Drivers more likely to buy an EV if public charging costs less than petrol

Public charging costs fall below petrol for typical EV drivers

Public charging in the UK has become cheaper than petrol for most electric vehicle drivers for the first time in over a year. According to ChargeUK, the trade body representing public charging networks, a typical driver using standard public chargers now pays around 15 pence per mile. In comparison, petrol costs approximately 17 pence per mile and diesel about 17.5 pence per mile.

This shift matters because cost remains one of the primary barriers preventing drivers from switching to electric vehicles. For the estimated 40 percent of UK households without off-street parking, public charging represents the only practical option. Therefore, the price of public charging directly influences whether these drivers can afford to make the transition.

The change in relative pricing could prove significant for the UK’s electric vehicle rollout. However, the picture varies considerably depending on which types of chargers drivers use most often. Consequently, understanding the detail behind the headline figures becomes essential for businesses considering fleet electrification or employees evaluating their next vehicle purchase.

How the new pricing analysis breaks down by charger type

ChargeUK’s analysis examined different charging patterns to reflect real-world usage. Most drivers who rely on public charging use a mixture of charger types rather than exclusively one category. The organization found that charging costs depend heavily on this mix.

A driver using an 80/20 split between standard and ultra-rapid public charging would pay approximately 16 pence per mile. This reflects common usage patterns where drivers charge overnight or during working hours at slower chargers, then occasionally top up using faster units on longer journeys. Notably, this still comes in cheaper than petrol.

Only drivers depending exclusively on rapid and ultra-rapid charging would typically pay more than petrol, at around 21 pence per mile. These chargers deliver power at 50 kilowatts or higher, allowing significant range recovery in 20 to 40 minutes. However, they attract premium pricing that reflects higher infrastructure and grid connection costs.

Standard public chargers, by contrast, operate at lower power outputs between 7 and 22 kilowatts. These units take longer to deliver a full charge but cost significantly less per kilowatt-hour. Most are located in car parks, workplaces, or residential areas where vehicles stay parked for several hours.

The analysis arrives as the government conducts a formal review into public charging costs. Ministers launched this review in response to persistent concerns that charging prices could undermine electric vehicle adoption, particularly among drivers without home charging access. Furthermore, the Competition and Markets Authority has previously highlighted a lack of price transparency in the public charging sector.

Public charging prices have risen sharply since 2021

Despite the recent improvement relative to petrol, ChargeUK emphasizes that public charging costs have climbed substantially over the past three years. Prices have increased by 38 percent on average since 2021, driven primarily by rising wholesale energy costs and higher network charges.

Energy prices surged following Russia’s invasion of Ukraine in February 2022. Although wholesale costs have since fallen from their peak, they remain well above 2021 levels. Charging operators also face distribution network charges that have increased as electricity networks invest in capacity upgrades.

Additionally, public charging carries a 20 percent VAT rate, compared with just 5 percent for domestic electricity used for home charging. ChargeUK argues this creates an unfair disadvantage for drivers who cannot install home chargers. Specifically, this disproportionately affects people living in flats, terraced housing without driveways, or other properties without dedicated parking spaces.

The trade body has called on the government to address this disparity. Proposed measures include reducing VAT on public charging to match the domestic rate, reviewing the allocation of policy costs currently added to electricity bills, and reforming standing charges that apply to charge point operators regardless of usage levels.

These policy costs include levies that fund renewable energy subsidies, energy efficiency schemes, and social programs. Because charging operators pay these costs on a per-kilowatt-hour basis, they get passed directly to drivers using public infrastructure. Meanwhile, drivers who charge at home benefit from much lower per-unit costs.

Why charging costs matter more for some drivers than others

The commercial impact of charging costs varies significantly depending on individual circumstances. For fleet operators, the economics of electrification depend heavily on whether vehicles can charge at depots overnight using cheaper electricity tariffs. Similarly, employees considering salary sacrifice schemes need to factor in their likely charging patterns.

Home charging typically costs between 7 and 9 pence per kilowatt-hour on a standard domestic tariff. Specialized EV tariffs with overnight rates can bring this down to 5 or 6 pence per kilowatt-hour. Therefore, drivers with home charging access enjoy running costs well below both public charging and traditional fuel.

For drivers without this option, the charging mix becomes critical to the financial case. Someone who mainly charges at work or in public car parks during longer stays will see costs closer to the 15 pence per mile benchmark. Conversely, drivers who frequently use motorway rapid chargers could face costs exceeding petrol equivalents.

This creates particular challenges for businesses operating mixed fleets. Drivers who live in different types of accommodation will experience very different running costs for the same vehicle. Consequently, some organizations have introduced charging allowances or reimbursement schemes to ensure fairness across their workforce.

The pricing differential also affects decisions about vehicle choice. Electric vans and light commercial vehicles can deliver substantial savings for businesses with depot charging, but the case weakens for drivers who must rely on public infrastructure. As a result, total cost of ownership calculations need to account for realistic charging scenarios rather than headline figures.

What the current pricing environment means for businesses

Several practical considerations emerge from the latest pricing data. First, the falling cost of public charging relative to petrol strengthens the case for fleet electrification, particularly for businesses that can install workplace charging. However, organizations should model costs based on actual charging patterns rather than averages.

Second, the VAT disparity creates an additional consideration for employee policies. Businesses that provide charging facilities can help staff access the lower 5 percent VAT rate, creating a tangible benefit compared with public charging. This matters for recruitment and retention in competitive sectors.

