The EV Charging Cost Gap: A Barrier We Need to Address

Home charging sits at 28p/kWh. Public charging hits 82p/kWh. That three-fold gap isn't just a consumer inconvenience — it's a structural barrier to commercial fleet electrification, and it deserves a serious policy conversation.

The Numbers Behind the Gap

Cost data from Allstar Business Solutions illustrates the scale of the disparity clearly. Home charging at the standard domestic rate gives fleet operators and individual EV users a fuel cost that is genuinely competitive with petrol and diesel — in many cases significantly cheaper. But the moment a vehicle relies predominantly on public charging infrastructure, the economics shift dramatically.

At 82p/kWh on a public rapid charger, the per-mile energy cost of an electric vehicle approaches and in some cases exceeds that of an efficient diesel. The environmental benefit remains — the carbon intensity of grid electricity is falling year on year — but the financial case, which is the lever that actually moves procurement decisions at scale, becomes much harder to make.

Why This Matters Particularly for Fleets

The charging cost gap hits fleets hardest for a specific reason: not all fleet operators can install workplace charging. The upfront CAPEX for on-site charging infrastructure — including the grid connection works that are often required — is significant. Smaller operators, those in multi-tenanted premises, and those with geographically distributed workforces may face barriers to workplace charging that push them towards reliance on the public network by necessity, not choice.

For commercial vans specifically, the situation is compounded by lower energy efficiency relative to cars. Electric vans typically have higher kWh/mile consumption than their car counterparts, which means a higher proportion of their operating cost is exposed to whichever tariff they're charging on. Most electric van models currently on the market also aren't well-suited to businesses operating large geographical areas — a constraint that makes high-mileage, multi-stop route planning even more sensitive to charging cost and availability.

The Charge Point Operator Dilemma

I want to be clear that this isn't simply a case of Charge Point Operators (CPOs) extracting excessive margins. The infrastructure investment required to deploy a reliable public charging network — particularly rapid and ultra-rapid chargers — is substantial, and those costs need to be recovered. Low utilisation rates at many public charge points mean that fixed costs are spread across fewer charging sessions, pushing per-kWh prices up.

But the current model, where pricing is essentially unregulated and varies enormously between operators, networks, and locations, creates a confusing and often hostile experience for fleet operators trying to build a business case. Predictability matters. A fleet manager can plan around a known cost per kWh. They cannot plan reliably around a market where the same journey might cost 40p/kWh at one charger and 85p/kWh at the next one.

The Rapid Charger Expansion — Encouraging but Incomplete

The expansion of fast and rapid chargers across the UK network is genuinely encouraging. Coverage is improving, reliability is getting better, and the major motorway service area networks are now largely functional for long-distance EV travel. That progress shouldn't be understated.

But deployment without addressing the cost structure risks building an infrastructure that is technically adequate and economically prohibitive for those without access to cheap home or workplace charging. We risk creating a two-tier EV market: affordable for homeowners with driveways, expensive for everyone else. That outcome would be a serious failure of the transition.

What Should Change

I'm not arguing for price controls that would disincentivise CPO investment — we need that investment to continue. But there are meaningful interventions available:

• VAT parity. Domestic electricity for EV charging attracts 5% VAT. Public charging attracts 20%. This differential alone adds roughly 12p/kWh to public charging costs and has no policy justification. Equalising VAT on public EV charging would be a straightforward, high-impact intervention.
• Pricing transparency requirements. Mandating consistent, comparable pricing display across public networks would allow fleet operators and consumers to make informed decisions and would create competitive pressure on CPOs.
• Targeted support for workplace charging. Expanding grant schemes for workplace charging — particularly for SMEs and multi-tenanted commercial premises — would reduce public network dependency and improve the economics of commercial fleet electrification.

The Stakes

The ZEV mandate is the right policy direction. The infrastructure investment is heading in the right direction. But if we allow the charging cost gap to persist unaddressed, we risk the transition stalling in the segments where it matters most: commercial fleets, SME operators, and drivers without home charging access.

Getting the economics right isn't just good for EV adoption — it's essential for the credibility of the entire net-zero transport agenda.