In I Dream of EV, potentilla says:

I would be interested to know whether charging at home in the UK is really “still good value” compared with gasoline or diesel if the equivalent fuel taxes were applied to electricity.

So would I. potentilla quotes this from The Guardian:

“Despite recent falls in the price of petrol and diesel, the cost of charging at home is still good value compared to paying for either fuel, but again underlines just how the rising cost of electricity is affecting so many areas of people’s lives.
“We’re also aware that public chargepoint operators are having no choice but to increase their prices to reflect the rising wholesale costs they’re faced with, which will heavily impact drivers who have no choice other than to charge up away from home.”

Well, it was time for me to revisit my calculation of which was cheaper: petrol or electricity? My conclusion a year ago, based entirely on useful energy at the wheels, was that electricity was 50% more expensive than petrol pre-duty and VAT, and that all in, petrol was 33% more expensive than electricity. But that was then. What is the situation now?

Setting forth to gather the numbers for a new calculation, I suddenly realised that I already had part of the data that I needed because I had gathered it for another of my interminable anti-EV rants, Slips the Green Halo.

[I am not of course anti-EV. I’m anti banning ICE. There is a distinction.]

In that post, the reader will remember, I reported on Volvo’s lifecycle analysis comparing two different versions of its XC40 – an electric one and a petrol one. The EV started out in more “carbon debt”, if you’ll excuse the horrible phrase, but caught up as the ICE car burnt more and more fuel, until each was as bad as the other after both had driven 90,000 km or so. (Based on the EU’s electricity mix.)

As the EV retails at £20,000 more than the ICE, at least a few of its new owners would be hoping for some savings on running costs. And so far they have had them – although as we never tire of pointing out, this is a situation that only pertains because of the duty that is slapped onto petrol.

BASIC DATA – FUEL AND ELECTRICITY COSTS

Petrol has gone up a lot lately – for our international readers, it was about £1.30 per litre when I made the relevant calculation a year ago. It capped out here a month or so ago when a few retailers were shamefacedly writing numbers like 200.9p on their forecourts. It has climbed down from those vertiginous heights and in this neck of the woods its average cost today (27/viii/2022) according to Confused.com is £1.704.

Working back from VAT downwards: ex VAT, the cost is £1.42 per litre. Knock off the duty (presently 52.95p per litre) leaves you with £0.8905 per litre base cost.

There are two ways to obtain electrons for your EV – you can plug it in at home and take advantage of domestic rates of electricity and 5% VAT, or go to a public charger and bear the commercial markup and the 20% VAT.

Domestic: On this day (27.viii.2022) Ofgem says that the price cap rate – which is in effect the price everyone in the UK not lucky enough to have obtained a fixed deal some while ago is paying – was £0.28 per kWh. The figure includes the 5% VAT. So ex-VAT, it’s £0.267 per kWh.

Commercial: There is nearby to your present author a much-vaunted charging station run by an outfit called Gridserve. At their premises it is possible to plug in for a rapid charge and retire aloft for a holy moccachino. On the Zap Map website, there is mostly high praise for Gridserve, with apparent power flows of over 100 kW for suitable machines. Their fee? £0.45 per kWh, including 20% VAT. The number leads this cynic to speculate that they are operating at a loss in order to build a customer base. Ex-VAT, it’s £0.375 per kWh.

CAR DATA

The car data mostly comes from Volvo. There are two values for energy use per km for the EV, one from Volvo and a slightly less flattering one from ev-database. Tankheim.com provides a larger figure for the ICE range than I calculate based on the CO2 emissions per km, so there are two figures for that too.

EV: The battery is 78 kWh, and depending who you ask, it either uses 240 Wh/km (Volvo) or 357 Wh/km (ev-database). The book range is therefore 325 km from 100% to empty and the range calculated based on the ev-database figure is 218.5 km.

ICE: the tank is 54 l, and the range calculated based on the book 163 g CO2/km is 775 km. The Tankheim given range is 1054 km. Perhaps the difference here and for the EV represents ideal vs real conditions, I’m not sure.

CALCULATIONS

So, we are now ready to make our calculation. This will give a cost in pence per km for each vehicle for both range scenarios, and for the EV, for the two charging scenarios. We just take the cost to brim the tank/battery from empty and divide by the estimated range.

