UK switching to electric vehicles discussion

[The Ham]

You will not be able to lease a car for £200/month, no other cost, no deposit.

Maybe £200 per month, excluding deposit, and any return fee /repairs

But anyone who just looks at monthlies, without adding up all the costs and dividing it by number of months is just gullible and not financially savvy. Actually I wish regulator banned adverts that only give intermediate monthlies as a headline, because it causes dumb people to get into debt, but that isn't for this thread.

Even today can find PCP adverts where sounds like a deal, but if look at total cost (including interest) it's thousands more than cash price, but smooth talking salesmen still make out you have a good deal (ie good for them)

But back to EVs, and the real difference for a person who can use overnight electricity is the fuel saving, it's now around one seventeenth of petrol and diesel. Someone doing even 8000 miles a year is saving over £100 per month in fuel. If doing 10,000 miles a year then nearer £130 per month fuel saving.

Even if financing was £80 a month extra for an EV, sort of becoming a no brainer

That's very true, although in my follow up post, I did clearly state that I'd allowed for the £5,000 deposit in my cost comparison when looking at the £200 per month cost.

As such it's an all in price not just the monthly amount.

 

[Snow1964]

That's very true, although in my follow up post, I did clearly state that I'd allowed for the £5,000 deposit in my cost comparison when looking at the £200 per month cost.

As such it's an all in price not just the monthly amount.

I think we are on same page, just phrasing it differently

£200 per month for 48 months plus £5000
should be seen as same as spending average of £304 per month

What never ceases to amaze me is number of people who never make provision for balloon payment and end up having to hand car back, or ending up stuck with new agreement that is worse value, because they can't afford to pay it off.

 

[jon0844]

There are plenty of lease deals with little upfront payments (on many broker sites you can select the number of months you wish to pay). You can do just one month if you prefer, but obviously this adjusts the monthly fee.

The more important thing is mileage with some good lease deals being limited to 5000 miles, although 6000 or 8000 deals are often quite good. The price can jump quite a bit if you want more mileage, and I've also noticed some cheap lease deals are dependent on you wanting the car for only 2 years, sometimes 3.

Any longer and the price can leap up - so the lease companies clearly want to lease for shorter periods and to people who won't use them much.

I would say leasing can be fantastic when you shop the deal and not the car as every day there will be absolute bargains. Get a B-segment EV for £120 a month and you really aren't going to need to worry about anything, especially if you can charge it cheap.

 

[The Ham]

I think we are on same page, just phrasing it differently

£200 per month for 48 months plus £5000
should be seen as same as spending average of £304 per month

What never ceases to amaze me is number of people who never make provision for balloon payment and end up having to hand car back, or ending up stuck with new agreement that is worse value, because they can't afford to pay it off.

Indeed, I was just ensuring that others were aware that we were.

There are plenty of lease deals with little upfront payments (on many broker sites you can select the number of months you wish to pay). You can do just one month if you prefer, but obviously this adjusts the monthly fee.

The more important thing is mileage with some good lease deals being limited to 5000 miles, although 6000 or 8000 deals are often quite good. The price can jump quite a bit if you want more mileage, and I've also noticed some cheap lease deals are dependent on you wanting the car for only 2 years, sometimes 3.

Any longer and the price can leap up - so the lease companies clearly want to lease for shorter periods and to people who won't use them much.

I would say leasing can be fantastic when you shop the deal and not the car as every day there will be absolute bargains. Get a B-segment EV for £120 a month and you really aren't going to need to worry about anything, especially if you can charge it cheap.

For completeness, my £200 a month is for 4 years and 12,000 miles a year.

Whilst I've not mentioned the balloon payment recently, it's £10,500, so another 4 years (until the end of the battery) would be £9,600 at £200 a month and whilst there maybe interest on this, that would be the case for an £11,000 ICE (at 4 years old in 2026 prices) anyway.

Whilst the ICE would have a higher value (£7,880) vs the EV (maybe £2,250) at the end of 8 years, any oil prices spikes could change that rather quickly.

As could any big repair bills on either car (although with the battery covered by warranty, there's not a lot else to go wrong with the EV).

 

[HSTEd]

My parents historically have very rarely sold cars, they tend to buy second hand and then run them into the ground.

I'd always thought this was a relatively common practice, is that not the case?

I suppose the masses of leased cars are not used like that, but is it truly a large part of the market now?

