BERLIN — Soaring electricity prices are increasing the cost of driving electric vehicles in Europe and, in some cases, making them more expensive to run than gas-powered models — a change that could jeopardize the continent’s electric transition.
Electricity prices have skyrocketed in the wake of the Russian invasion of Ukraine, in some cases eroding the cost advantage at the pump that electric vehicles enjoy. In some cases, the difference in cost between driving both types of vehicles over 100 miles has become negligible. In other countries, electric vehicles have become more expensive in fuel than comparable gasoline-powered cars.
The increases in the price of electricity, which economists expect will last for years, are taking a powerful toll on consumers who have been considering switching to electric vehicles, which used to be much cheaper to run than internal combustion engines.
With some governments scrapping subsidies for EV buyers, this change could slow EV sales, jeopardize the region’s greenhouse gas emissions targets and make it harder for European automakers to recoup the high cost of their EV switch.
In Germany, Tesla has raised supercharger prices several times this year, most recently to €0.71 in September before they declined somewhat, according to Tesla owner industry forums. There is no public source to track Tesla Supercharger prices.
At that price, drivers of Tesla’s Model 3, the most efficient mid-size all-electric vehicle in the Environment Agency’s fuel guide, would pay €18.46 at a Tesla Supercharger station in Europe for a charge enough to drive 100 miles.
For comparison, motorists in Germany pay 18.31 euros for petrol to drive the same distance in a Honda Civic 4-door, the equivalent combustion engine model in the EPA ranking.
Tesla did not immediately respond to requests for comment.
The change was particularly evident in Germany, Europe’s largest car market, where household electricity cost an average of €0.43 per kWh in December. This puts it well ahead of France, where consumers paid EUR 0.21 per kWh in the first half of the year, but behind Denmark, where the kWh cost EUR 0.46 according to the Federal Statistical Office.
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Electricity costs are not the only factor that can make running an electric vehicle cheaper or more expensive than a gas-powered car. The price of the car, including possible subsidies, the cost of insurance and the price of maintenance all play a role in calculating the cost of a car over its lifetime.
Maria Bengtsson, a partner at Ernst & Young who is responsible for the company’s electric vehicle business in the UK, said studies of the total cost of owning an electric vehicle now show that with much higher electricity prices, it will take longer for electric vehicles to become more affordable than conventional vehicles.
“When we looked at that before the energy crisis, we saw a tipping point of around 2023 to 2024. But if you assume you have a future tariff of $0.55, the tipping point shifts to 2026.”
If the cost of running EVs rises again, the tipping point would be pushed even further into the future, she said.
So far, there’s no sign that the higher cost of charging electric cars has hurt electric vehicle sales. Sales of pure electric cars totaled 259,449 vehicles in the three months to the end of September, up 11% sequentially and 22% year-on-year, according to the Association of European Automakers. In the third quarter, pure electric cars accounted for 11.9% of total new car sales in the EU.
There is no relief in sight for users of electric vehicles. In Germany, electricity prices have risen by a third from €0.33 per kWh in the first half of this year, according to the Federal Statistical Office, and some energy companies have announced that prices will rise to over €0.50 per kWh in January.
The federal government’s independent panel of economic experts predicts that while these prices will fall over the medium term, they will not return to pre-crisis levels, meaning the higher costs for EV owners will remain.
Rheinenergie, a municipal utility in Cologne, announced in November that it would raise prices to €0.55 per kWh in January. In October, EnBW, a regional utility based in Stuttgart, increased its prices for a kWh of electricity to €0.37, 37% more than in the previous month.
The most expensive way to charge an electric vehicle in Europe is through one of the fast charging networks. Operators such as Tesla, Allego and Ionity have set up curbside charging stations along major thoroughfares where EV owners can drive up, plug in and charge their batteries in just 15 minutes.
Fuel economy estimates calculated by the EPA and current charging and gas prices in Europe show that some conventional vehicles are now cheaper to fill up with petrol than equivalent electric models with fast charging stations.
In the small car segment of the EPA’s 2023 Fuel Economy Guide, the Mini Cooper Hardtop was the most efficient model among electric vehicles and gas-powered cars.
A 100-mile trip will cost the Mini EV owner €26.35 on the Allego fast charging network, which charges €0.85 per kWh. The conventional Mini cost €20.35 to pump enough fuel to cover the same distance.
Mini and its owner, Bayerische Motoren Werke AG, did not immediately respond to a request for comment.
In the small two-door SUV category, the petrol-powered Nissan Rogue clearly beats the Hyundai Kona Electric with a price difference of 19.97 to 22.95 euros. The standard four-wheel drive Subaru Ascent SUV costs less to drive 100 miles than the Tesla Model X.
In general, if an EV owner just charges their vehicle at home, they still pay less to drive than traditional drivers, although that gap has narrowed significantly.
Analysts say about 80% of EV charging takes place at home or at work. So if an electric vehicle is only used close to home, it generally remains the most cost-effective option. However, once the vehicle is used for longer road trips, drivers are more likely to use fast charging stations as other options would take too long to charge the battery.
Charging a Tesla with 120VAC – the electricity that comes out of a regular US outlet – would take days. In Europe, 230 V is the AC standard, according to the German Association of the Electrical Industry ZVEI. European chargers installed on street corners, in supermarkets, in workplaces and in home garages can charge a switched off Tesla battery overnight.
The Supercharger networks operate on DC power, require a minimum of 480 volts of power, and can charge to a range of about 200 miles in 15 minutes.
Write to William Boston at [email protected]
Corrections & Enhancements
The standard household voltage in the USA is 120 volts. An earlier version of this article incorrectly stated that 120 volts was the standard in Europe. (Corrected 25 Dec.)
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