Daily EV news · UK · 25 October 2026
Policy & Market
UK VAT cut on domestic electricity widens cost gap for EV drivers without home charging
The UK government reduced VAT on domestic electricity from 5% to 0% on 1 October, lowering home charging costs to around 7p per kWh or 2p per mile. Analysis by costpermile.co.uk shows drivers with home charging now pay approximately £200 annually for 10,000 miles, while those relying on public rapid chargers at 20% VAT and around 50p per kWh face costs exceeding £2,200 per year. The policy widens the cost disparity by over £2,000 annually between drivers with and without off street parking, despite industry calls to align public charging VAT with domestic rates.
Why it matters
The widening cost gap may deter EV adoption among the millions without driveways, potentially slowing demand for public charging infrastructure. CPOs face pressure to justify higher pricing structures while the VAT disparity remains, complicating business cases for urban and on street charging deployments.
Renault UK chief urges Labour to cut VAT on public EV charging
Adam Wood, managing director of Renault UK, has called on the Government to reduce VAT on public charging to lower costs for drivers considering electric vehicles. The appeal comes as the UK recorded its strongest month for EV sales in September, with almost 100,000 new electric cars sold. Wood told GB News that lower charging costs are needed to encourage more people to invest in EVs.
Why it matters
A VAT cut on public charging could shift demand dynamics for charge point operators and influence site economics, particularly for forecourt and destination charging networks targeting cost sensitive drivers. The intervention from a major OEM adds industry weight to pricing debates as the UK approaches 2030 zero emission vehicle mandates.