The Russian invasion of Ukraine has had many widespread and unaffected side effects, even in the motor finance sector. For instance, a Freedom of Information request from the security control validation platform, Picus Security, revealed a steep rise in Distributed Denial-of-Service (DDoS) attacks reported to the City regulator, the FCA. These attacks formed 25% of reported cyber incidents in the first half of 2022, compared to just 4% in 2021. Picus has argued that these attacks are the work of nation-state attackers and political hacktivists using “carpet-bombing” DDoS attacks to target UK financial institutions.
“UK financial institutions are in the crossfire of the ongoing war between Russia and Ukraine and have become a direct target for nation-state attackers and hacktivists seeking to disrupt Ukraine’s allies,” said Dr Suleyman Ozarslan, Picus Security Co-Founder and VP of Picus Labs.
Of course, the other big fallout from the war across Europe has been rising fuel and energy costs. Vehicle lifestyle management software provider, Solera Holdings LLC, has released research showing that fuel costs are the number one challenge concerning European fleet leaders heading into 2023. Over half of fleets (76%) have said their fuel costs have increased in the past six months, with oil prices set to rise even higher next year.
The price of public charging
These prices might be seen as further impetus to switch to electric vehicles, but the EV sector is already feeling the pressure. The cost of charging an electric car, on a pay-as-you-go basis at a publicly accessible “rapid” charger has risen by 42%, or 18.75pm per kilowatt hour, since May, according to new data from RAC Charge Watch. This leaves prices at an average rate of 63.29p per kilowatt hour. Putting that in context, rapid charging a typical family-sized electric car with a 64kWh battery to 80% now costs an average of £32.41, £9.60 more than it did in May and £13.59 more than it would have done a year ago.
Public, rapid charging points are the places where the price rise has been most expensive, and drivers are working around that.
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“We find that our drivers take advantage of slower, more cost-effective (or free in some cases) charging where they can, as many places including shopping centres, restaurants and leisure complexes are installing chargers for customers to use while they are there,” says Paul Gilshan, CEO of salary sacrifice and company car provider, Tusker. “We hear that those already driving an EV are shrewd about charging just as an ICE driver would be about where to buy petrol or diesel. They know where the most cost-effective charging is available and will build this into other activities.”
Gilshan is right that a large proportion of current electric car drivers will prefer to charge at home where electricity is cheaper, and the Energy Price Guarantee means that the cost per mile for an average-sized reasonably efficiently driven EV remains at around 9p, or £17.87 to charge the car to 80% at home.
“The Energy Price Guarantee benefits those drivers who are fortunate enough to charge their cars at home, but for those that rely on the public charging network – including those without driveways – it’s a much bleaker picture right now,” RAC EV spokesperson Simon Williams has said.
The effect on adoption
The growing price gap between home and public charging draws attention to the extent to which drivers who depend on the charging network pay a premium to run electric vehicles. It is a premium cost that will primarily hit drivers without driveways or home charging facilities.
“The fact wholesale energy prices will be capped for six months should lead to some price reductions by charge point operators in the coming weeks – but what EV drivers don’t want to see is operators having to hike their charges next Spring if wholesale costs keep climbing,” Williams added.
And while the cost of charging EVs away from home, even at rapid chargers, remains cheaper than petrol, that gap is closing, and some are concerned about what this could mean for EV adoption.
“For those that have already made the switch to an electric car or are thinking of doing so, it remains the case that charging away from home costs less than refuelling a petrol or diesel car, but these figures show that the gap is narrowing as a result of the enormous increases in the cost of electricity,” said Williams. “These figures very clearly show that it’s drivers who use public rapid and ultra-rapid chargers the most who are being hit the hardest.”
However, Gilshan argues that while electricity prices remain a factor, EVs are still a cost-competitive solution.
“The cost of electricity is definitely a factor for drivers who are considering the switch to EVs but given that fuel prices remain high, we still find that, particularly for those who are able to charge from home, driving electric offers savings for drivers,” Gilshan says. “For instance, setting up a day-night tariff is a great way to save costs and charge while your car is on your drive while you are asleep.”
Relying on the private sector
The RAC remains concerned the relatively high cost of rapid charging on the public network might put drivers off opting for electric cars when they next change their vehicles. The firm has backed the FairChange campaign, founded by Quentin Wilson, which calls for greater countermeasures to these rising costs.
“With electricity costs up by an average of 140% on last year and the Government’s divisive VAT levy of 20% on public charging, EV adoption is under threat,” Wilson insists. “This government needs to act on charging costs, cap rises on public chargers, lower VAT and support charge point operators to build infrastructure. If they don’t, all those years of promises of a zero-emission future, clean air and energy independence will have come to nothing.”
The RAC is arguing that the Government is relying on the private sector to do the heavy lifting when it comes to getting the country’s electric car charging infrastructure up to the scale and to a standard it needs to be to allow for EVs to be adopted on a wide scale.
“The problem is that these companies face such enormous cost increases that their investments in new charging sites, and upgrades of old ones, are in jeopardy unless costs can be kept down,” Williams said.
The RAC has joined charge point operators in backing the FairCharge campaign to call for cuts to the 20% VAT charged on electricity at public chargers so that it will match the 5% domestic rate.
Williams concluded, “The Government needs to redouble its efforts in helping drivers to go electric if it is to meet its own net-zero transport objectives and levelling the public and domestic electricity VAT rates would show it is serious about doing so at a time when household budgets are getting ever tighter.”