The electric car dream turned toxic

The promise of affordable electric vehicle charging has not materialised, raising questions about why the nation’s infrastructure has not kept pace with government commitments. Market leader Instavolt highlights that the high cost of establishing grid connections poses a challenge to at-home charging, its most significant competitor.

Government policy shifted sharply more than a decade ago, moving from encouraging diesel vehicles to promoting electric ones following the 2015 “dieselgate” scandal. The expectation was that zero-emission vehicles would not only enhance public health but also be cheaper to operate, benefiting from readily available lower-cost electricity. However, drivers are now reporting costs as high as 89p per kWh at public charging stations, equating to petrol prices prior to recent spikes linked to geopolitical tensions.

Efforts by private companies to develop a national network of ultra-rapid charging stations without government funding or mandated encouragement have been notably slow. Delvin Lane, Chief Executive of Instavolt, aims to clarify the evolving economics surrounding this essential infrastructure. Current data indicates around 80,000 charging points exist in various forms across the country, with approximately 27,000 classified as ultra-rapid chargers. The demand for quick top-ups of less than ten minutes is evident among motorists.

Lane observes an irony in the fact that the majority of electric vehicle drivers, about 80 per cent, have the capability to charge at home. Night-time home charging costs between 7p and 10p per kWh, significantly lower than the 89p charged at public ultra-rapid stations.

A primary issue revolves around the controversial 5 per cent VAT on domestic electricity and the full 20 per cent applicable to public charging points. This discrepancy implies that nearly 18p of every kWh on the road is allocated to the Treasury. Cost factors also weigh heavily on charge point operators. According to Lane, the installation and connection costs to high-voltage grids are burdensome.

Instavolt mentions that the average cost of installation for a charger ranges between £60,000 and £70,000, which can double if high-voltage connections are required. Breaking down these costs reveals that about a third is allocated for the charger technology, a sixth for groundwork, and the remaining half for connection to the high-voltage grid, cabling, and standing charges imposed by power distribution network operators.

As rising costs of electricity take their toll, Instavolt reports that for every £1 paid to the power company, 40 per cent is attributed to electricity costs, while the rest is tied to standing charges and green tax levies. Since charges are increasing to counterbalance grid modernisation and to support renewable energy connections, the profit margins for charge point operators are narrowing.

In response to grid connection challenges, Instavolt invests in large-scale battery storage facilities at its sites, often complemented by solar installations. Lane suggests that in areas lacking sufficient grid capacity, batteries represent a long-term solution.

Currently, the charging industry finds itself at a crossroads, facing potential consolidation as companies merge or exit the market. Lane also notes that while the government has taken positive steps to promote electric vehicles, inconsistencies in policies related to VAT rates and grid access hinder progress. Challenges persist since the commitment made in 2017 to phase out internal combustion engine vehicles by 2040 remains uncertain, with industry experts expressing concern over necessary technology and infrastructure being absent.