much as 8p per kWh for slow charging at peak times), while in May ultra-rapid charging costs fell by 5p per kWh at both peak and off-peak times.

Jack Cousens, head of road policy at The AA, said: ‘Driving an electric vehicle for less than five pence a mile is a landmark moment and demonstrates just how cheap electric driving can be.

‘As this is the cost based on standard variable tariffs, savvy EV drivers will have shopped around for the best deals from energy providers to further reduce their costs.

‘The vast majority of EV drivers charge at home and only 15 percent of their charging is done on the road.

‘This helps keep costs even lower as drivers can plan their trips to coincide with the cheapest fares in their ideal location.’

While EV owners who can charge at home are currently reaping the benefits of ultra-low running costs, this won’t be the case for long.

Last week, Ofgem announced that the price of domestic electricity will rise from 22.36p/kWh until 30 September 2024 to 24.50p/kWh from 1 October 2024.

However, the AA is reassuring electric vehicle owners that the situation is not as serious as feared.

The increase is planned to be similar to rates from April 2024 to June 2024, meaning the cost per mile to charge from home will increase but will still be lower than in previous winters.

Jack Cousens commented: “EThis momentum (of collecting price reductions) will be short-lived following the news of the increase in domestic energy prices in October.

‘Electric vehicle owners will hope that the rise in electricity prices is merely temporary, but will find solace in the fact that they are not as high as the peak costs experienced at the height of the Russian invasion of Ukraine.’

Drivers of conventional internal combustion engine cars can also expect their fuel bills to rise.

UK petrol prices have recently fallen to their lowest level in six months, with the average price down to 143p per litre. This is the lowest level since February.

There are warnings, however, that this relief will be short-lived.

The AA has said drivers face “permanently high” fuel costs as fears grow that the new Labour government will raise fuel duty for the first time in almost a decade and a half.