Third, companies evaluating electric company cars should factor in local charging infrastructure. Areas with good coverage of standard public chargers offer better economics than locations where rapid charging dominates. Therefore, geographic variation in charging networks affects the business case differently across regions.

The government’s public charging review will likely influence future pricing structures. Potential interventions include VAT reform, changes to how policy costs are allocated, and possible price caps or transparency requirements. Each of these could materially affect the economics of fleet electrification.

Meanwhile, some charging networks have introduced subscription models that offer discounted rates for regular users. These can reduce costs for drivers who use public charging frequently, though they add complexity to expense management for business users. Fleet managers should evaluate whether these schemes offer genuine savings for their specific usage patterns.

Current position on public charging costs and policy

• Standard public charging now costs approximately 15 pence per mile for electric vehicles, compared with 17 pence for petrol and 17.5 pence for diesel, according to ChargeUK analysis.
• Drivers using an 80/20 mix of standard and ultra-rapid charging pay around 16 pence per mile, while those relying exclusively on rapid chargers still face costs of about 21 pence per mile.
• Public charging prices have increased 38 percent on average since 2021, driven by higher energy costs and network charges that operators pass through to drivers.
• Public charging currently attracts 20 percent VAT, while home charging benefits from a reduced 5 percent rate, creating a significant cost difference for drivers without off-street parking.
• The government has launched a formal review into public charging costs amid concerns that high prices could slow electric vehicle adoption among the estimated 40 percent of households without home charging access.
• ChargeUK has called for policy reforms including VAT harmonization, standing charge reviews, and reallocation of policy levies currently added to electricity costs.

How businesses should approach charging cost planning

Organizations considering fleet electrification need to build charging costs into their total cost of ownership calculations. The first step involves mapping where and how vehicles will charge in practice. This means looking at driver home locations, journey patterns, and available infrastructure rather than relying on average figures.

For businesses with suitable premises, installing workplace charging infrastructure can deliver significant savings. Even basic 7 kilowatt units provide enough charging for most daily driving patterns. Moreover, workplace charging attracts business electricity rates and the lower 5 percent VAT, making it substantially cheaper than public alternatives.

Fleet policies should also address reimbursement for drivers who must use public charging. Some organizations pay a flat mileage rate that covers electricity costs, while others reimburse actual charging expenses. Each approach has advantages, though actual cost reimbursement provides more accurate data on charging patterns and costs.

The changing price environment also affects decisions about vehicle range. Higher-range vehicles reduce the need for rapid charging on longer journeys, allowing drivers to rely more on cheaper overnight or workplace charging. Therefore, the additional cost of larger batteries may deliver savings through reduced charging expenses.

Businesses operating in sectors with public sector supply chains should note that carbon reporting and net-zero commitments increasingly influence procurement decisions. Electric fleet vehicles contribute to Scope 1 emissions reductions, which can strengthen tender responses. However, organizations need accurate data on actual emissions and costs to demonstrate credible progress.

Policy developments affecting public charging economics

The government’s review of public charging costs reflects broader policy tensions around the electric vehicle transition. Ministers face pressure to ensure charging remains affordable while also recovering the costs of grid upgrades needed to support growing electricity demand. These competing priorities will shape future pricing structures.

Several potential policy changes could affect charging costs. VAT harmonization between public and home charging would reduce costs for drivers without off-street parking. However, this would also reduce Treasury revenues at a time when fuel duty income is already declining as more drivers switch to electric vehicles.

Similarly, reforms to standing charges and policy levies could reduce the fixed costs facing charge point operators. This might encourage more competitive pricing, particularly for standard chargers where margins are tighter. Nevertheless, these costs must be recovered somewhere, meaning reforms could shift expenses to other electricity users.

The Competition and Markets Authority continues to examine competition in the public charging sector. Its previous interventions have focused on price transparency and reducing barriers to new market entrants. Further regulatory action could include requirements for clearer pricing information or interoperability standards that allow drivers to use multiple networks through a single payment method.

Local authorities also influence charging availability and pricing through planning policies and on-street charging programs. Some councils have introduced requirements for new developments to include charging infrastructure, while others are deploying charging points in residential streets. These initiatives affect where drivers can access cheaper charging options.

Where to find detailed guidance and official data

ChargeUK publishes regular analysis of public charging prices across different charger types and regions. Their reports provide the most comprehensive data on charging costs and usage patterns in the UK market. The organization represents major charging networks and infrastructure providers.

The Department for Transport oversees electric vehicle policy and publishes statistics on charging infrastructure deployment. Its website includes details of the public charging review and related policy consultations. Additionally, the department provides guidance on workplace charging grants and other support schemes.

For businesses evaluating the emissions impact of fleet electrification, the Department for Energy Security and Net Zero publishes official conversion factors for carbon reporting. These factors account for grid electricity emissions and allow accurate calculation of Scope 1 and Scope 2 emissions from electric vehicles.

The Competition and Markets Authority maintains information on its investigation into electric vehicle charging. This includes analysis of pricing practices, competition concerns, and recommendations for market improvements that may affect future charging costs.

Organizations seeking practical support with carbon reporting and net-zero planning can access structured guidance through programs designed for UK businesses navigating emissions reduction requirements. These resources help companies build accurate cost models and compliance frameworks for fleet electrification and wider sustainability commitments.