 

[Bald Rick]

I'd always thought this was a relatively common practice, is that not the case?

Clearly not, or the second hand market would be next to non existent!

 

[HSTEd]

Clearly not, or the second hand market would be next to non existent!

Well, evey cary would get sold on the second hand market at least once in that system! But I take the point.

 

[The Ham]

My parents historically have very rarely sold cars, they tend to buy second hand and then run them into the ground.

I'd always thought this was a relatively common practice, is that not the case?

I suppose the masses of leased cars are not used like that, but is it truly a large part of the market now?

It does depend, there's always some who do this, and some who would do so by keeping the car due years and years and others who would buy as cheap as possible and hope for 3 years of use.

The thing is we have done something similar (although often still holding some value when we sell on, our last car part exchanged for £1,200) in the past.

Although the maths for transferring from paying £x for fuel and instead using that £x for car lease payments meant that for the first time ever I'm driving a band new car (I did get a 3 month old car once before, as that was still "new" for the offers, but that was when I was a fairly new driver and got free insurance, which again made the maths simple!).

 

[E27007]

But back to EVs, and the real difference for a person who can use overnight electricity is the fuel saving, it's now around one seventeenth of petrol and diesel. Someone doing even 8000 miles a year is saving over £100 per month in fuel. If doing 10,000 miles a year then nearer £130 per month fuel saving.

The saving in fuel costs by overnight domestic charging is a major factor in calculating the financial case for driving a ZEV over an ICE , taxation by fuel duties for petrol diesel,etc is significant revenue for HMRC, will the situation remain, duties upon the electricity which fuel ZEVs will continue to be zero or minimal?

 

[JamesT]

The saving in fuel costs by overnight domestic charging is a major factor in calculating the financial case for driving a ZEV over an ICE , taxation by fuel duties for petrol diesel,etc is significant revenue for HMRC, will the situation remain, duties upon the electricity which fuel ZEVs will continue to be zero or minimal?

As it’s essentially impossible to determine what electricity is being used for domestically, you can’t have differential taxation on it in that way.
Ramping up the per mile charges due to be introduced in 2028 would be the obvious route to substitute for declining fuel duties.

 

[The Ham]

As it’s essentially impossible to determine what electricity is being used for domestically, you can’t have differential taxation on it in that way.
Ramping up the per mile charges due to be introduced in 2028 would be the obvious route to substitute for declining fuel duties.

The issue with such a scheme is the amount of paperwork means that the value isn't as high as it could be.

It's one thing to have tens of thousands of garages providing tax details as part of their accounts and paying tens of thousands a year, it's quite another to have an IT system for tens of millions of car owners to log their mileage and pay maybe up to £50 a month (more likely around £18 to £33).

 

[E27007]

As it’s essentially impossible to determine what electricity is being used for domestically, you can’t have differential taxation on it in that way.
Ramping up the per mile charges due to be introduced in 2028 would be the obvious route to substitute for declining fuel duties.

Not impossible, for home charging, a smartmeter on the charger port for billing the house, for public charging, the taxation would be added to the bill at source

 

[The Ham]

Not impossible, for home charging, a smartmeter on the charger port for billing the house, for public charging, the taxation would be added to the bill at source

OK, what's the tax rate for overnight charging? If someone is paying 6p per kWh and the tax is 100% that's still 12p.

Even at 3 miles per kWh that's 4p a mile, and so the total cost would still be £480 rather than (pre war) £1,900 for someone doing 12,000 miles a year.

That's still around £120 a month in savings (bearing in mind my lease is £200 for 12,000 miles a year) so whilst the maths isn't so clear cut, it's still a fairly significant saving.

Also, whist we have a smart charger, we also have a 13amp socket (external, but for others that could be within a garage), we can charge from that, even if that meant paying for 3kWh at 30p per kWh (£0.90) and a further 22kWh at 6p (£1.32) that's still cheaper (£2.22) than paying 12p through the charger (£3). Whist that's only £80 a year in savings, people will do it.

That's assuming we don't have a battery system and charge that overnight and use that (around 7p per kWh once you allow for losses) for the bit of the charge we didn't do because we flicked the switch to change the car before the off peak rate started as we didn't want to wait for it and went to bed and didn't pay for a timer to be installed at the interal switch (between the fuseboard and external socket).

Either of which could reduce the extra cost down by a further £75 a year.

