UK attempts to reduce charging costs

UK Chancellor of the Exchequer Rachel Reeves is preparing to reduce charging costs for electric cars amid fears that the new mileage-based tax could cause sales to plummet. As it stands, drivers will be charged 3p per mile for public charging stations.

Beev ultra fast charging station london england uk — Image: Be.EV

Experts estimate that this could lead to a reduction in the network charges at public charging stations, which have risen in recent years. Launching the new tax scheme in 2028 will likely reverse this trend somewhat, so Downing Street is “focused on cutting so-called network charges at public charging points”, as the Telegraph writes.

In addition to the per-mile charge, the Treasury is also looking to reduce the current 20 per cent VAT rate for charging stations at petrol stations and supermarkets. Drivers who charge at home face a 5p fee, to compare.

If the tax is implemented, it is “expected to cost the average EV driver an extra £255 per year as the Treasury seeks to replace lost revenues from fuel duty,” as the Telegraph calculates. Hybrid vehicles face less of a fee, estimated to be a 1.5p per mile tax from 2028.

A Whitehall source said: “The way we convince people to switch to EVs is by showing people it is easy and it is cheap. There are savings to be had here for many people.” Particularly making public charging more affordable is a target, as homeowners who can charge there currently pay significantly less to charge their vehicles, compounding an already-existing disparity. Zapmap currently calculates that at home one can expect to charge for about 8p per kWh, while the comparable rate at a slow charging station is about seven times higher at 54p per kWh.

Whether the tax is implemented, the insecurity surrounding e-mobility on the European continent is doing no favours for local manufacturers, for example, with the 2035 ICE phase-out date under fire.

A government spokesperson addressed the situation as a whole: “The Government is boosting the EV transition by saving drivers up to £3,750 off a new car, with almost 50,000 people benefitting already, and investing over £7.5bn into the UK electric vehicle sector. We’re also reviewing the cost of public EV charging, which will look at the impact of energy prices, wider cost contributors and options for lowering these costs for consumers.”

telegraph.co.uk