Public EV Charging About to Get 15% Cheaper – What the VAT Cut Means for Installers and Drivers

The UK Government is preparing to slash VAT on public electric vehicle charging from 20% to 5%, finally levelling the playing field between home and public charging – and it could reshape the economics of EV adoption across the country.​

According to reports from The Telegraph, Chancellor Rachel Reeves is fast-tracking the VAT reduction amid growing fears that the planned pay-per-mile tax (eVED) could suppress electric vehicle demand by hundreds of thousands of sales over the next five years. For installers, charge point operators, and drivers alike, this represents one of the most significant policy shifts in UK charging infrastructure economics since the EVHS grant was first introduced.​

The "Pavement Tax" Problem

For years, the EV charging industry has highlighted a glaring inequality: drivers with driveways pay 5% VAT on domestic electricity to charge at home, whilst those relying on public chargers face a 20% rate. This "pavement tax" has disproportionately penalised the 35% of UK households without off-street parking – often renters, flat dwellers, and lower-income families who need EVs to be affordable most.​

Currently, public charging costs average 54p per kWh for slow and fast chargers, or 77p per kWh for rapid and ultra-rapid units – compared to just 9p per kWh for home charging during off-peak hours. The 15-percentage-point VAT cut won't eliminate that gap entirely, but it removes a significant chunk of the premium and sends a clear signal that government policy is finally catching up with the realities of mass EV adoption.​

Philip Douglass, Vauxhall's Electric Streets Director, called the move a "huge boost in tackling the cost barrier that stands in the way for many drivers wanting to switch to electric," adding that it would "provide drivers with cheaper charging" whilst delivering "more diverse and accessible options, especially those without a driveway."​

The eVED Context: Why Now?

The VAT cut isn't happening in a vacuum. It's a direct response to the controversy surrounding eVED – the new electric Vehicle Excise Duty that will charge EV drivers 3 pence per mile (and plug-in hybrids 1.5p per mile) from April 2028.​

The Office for Budget Responsibility has warned that eVED could reduce new EV sales by 440,000 units between November 2025 and March 2031, as drivers baulk at the additional annual cost of around £255 for an average 8,500-mile-per-year driver. Treasury insiders have reportedly told industry stakeholders they fear eVED could "kill EV demand" unless offset by measures that make charging cheaper and easier.​

One Whitehall source told The Telegraph: "The way we convince people to switch to EVs is by showing it is easy and cheap. There are real savings here for many drivers."​

The VAT cut is the Government's attempt to square that circle – softening the impact of the pay-per-mile charge by making day-to-day running costs more competitive, particularly for those who can't charge at home.​

What This Means for Installers and CPOs

For EV charging installers and charge point operators, the policy shift creates both opportunity and strategic pressure.

Pricing flexibility: A VAT reduction from 20% to 5% gives CPOs room to either drop end-user prices (driving higher utilisation and customer loyalty) or hold prices steady whilst improving margin. In a market where utilisation rates have often lagged behind infrastructure rollout, cheaper per-kWh costs could be the catalyst that tips occasional public chargers into regular users.​

Demand signal for on-street and destination charging: The policy specifically targets drivers without driveways, which means increased government and local authority focus on residential on-street charging and destination hubs at supermarkets, retail parks, and workplaces. Installers with strong track records in lamp-column conversions, kerbside units, and mixed-use sites will be well-positioned to capture that pipeline.​

Narrative shift: For too long, public charging has been framed as expensive, inconvenient, and only for "road-trippers." A VAT cut to match home charging reframes the conversation: EVs are now accessible to renters, flat owners, and anyone without a driveway. That's a marketing angle installers can – and should – use when pitching to site hosts, local councils, and property developers.​

Competitive pressure: Lower end-user costs could accelerate consolidation in the CPO market. Operators with thin margins, high capex, and low utilisation may struggle if competitors use the VAT cut to undercut pricing. Installation partners need to evaluate which CPOs have the financial resilience and strategic clarity to thrive in a lower-price, higher-volume environment.​

The Road Ahead

The VAT cut hasn't been formally confirmed yet – Treasury officials are still in consultation with industry stakeholders – but the political and economic momentum is clear. With 1.4 million EVs already on UK roads and the Government's Zero Emission Vehicle Mandate requiring 80% of new car sales to be electric by 2030, policy-makers know they can't afford a demand shock from eVED.​

A Treasury spokesperson confirmed: "We're also reviewing the cost of public EV charging, which will look at the impact of energy prices, wider cost contributors, and options for lowering these costs for consumers."​

For installers, the message is simple: prepare now for a world where public charging is cheaper, more widely adopted, and more tightly integrated into everyday life. The operators and installation partners who treat this as a two-year opportunity window – not a distant policy announcement – will be the ones who benefit most.

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