If we pay for a timer switch we'd buy one with app control (which isn't much more), so when at home we'd use it to draw power from our solar (rather than exporting) as whist that "losses" us 12p in export income we'd also be no worse off and better off if the tax was set higher.

That all assumes we're not using a variable rate based on energy supply where we could use the app to charge the car when the rate is negative. Then what's the tax rate?

As then as we are paying zero a 100% rate is still going to be zero. If it's a fixed value (say 6p) as long as the rate is lower than +4p then even using the smart charger during the day would be slightly cheaper, let alone using our WiFi controlled charger.

Bottom line, my extra tax bill could be £0 and my electric bill maybe £5 (due to battery losses) but maybe not a lot. Maybe up to £150 to pay an electrician to install that WiFi timer switch (but only if we did that at a time when we weren't requiring them for something else) but that "pays" for itself within (at most) 2 years from the savings (with negative pricing it could be much faster).

Nothing I've suggested is likely to ever be illegal in terms trying to limit my tax bill and HMRC make almost nothing from me for home charging.

I doubt that I'll be the only one who could do that. However, again the people who would end up not being able to limit their tax bill will be those who live in places where they have to use a bollard smart charger (flats, terraced houses, etc.) and so again those who have money (i.e. can afford a driveway or a garage with power and solar systems) will pay the least tax, when they could most afford to pay it.

 

[Harpers Tate]

Not impossible, for home charging, a smartmeter on the charger port for billing the house, for public charging, the taxation would be added to the bill at source

Assumes that you have to use a dedicated outlet. For low mileage users they don't. They can use the same outlet as they use for their lawnmower (etc), so impossible to determine. They will get perhaps 10-12 miles per hour added from a 13a socket.

 

[E27007]

I checked the Govt website, fuel duty for petrol is currently a fixed 52.9p per litre, the fuel duty is a constant and independent of price fluctuations of the retail price of the fuel.
As petrol vehicles are replaced by ZEVs, and petrol duty tax yield declines, in the future, to recover the declining fuel duty tax yield, a Chancellor may legislate a duty applied to electricity supplied through ZEV charging points, I estimate such a duty would be 21p per kwH with an assumption of parity between a petrol vehicle of 10 miles per litre (45 mpg) and a Zev of 4 miles per kwH

 

[Snow1964]

I checked the Govt website, fuel duty for petrol is currently a fixed 52.9p per litre, the fuel duty is a constant and independent of price fluctuations of the retail price of the fuel.

Duty is fixed, but VAT is added at 20% (including VAT on duty), so every 6p per litre rise includes extra 1p to Government

 

[The Ham]

I checked the Govt website, fuel duty for petrol is currently a fixed 52.9p per litre, the fuel duty is a constant and independent of price fluctuations of the retail price of the fuel.
As petrol vehicles are replaced by ZEVs, and petrol duty tax yield declines, in the future, a Chancellor may demand a ZEV electricity duty applied to electricity supplied by charging points, I estimate such a duty would be 21p per kwH with an assumption of parity between a petrol vehicle of 10 miles per litre (45 mpg) and a Zev of 4 miles per kwH

OK, how am I changed that rate on my home charging?

(see my post about what I'd do if it was just an extra 6p).

 

[Mawkie]

I estimate such a duty would be 21p per kwH with an assumption of parity between a petrol vehicle of 10 miles per litre (45 mpg) and a Zev of 4 miles per kwH

This is just scaremongering. The obvious choice, and the preferred choice by the current Chancellor seems to be a simple pay per mile scheme to replace lost revenue.

OK, how am I changed that rate on my home charging?

Quite.

 

[Bald Rick]

As it’s essentially impossible to determine what electricity is being used for domestically, you can’t have differential taxation on it in that way.

Oh it’s definitley possible!

 

[JamesT]

Oh it’s definitley possible!

As noted above, how do you detect a granny charger plugged into a normal socket going out the window and tax it differently from any other device?

 

[Noddy]

Not impossible, for home charging, a smartmeter on the charger port for billing the house, for public charging, the taxation would be added to the bill at source

What happens when I’m charging off my solar panels? Or when vehicle to home charging becomes common and I’m using the car battery instead of a home battery (instead of buying a home battery). Many vehicles can already do it, it’s just waiting for the regulatory environment and home charging infrastructure to catch up. That system you suggest has nontransparent nightmare written all over it.

The government will need to replace lost tax revenue with some sort of usage system.

