EV Charging Costs Fall Offset by New Vehicle Excise Duty in UK

Recent reports show that peak-time on-street charging costs for electric vehicles (EVs) fell by 7p per kWh in April, and off-peak rates also saw a slight decrease, making EV charging more affordable especially for those without private parking. However, these savings are counterbalanced by the introduction of Vehicle Excise Duty (VED) for EVs, which now matches the tax rates of petrol and diesel vehicles, eliminating the previous tax advantage for EV owners. The AA warns this change could deter potential buyers, particularly in the used EV market, and advocates for a discounted VED rate to support wider EV adoption. A trial by the Centre for Net Zero demonstrated that dynamic pricing can encourage EV charging during greener, cheaper electricity periods, benefiting drivers without home charging options by reducing running costs below those of petrol vehicles. Despite falling charging costs and innovations to promote greener charging behavior, the new tax policy presents a significant financial hurdle for EV users, potentially slowing the shift to electric mobility. Industry experts stress the need for balanced policies that maintain incentives while ensuring all drivers contribute fairly to road maintenance.