  1. PRE DUTY AND VAT

The cost to brim the ICE from empty is £48.09. Remember, this is ex duty and VAT. To brim the EV from empty at Gridserve is £29.25, and at home, it’s £20.80. With the different range estimates, here’s how that looks in pence per km:

The most pessimistic scenario for the ICE beats the most optimistic scenario for the EV. Conclusion: without duty and tax, petrol is cheaper than electricity.

2. POST DUTY AND VAT

To brim the ICE is now £92.02. To brim the EV at Gridserve is £35.10. At home, it’s £21.84. Here’s how that looks in pence per km:

There is some overlap, but the cheapest scenario is domestic charging if the book range is obtained. Even with duty and taxes, there is no advantage if the EV driver has to use the commercial charging service. Conclusion: domestic charging of the EV looks to be the marginal winner – but only because of government policies.

3. THE FUTURE

The new energy price cap comes in on the 1st October. The price may be seared into UK citizens’ minds, but for our international readers, the price we will pay is £0.52 per kWh. (I know. I hardly believe it myself. But these are the days we live in.) So how will the domestic charging cost shake out in six weeks’ time? It will then cost £40.56 to brim the EV at home. In terms of how that looks in pence per km? The professional-eyed among you will have noticed a couple of red dashed lines in the second column chart. These show the cost per km for home charged EVs after 1st October. Assuming that the petrol price does not begin to rise again, domestic charging will be more expensive than filling up the ICE car at the pump, even with the most pessimistic range for the ICE and the most optimistic range for the EV. (12.5 p/km for the EV vs 11.9 p/km for the ICE.)

THE FINAL INSULT

The duty on fuel and the VAT on top can be seen as a carbon tax. How much does it work out at in terms of £/tC emitted, I wondered? Here is that calculation:

The density of petrol is approximately 0.755 kg/l. Using decane as an example species gets you 0.638 kgC/l. [The rest being H.] Therefore, for every 0.638 kg of carbon emitted, us unreconstructed ICE drivers are paying 81.35 p in duty and tax (that number is the difference between the pump price and the price without duty and VAT). It is easy to see that it is more than a pound per kilo C emitted, which is therefore more than a thousand quid per tonne of C emitted. In fact, it’s

£1275 PER TONNE C EMITTED

This service is brought to you by the department that also invented the asinine “levelling up” slogan. You’re welcome.

CAVEAT EMPTOR

Please alert me if I have made an error in calculations. I have laid these out as clearly as possible so that it is possible for the reader to check my homework. Note that the carbon tax calculation does not take into account the fact that our petrol is now mostly “E10” – that is to say, 10% bioethanol. I think including it would make the calculation worse. EVs may be less expensive to maintain than their ICE brethren. The XC40 is not the smallest car available, so these costs in pence per km are on the high side, both for the EV and the ICE.

[CAVEAT ADDENDUM: As Mikehig points out in comments, time of use tariffs are available that offer very good rates of electricity at unearthly hours, i.e. when there is no demand. Such tariffs will no doubt trump the cost of petrol, even in the brave new world of October 1st.]

There seems to have been a boom in solar panel sales. Naturally the best solution all round would be to have a nice detached house with a car port, on which one could affix solar panels that would charge an EV with free electricity. It would be your second car, of course! Unfortunately this solution is not available to the majority of the people of the UK.

16 Comments

  1. Jit, thanks for that. The calculations look robust to me, but then maths was never my best subject.

    You’re right to highlight what will happen to electricity prices on 1st October, but it’s also worth reminding readers that the UK from now on is to face 3-monthly, rather than the pre-existing 6-monthly, reviews of the price cap. The “smart” money says electricity prices will rise sharply again on 1st January 2023, and once more on 1st April 2023. At that point (barring government interference via duty or subsidy changes, and barring also an upward movement in the price of oil), EVs will be an even worse option than they are now, -v- ICE vehicles.

    It’s also worth making the point (collateral to that made in your article, but relevant if one wishes to view these things holistically) that the UK is already facing the possibility of blackouts this winter, with a tiny proportion of the population using EVs. Imagine how much worse the situation will be if we’re all made to drive EVs. Either there’ll be semi-permanent blackouts and/or nobody will be able to drive anywhere because they won’t be able to access electricity for their vehicle – especially with smart meters in charge (as we sceptics said, smart meters, rolled out at massive cost, were never about enabling consumers to monitor their power usage).

