As the cost of living continues to increase across the country and fuel prices continue to rise, driver’s attentions are firmly placed on what this means for them - with this unprecedented steep rise in electricity costs leaving some EV drivers questioning the cost per mile of driving.
How will rising energy prices affect electric vehicle drivers?
For EVs, charging has already started to get more expensive. Public networks BP Pulse and InstaVolt announced price rises in November to cover the cost of energy and HMRC has increased the Advisory Electric Rate (AER) from 4p/mile to 5p/mile for the same reason.
Unfortunately, with the higher price cap for domestic energy, the AER might not be enough to cover the additional costs if drivers are on a default tariff.
For a typical mid-size electric vehicle, averaging 3.5miles per kilowatt-hour, the energy price cap amounts to an annual increase of £274 – a 51% increase, compared to the 2021 average of £181, based on 10,000 miles of driving. It could also leave some company car drivers out of pocket.
The best thing you can do now is shop around for lower-priced, or even free, charging networks as there are huge variances in the market. Charging en route will always be more costly for drivers than the 5ppm AER rates so careful route planning in addition to following manufacturer guidelines around optimising your vehicle mileage performance is key.
Pre-condition your vehicle so it’s programmed to warm or cool itself to a comfortable temperature before you get in, and plan your journey effectively to make use of free of charge or lower cost charging en route. For example, charging your vehicle free of charge at a supermarket while doing your weekly shop will help lower costs below 5ppm and offset the costs of higher priced charging networks.
Balancing the books
As the cost of electric continues to rise, so too does the cost of crude oil as the government pledges to no longer rely on Russian oil in the wake of the Ukrainian invasion, forcing the cost of diesel and petrol to increase.
Fleet managers have always considered the Whole Life Costs (WLC) of vehicles when advising their drivers and building policies looking at not only the monthly lease cost, but also fuel and taxation costs related to running a company car. With running costs of both EV and ICE vehicles increasing, this is now even more important for fleet managers to discuss their fleet policy with their relationship manager to ensure drivers aren’t paying unnecessary costs.
And this is where electric vehicles storm ahead proving to be very cost effective for many, as with their lower tax considerations also including their lack of emissions, they prove to be better value for money for drivers and businesses, enabling them to drive their WLC value and BIK commitments down, representing a cheaper and, of course, greener alternative.
At Lex Autolease, we are considering the option of removing fuel from our customer’s WLC policy while this volatility remains in the marketplace. We will be monitoring the situation closely to ensure we are offering the best advice and value to our customers.
What can EV drivers do to soften the blow?
Drivers who are concerned that their vehicle may become a black hole in their bank accounts should take into account two simple and important things they can be doing to lessen the impact of rising prices.
Opting to charge your car from home overnight will allow motorists to take advantage of off-peak charging times when costs are down should drivers enjoy a reduced off peak tariff. On average an electric vehicle can charge from completely flat to 100% in around 9 hours. By committing to a set charging schedule at the end of the day means paying less for the same energy.
Planning ahead is now even more important too. Each use of your car means using power that needs to be replaced. By planning your day, you can avoid taking multiple trips, instead making one continuous journey rather than a lot of little trips throughout the day. Although this may sound simplistic, being mindful of these smaller rides can have a major impact on power usage, making big cost savings over time.
With all of this in mind, your dedicated relationship manager is here to guide you through this uncertain time and help you make the best choices for your fleet. You can also learn more about the changes to energy prices and what else you can be doing to avoid unnecessary costs by clicking here.