Electric car owners have been warned that they could face higher motoring bills after Ofgem increases its price cap.
Whilst many motorists are facing higher tax bills after the exemption on EVs ends, calculations from the digital car finance lender Carmoola suggest that electric vehicle owners will pay a collective £35 million per month under the new price cap – £2.84 million more than the previous maximum.
Aidan Rushby, Founder and CEO of Carmoola, noted that, while energy bills are unlikely to see significant increases in the warmer spring and summer months, they will still have a huge impact on electric car owners.
He explained: “Ofgem’s price cap adjustments impact households across the UK, and while the warmer months may ease the burden of heating and lighting costs, rising energy prices continue to drive up monthly bills for electric vehicle (EV) owners.
With a 6.4 percent increase in the next price cap and the Spring Statement confirming the end of car tax exemptions for EVs from April 2025, the financial pressures are mounting.”
Introduced on April 1 2025, Ofgem’s latest energy price cap is set to £1,849 per year for a typical household who use both gas and electricity – an increase of six percent over the previous figure.
As a result, Carmoola estimated that it would cost the average electric car owner £16.21 to replenish the battery with a home charging point. Whilst the £1.30 increase does not sound like much initially, the company warned the additional costs could soon add up. It is estimated that as of 2024, around 850,000 homes in the UK have EV charging points installed.
In particular, those who charge an electric car twice per week will now need to spend £128 per month to keep their vehicle on the road.
Aidan noted that the price increase comes at a crucial time for the transition towards electric vehicles, with many motorists still having concerns about the cost.
He added: “Our recent survey revealed that nearly a third of Brits would avoid switching to an EV due to rising energy costs — a figure that’s likely to rise following these latest announcements.
“As we move closer to the 2030 ban on new petrol and diesel car sales and more EVs take to the roads, affordability will be a key concern for drivers.”
Nevertheless, Carmoola highlighted that it is still significantly cheaper for electric car owners to plug in at home, rather than use public chargers.
This is largely because public charging points typically supply a significantly higher rate of power, meaning that charging can be achieved at a much faster rate, and a 20 percent VAT rate charged to motorists who use them.
Many motoring experts have called for the VAT rate to be reduced to five percent, the same figure applied to home charging, in a bid to encourage more motorists to switch to an EV following the end of tax exemption.