    Liked by 1 person

  2. Slightly O/T, but you did mention E10:

    “E10: Drivers urged to check new petrol compatibility”

    https://www.bbc.co.uk/news/uk-northern-ireland-62706851

    “Petrol car drivers in Northern Ireland are being advised to check their vehicle’s compatibility with a less polluting type of petrol, which is being rolled out from Monday.

    The move brings Northern Ireland into line with the rest of the UK.

    E10 petrol was introduced in Great Britain in September 2021.

    It contains up to 10% ethanol, a renewable ingredient the government said would help reduce transport carbon emissions by producing less carbon.

    Ninety five percent of cars are compatible with the new greener fuel, which doubles the amount of ethanol used in the current mix….

    …Ethanol is a biofuel made from what are called renewable agricultural feedstocks – like soybeans, sunflowers, certain types of trees and other crops…”

    I fail to see how this is either sensible or “green”.

    Liked by 1 person

  3. Mark, regarding E10, I have not quite understood why, if this is so good for the environment, we have until lately still been paying the same duty on E10 as we were the unadulterated stuff. By which I mean the duty should have been cut 10% if petrol is now 10% bioethanol.

    I don’t think we will have blackouts this winter – it’s possible, but I think unlikely. In some ways a little medicine in that regard might be good for us. A presentiment of things to come, you might say.

    I might pen something with advice about what to do in an extended power cut. Not that I have made any preparations for such an event myself.

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  4. Oh, and regarding the October 1st price cap and subsequent increments: I would be surprised if the October 1st price cap is enacted as planned. As to the subsequent increments in January and April – I don’t really see how a government would survive them, so I’d be very surprised if the stated prices do materialise.

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  5. Jit; your analysis uses a typical domestic tariff for electricity. From reading EV forums it’s clear that most EV owners sign up to the special overnight tariffs from Octopus and others. That used to cost them 5 pence per kWh but has recently gone up to 8.5 pence.
    Secondly, while I realise you are comparing fuel costs alone, the clincher for many EV buyers/users is the huge tax benefit which saves them many thousands of pounds per year compared to an ICE company car.
    Here’s a thread from a dedicated EV forum which has lots of real-life experiences:
    https://www.pistonheads.com/gassing/topic.asp?h=0&f=247&t=1989269

    Liked by 1 person

  6. Thanks Mike – the existence of time of use tariffs was certainly an oversight of mine. I’ll amend the blog post to add another caveat to the list.

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  7. Mikehig, you make fair points, but of course what it amounts to is a rigged market and tax rules to boost use of EVs. With a level playing field, ceteris paribus, EVs wouldn’t even be on the radar for most people.

    Like Jit, I’m not opposed to EVs per se (though there are environmental issues associated with lithium mining etc). I’m sure they are the appropriate vehicle for some people, e.g. townies who only use a car for a weekly shop or daily short commute or whatever. Again, like Jit, however, I oppose the manipulation of the market by carrot and whip, high taxes on ICE vehicles (and an ultimate ban on new sales) and tax breaks for EVs, to push us into using what, for most of us, is a less useful, and less appropriate, product.

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  8. Mark, I’m with you on this! In my view EVs should just be another vehicle option.

    There is an argument that it is good to remove vehicle pollution from towns and cities but even that is tenuous because modern cars are so clean anyway.
    That website I linked to has some lively debate going on about the impact of the huge increases in the cost of power. The balance has probably swung back to ICE for those who can’t charge at home (ignoring business users who get the tax breaks).

    Jit, there’s also a fundamental flaw in that analysis from Volvo. It uses typical grid mixes to calculate CO2 emissions. However, in the UK at least, a new EV is an incremental demand and all renewable volts are already spoken for as they are prioritised onto the grid. So the additional power will come from the incremental producer – probably gas, possibly coal.

    I have read about that Gridserve charging station. It has a special arrangement with the Grid and a renewables supplier which allows the output of solar/wind to be “sleeved” to the site, as if there was a dedicated cable. It also has battery storage (6 MWh, iirc) as back-up, overnight supply and peak-shaving.
    So it is paying production cost for the power, not market rates, and is thus able to sell at those “below market” rates.
    I suspect Octopus is pulling the same trick with their tariffs.

