Andy Burnham's new driveway rule change, introduced earlier this week, could save road users as much as £14.90, according to experts. The move, which slashes VAT rates on domestic electricity costs from 5% to 0% from October 1, is designed to help billpayers but will have a knock-on effect for electric car owners topping up their batteries at home.
Savings for EV drivers
New analysis from MoneySuperMarket has revealed drivers will save less than £15 over the next six months. Alicia Hempsted, Car Insurance Expert at MoneySuperMarket, said: “Though the savings will be modest for most, at just under £15 depending on their tariff, the six-month VAT cut on household electricity is welcome news for EV drivers who can charge their vehicles at home. However, public charging will continue to have 20% VAT applied.”
MoneySuperMarket explained that the average EV driver covers 8,130 miles a year, or 4,065 miles across the six months of the planned VAT cut on electricity. Using HMRC's average electric car efficiency of 3.59 miles per kWh, the average EV driver will use roughly 1,132 kWh of electricity charging at home over the next six months.
Cost breakdown
Under Ofgem's price cap, the average electricity unit rate from October 1 is 26.32p per kWh with no VAT. Had the 5% VAT charge still applied, the fee would be 27.64p per kWh. According to the experts, for the average EV driver, charging at home will now cost £298.02 over six months, down from a possible £312.93. This would work out at a saving of £14.90 or the equivalent of 194 miles of free driving.
Alicia told The Express: “For drivers who don't have access to home charging, it's worth shopping around. Some charge point operators offer cheaper off-peak rates, which typically run between 8am and 11am and 4pm and 10pm, while slower chargers can often work out cheaper than rapid charging if you're not in a hurry. Regular users may also find that a charge point operator's subscription plan helps reduce the cost per kWh.”
