Andy Burnham's new driveway rule change, introduced this October, has created a 12.9p per mile gap between home and public electric vehicle charging costs, with one group of drivers set to pay more.
The Prime Minister slashed VAT rates on domestic electricity on October 1, with fees cut from 5% to 0%. This has had a knock-on effect on motorists who charge their electric car at home, with the total cost of topping up batteries set to fall.
Home Charging Costs Fall
According to data from costpermile.co.uk, the new VAT cut means those topping up their cars on a driveway with a smart tariff in place are now paying as little as 7p per kWh, or 2p per mile.
However, millions of motorists don't have access to their own driveway or off-street parking space, forcing many EV owners to top-up in public.
Public Charging Still at 20% VAT
ChargeUK, the EV charging trade association, has suggested as many as 10 million households cannot charge a vehicle at home. Mr Burnham decided not to slash VAT rates on public charging, which still remains at 20%.
Every single kilowatt-hour drivers buy carries a much higher VAT rate, hiking total fees.
Cost Gap Widens
Experts at costpermile.co.uk reveal that a typical retail park will tend to charge around 52p per kWh. Further analysis shows motorists topping up at retail parks or supermarkets will therefore pay closer to 14.9p per mile.
It means that the difference between home vs public now sits at 12.9p per mile in a blow to road users.
Road users exclusively topping-up their cars at ultra-rapid public plugs could pay even more, with fees closer to 79p per kWh or 22.6p per mile.
Labour's VAT plan has been welcomed by many in the industry, but the plan has still raised some concerns.
Tom Preston, Chief Executive Officer at Hippo Leasing, previously warned that Mr Burnham's decision to cut VAT on domestic electricity over public chargers had cost some drivers hundreds of pounds. He suggested that if Mr Burnham opted to equalise public charging VAT at 5%, high-mileage EV drivers topping up at bays could have saved £389 a year.
Tom said: "The current 20% VAT rate on public EV charging effectively penalises motorists who don't have a driveway. Right now, it costs more to plug in on the street than it does at home, and that's exactly backwards for the drivers who don't have a driveway, often the ones we most need to bring into EVs."
