Electric vehicle charger firms have warned soaring energy bills will have to be passed on to drivers, risking a major setback for the government’s green goals.
Charging companies are being saddled with massive network charges that have increased by an average of 462% over the past three years, industry body ChargeUK has found.
They have warned charging companies may have no choice but to pass on the cost to drivers, which could put some people off buying an electric vehicle (EV) and place the government’s plan to ban petrol and diesel car sales by 2030 at risk.
One company reported a 38,000% rise in its annual fixed charges since 2021.
Politics latest: Starmer holds COBRA meeting about Iran war impact
Opposition parties have told Sky News the government needs to change its levies and policies on electricity if it wants to reach its goal of weaning the UK off oil and gas and ease the cost of living.
Energy regulator Ofgem changed how standing charges – which pay for network maintenance and upgrade work – apply to businesses in 2023 to try to stop large firms from gaming the system.
Govt reviewing flagship EV sale quotas after biggest car production fall in 73 years
Greens pile pressure on Ed Miliband to end ‘rigged energy system’
Government looking at decoupling electricity and gas prices to bring down bills
This means energy bills for businesses are now mainly made up of fixed standing charges, determined by Ofgem, instead of consumption.
But EV charging companies say this has unfairly targeted them because they are being charged to have a large connection to the energy grid to deliver sizeable amounts of power in the future, but there are currently not enough EVs in the UK to use the available power.
Charges plus lower quotas will ‘slam the breaks on investment’
The government’s plan to boost the number of EVs is reliant on there being enough chargers, with ministers setting a target of 300,000 public chargers by 2030.
Vicky Read, chief executive of ChargeUK, told Sky News the changes to standing charges is a “major factor” in pushing up prices for EV drivers and, coupled with carmakers calling for EV sales quotas (the ZEV mandate) to be reduced, this would “slam the breaks on infrastructure investment”.
Read more:
Government reviewing flagship EV sale quotas
Nearly one in four people are buying electric vehicles
An Osprey Charging site in Wolverhampton has reported a 38,570% increase in its annual fixed charges since 2021, from £87 to £33,651 this year.
Ian Johnston, chief executive of Osprey Charging, said businesses like his are investing hundreds of millions of pounds to build critical infrastructure “at scale years ahead of demand”.
“Our ultra-rapid charging hubs require very large grid connections to build for the peak demand we will see in the future, but we’re having to pay in full for those large grid connections today,” he said.
“With only 5% of cars on the road currently being fully electric, we’re being made to pay for grid access that we aren’t using and that we can’t yet recoup the investment on.”
Sky News reported on Sunday that ministers are reviewing the government’s EV sales quotas placed on carmakers, after 2025 experienced the lowest vehicle production in the UK since 1952.
This could have a detrimental effect on the EV charging companies, which are reliant on there being a growing number of EVs on the road.
The government is also reviewing the cost of public EV charging and the impacts of energy prices.
‘Reduced costs will help sell more EVs’
ChargeUK’s Ms Read added: “Government has an opportunity now as it reviews both the cost of public EV charging and the ZEV mandate, to deliver a win for everyone.
“Reduced costs for charging operators and lower prices for EV drivers, which will make driving electric affordable for millions more people and help automakers to sell more EVs and meet the mandate.”
‘Labour is choosing to make electricity more expensive’
Claire Coutinho, Conservative shadow net zero secretary, told Sky News: “Labour say they want to get people off oil and gas but they are the ones choosing to make electricity more expensive.
“The biggest driver of costs is now not the wholesale prices of fuel but the levies and policy costs that government charges on top.
“We have a simple view: if you want people to use electricity to heat their homes or drive their cars, you have to make electricity cheap. That’s what our Cheap Power Plan to cut energy bills by £200 would start to do.”
Scotland’s largest ultra-rapid EV charging station, at the Palace Grounds retail park in South Lanarkshire, has standing charges of £41,000 a year – nearly four times the rent of the site.
Tom Hurst, UK country director of Fastned, which owns the site, said: “Even though the station is powered by 100% renewable energy, these fixed costs, combined with higher VAT on public charging and rising wholesale energy prices, ultimately feed through to drivers.
“We absorb as much of these costs as possible to keep prices down for drivers, but policy action is needed.”
Government ‘needs to reconsider standing charges’
Pippa Heylings, Liberal Democrat spokesperson for energy and net Zero, said: “Up and down the country, families are making impossible choices as the cost of living crisis continues to bite.
“Astronomical hikes in EV charging costs must not become yet another burden on already stretched household budgets.
“The government must do the right thing by upholding the reduction of VAT on public charging to 5% and reconsider standing charges to give drivers the reassurance they urgently need.”
A government spokesperson said: “Decades of historic underinvestment means our outdated electricity infrastructure is in need of upgrading.
“We are tackling this with a programme of investment, reform and sweeping change to the grid connections process.”
