Research into the cost and pricing of public electric vehicle charging

As London accelerates its transition to Electric Vehicles (EVs), the cost disparity between public and private (domestic) charging has emerged as a significant barrier to equitable EV adoption. Two-thirds of London households lack off-street parking, making them reliant on public charging infrastructure. This disproportionately affects lower-income groups and high-mileage drivers (such as taxis, private hire vehicles (PHVs), and Light Commercial Vehicle (LCV) drivers), who face higher running costs and greater barriers to switching to EVs. Understanding and addressing this disparity is crucial for supporting a fair, inclusive, and effective transition to zero-emission transport in the capital and beyond.

What we did

Steer (with support from Arcadis) undertook a comprehensive review for Transport for London (TfL), combining market data analysis, stakeholder engagement, and international benchmarking. The project involved:

• Quantifying the gap between public and private EV charging tariffs in London.
• Analysing the cost structures of Chargepoint Operators (CPOs), including energy and non-energy costs.
• Segmenting EV user groups to identify those most impacted by higher public charging costs.
• Comparing the UK’s public-private charging tariff gap with Norway, the Netherlands, and Spain.
• Reviewing alternative commercial models and policy interventions to reduce public charging costs.

What we found

Over five years, public charging can cost a typical EV driver in London up to £5,500 more than private charging. For high-mileage drivers, this gap is even wider—up to four times higher for taxis/PHVs (that make up just under 5% of all registered cars in London or around 105,000 vehicles) and more than double for drivers of LCVs (approximately 180,000 vehicles assumed to not have a depot base). Low-income drivers (205,000) and high-mileage drivers are most affected by high public charging costs, creating equity concerns and slowing EV uptake among those who would benefit most.

The average pay as you go public charging tariff in the UK is £0.64/kWh, nearly four times the average price paid for electricity at home (£0.17/kWh when accounting for off-peak EV tariffs overnight and price cap tariffs during the day). The absolute gap (£0.47/kWh) is the highest among the four European countries studied across Europe.

Public charging is more expensive than home charging in all four countries, but the UK has the highest disparity partly down to VAT rate on public charging being 15% higher than for domestic electricity, unlike other countries where the VAT rate is equalised.

Energy-related costs, which make up 60–65% of CPO expenses, are split into wholesale electricity prices, still 1.5 times higher than pre-2022 levels and non-commodity energy costs such as network charges and policy levies. The latter have been rising and disproportionately impacting CPOs, and current trends suggest they will continue to do so unless there is regulatory intervention in support of the industry. Non-energy costs (development and installation, software platforms, maintenance and admin) account for the remaining portion of costs and have also risen faster than inflation.

Key Takeaways

• Structural gap: the cost gap between public and private charging is driven by higher energy and operational costs for public infrastructure, and is unlikely to close without policy or regulatory intervention.
• Policy levers: equalising VAT on public charging with domestic rates could reduce the public charging cost to £0.56/kWh, narrowing the disparity and improving equity. Other levers include extending and redeploying RTFO (similar to other European countries) and providing exemptions or reliefs for CPOs on certain levies such as the Climate Change Levy.
• Commercial solutions: aggregating demand (e.g., through public procurement of energy or Power Purchase Agreements), dynamic pricing, and targeted tariffs for vulnerable groups can help lower costs.
• Innovative models: local authority ‘own and/or operate’ or joint venture models and community-owned infrastructure can deliver lower tariffs but require significant internal capacity and resources.
• Signposting and support: councils and industry can help consumers by promoting off-peak tariffs, subscription discounts, and alternatives such as workplace or shared domestic charging.

This research offers strong evidence supporting the need for action and guides local authorities and other stakeholders on targeted interventions that can lower charging costs, especially for user groups most affected. These measures will help make EV benefits accessible to all and promote cleaner transport.

If you’d like to find out more please get in touch with Elaine Meskhi or Matthew Clark.