 

[Bald Rick]

As noted above, how do you detect a granny charger plugged into a normal socket going out the window and tax it differently from any other device?

As I said, I don’t know the details!

 

[AM9]

The government will need to replace lost tax revenue with some sort of usage system.

For all road vehicles, - to prevent petrol diehards from keeping polluting vehicles on the road just to avoid the charge.

 

[Noddy]

As I said, I don’t know the details!

It would only be possible if the government (HMRC) had access to every device in the household. For example smart meter (let’s not forget many places in GB and all of NI don’t and can’t have smart meters), home batteries, solar panels and/or other home generation devices, and car. Tracking this in any sort of transparent way for taxation purposes for the user would be a thing of nightmares.

 

[AM9]

It would only be possible if the government (HMRC) had access to every device in the household. For example smart meter (let’s not forget many places in GB and all of NI don’t and can’t have smart meters), home batteries, solar panels and/or other home generation devices, and car. Tracking this in any sort of transparent way for taxation purposes for the user would be a thing of nightmares.

Anyone with a moderate degree of nouse on electrics would be able to defeat attempts to define energy consumption (from any prime source) for government taxation purposes. Add to that the absolute priority of all but the swivel-eyed right-wing extremist party to promote zero emission energy in the UK, such disruption would be disastrous.
I can imagine rapid creation of a granny charger combiner that can be connected to two separate 13A outlets creating a 6kW home charger, (made in China of course). It's naïve to imagine any successful government scheme that could be rolled out universally, but talk of such schemes would be used by climate change deniers as part of their project fear toolkit.

 

[The Ham]

Oh it’s definitley possible!

But at what cost?

The thing with user costs (pence per mile or pence per kWh) is that the administration costs could easily erode much of the income.

Let's say the target income is 22p per kWh and administration costs are 5% of income you have to charge 23.15p per kWh to have the desired income.

As I said with the 3p per mile charge, a lot of users will be paying around £20 a month, but once all cars are on that system that's tens of millions of accounts to be managed, that's not a small system and so the usable income will be noticeable less.

 

[E27007]

HMRC does not have access to petrol pumps in fuel stations, and does not have access to every newsagent selling cigarettes, and has been collecting petrol duty and tobacco duty for decades.
In the situation of home chargers, there must be a smart billing system in place so the consumption is metered and billed to the household at the appropriate night tariff 7p/kwH,so surely possible for the electricity supplier to add a ZEV duty to the household bill for the meterd charging

 

[pokemonsuper9]

In the situation of home chargers, there must be a smart billing system in place so the consumption is metered and billed to the household at the appropriate night tariff 7p/kwH,so surely possible for the electricity supplier to add a ZEV duty to the household bill for the meterd charging

You would be able to bill all electricity usage - but nothing for a specific device, bypassing any attempt at that is far too easy.

 

[E27007]

But at what cost?

The thing with user costs (pence per mile or pence per kWh) is that the administration costs could easily erode much of the income.

Let's say the target income is 22p per kWh and administration costs are 5% of income you have to charge 23.15p per kWh to have the desired income.

As I said with the 3p per mile charge, a lot of users will be paying around £20 a month, but once all cars are on that system that's tens of millions of accounts to be managed, that's not a small system and so the usable income will be noticeable less.

Adminstration costs of collecting tax, I recall a documentary on taxation, tobacco duty was one of the easiest taxes to collect by HMRC, a single HMRC employee would receive data from the tobacco companies and send tax demands on a daily basis, the same method may apply work with the energy companies supplying ZEV charging.
I agree about three p /mile charging scheme, I believe it is a quick measure, a kludge, until more effective measures are placed, consider too the "road tax" measure for ZEVs ,petrol cars are classified by CO2 emissions, petrol cars category A were zero charge, now £20/ year, ZEVs are CO2 free, yet certainly not charged £20/year

 

[martin butler]

Non though still address the biggest issue, charging from home, will not be available for quite a large segment of the population, because either they have no designated parking place, within reach of an socket, or no parking place at all, such as on street parking, and until such time street charging is rolled out, many people might be put off from buying an electric car,

For some , it will mean changes in lifestyle, for example finding a charging spot in a supermarket car park, whilst you do your shopping, not all supermarkets have charging stations, nor do car parks, some do, but many still don't.

Then there's the matter of fuel duty, with an EV, there is not fuel to charge so unless you bring in black boxes that charge per mile, how can a road fee be charged?