Holiday season highlights issues with electric car charging incentives

23 August 2023

The issue often presented to people considering the purchase of an electric car is the price and accessibility of the much-needed electric charging points. The last thing needed on a long family trip with boisterous children in the back seats and fraught parents in the front is a long queue to recharge a car and paying a premium for the privilege.

VAT on domestic electricity which goes to your home is at the reduced rate of 5%. Some may hope that the government would extend this policy to electric vehicles to encourage their use, however, electricity for public charging points is subject to the standard rate of 20%. Therefore, electric car owners with no charging port at home have to pay four times more in tax for electricity when using public charging points. This is just one of the many contradictory policies the government has applied to electric vehicles.

As well as paying a greater amount of tax for charging, electric vehicle (EV) owners who may be looking for a cheaper holiday within the UK may have to pay over the odds for holiday lettings that include electric charging points.

According to a recent study by Skoda UK, apartment listings with EV charging capabilities are costing an additional £134 per night on average throughout the UK. The cost is highest for those in Oxfordshire who can expect to pay a premium of over 300% for properties with an EV charging port. While this is good news to investors who can now charge a premium if they install a charging port, this is rather unfortunate for EV owners who are seeing a substantial increase in their holiday costs.

A further benefit for landlords is that the government is subsidising the costs of installation through the Office of Zero Emission Vehicles. Under this scheme, landlords will have 75% of the cost of installing an EV charging port covered by the grant (inclusive of VAT) up to a maximum of £350 per socket.  With a home charge point typically costing between £800 and £1,500, this is a sizable discount considering the potentially quick returns landlords can make from a premium on holiday rents.

The government’s policies in this area are broadly intended to improve the affordability of electric cars and encourage a move away from petrol or diesel vehicles. But, whilst well intentioned, this policy is arguably benefitting landlords more than EV users at the moment. It could be argued that by making it so economically attractive for landlords to install ports, it will entice a much greater number of landlords to install ports than they otherwise would without the profit incentive. In the long term, this will hopefully bring down the price of EV charging holiday lets and massively increase the number of properties in the UK offering EV charging capabilities.

In the meantime, holidaymakers with electric cars may just have to suffer the additional cost or seek out alternative charging arrangements for their staycations.