    Liked by 1 person

  9. “Electric Car Journeys to Cost More Than Diesel by January”

    https://dailysceptic.org/2022/08/31/electric-car-journeys-to-cost-more-than-diesel-by-january/

    …From October 1st, for an EV doing four miles per kWh, it will cost just under 13p per mile compared to a small diesel car achieving 60 miles per gallon which would cost just over 14p per mile. However, by January 1st that same EV will be costing almost 20p per mile, a higher cost per mile than a car doing 50 miles per gallon. By April 2023, the EV will be costing over 24p per mile, so not only more expensive than a diesel car achieving 50 miles per gallon but also more expensive than a diesel doing 40 miles per gallon and costing just under 22p per mile.

    Of course, these electricity prices are based on home prices. If you recharge your car out and about the cost per kWh is about two or three times as expensive as your electricity at home. Currently, if 25% of the electricity you buy for your EV comes from commercial suppliers and 75% from your home supply you’ll already be spending about the same as a diesel car driver. This means even if the current rise in electricity prices is temporary, there are still questions to be asked.

    Clearly, there are other cost considerations for the EV buyer. If the EV is a company car there’s still a very significant benefit in kind impact. There are also road tax, congestion and depreciation impacts. But just looking at the fuel cost illustrates that the premise on which many EVs were purchased is proving to be a false one.

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  10. Mark; that analysis is based on the standard domestic tariff of about 50p per kWh.
    A little research would have shown the author that the overwhelming majority of EV owners who can charge at home are on the special tariffs from the likes of Octopus so their costs are far lower. The present deal is 7.5p overnight although many users are still on the old 5p rate which means 1.3p per mile!
    Yes, they do pay proportionately more for daytime consumption but the extra cost is far outweighed by the overnight savings.
    Those who have to use public chargers do pay far more but, afaict, they are mostly business users so fuel costs are secondary to the tax savings.

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  11. Mike, fair comment, and thanks for the corrective. I posted it here because it’s relevant. However, while there are some excellent posts at the Daily Sceptic, we sceptics must remember to be sceptical about aspects of its scepticism!

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  12. Mark, in cases like this I do often wonder if the other articles are equally flawed but, having zero knowledge, I accept them verbatim. I think there’s a name for this!

    Liked by 1 person

  13. “Soaring energy costs could threaten future of electric cars, experts warn
    Industry bosses in Germany say high costs are having an impact on vehicle production and sales”

    https://www.theguardian.com/environment/2022/sep/12/soaring-energy-costs-could-threaten-future-of-electric-cars-experts-warn

    Soaring energy costs are threatening the future of the electric car, industry bosses in Germany have warned.

    A rise in electricity prices as well as in raw material costs and availability, a chronic shortage of parts, and a widespread reduction in disposable income are having a considerable impact on the production and sales of cars.

    If the trend continues, there is also concern that there will be a knock-on effect on investors who will lack incentives to build charging facilities, making electric cars less attractive – because they would be more impractical – to run.

    Until recently ownership of electric cars had been gaining in attractiveness as the cost of petrol rose. But since recent rises in electricity prices – in Germany of around a third compared with a year ago – the price differential has shrunk.

    Electric car owners, whether charging their cars at home or through contracts with charging operators, have seen price rises of 10% or more. Further price rises are expected, owing to the fact that the price of electricity is linked to that of gas, which has become ever scarcer since Russia turned off its gas supplies to Germany almost two weeks ago.

    Allego, one of Germany’s largest charging station operators, raised its prices at the start of this month from 43 cents a kilowatt hour to 47 cents. Express charging, via a continuous current, has risen from 65 to 70 cents a kilowatt hour while the fastest, so-called ultra-fast charging, has gone up from 68 cents to 75 cents a kilowatt hour.

    Discount supermarkets, DIY chains and furniture stores which had until recently offered customers free charging while they shopped are now introducing charges.

    According to the automobile economist Stefan Bratzel, the development is an immediate threat to the industry….

    What an irony – EVs may fail because the rising cost of electricity, driven by an obsession with net zero, means that they are too expensive to make and too expensive to run (even with the favourable tax treatment and subsidies they receive).

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  14. Mark, perhaps as mentioned above by Mike some folk will have access to time of use tariffs and can charge cheaply in the middle of the night. But for most Germans, keeping the old clunker going is going to be the best option, until the government adds enough tax onto the price of petrol to make electricity look like a bargain.

    It’s easy to be wise after the event, but I suppose the lessons are i) don’t depend on a dictator for anything; and ii) don’t remove any firm generation until it has been replaced by firm generation.

    Both lessons are something that the UK could do to learn.

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