Electric vehicle owners across Britain are bracing for significant cost increases starting January 2026, with average monthly charging expenses set to rise by approximately £49 due to changes in the energy price cap.
Price Cap Changes Explained
The energy regulator Ofgem has confirmed that the price cap will increase from January 1 to March 31, 2026, setting the typical annual bill for dual-fuel households paying by direct debit at £1,758. This represents a slight 0.2% rise compared to the previous quarter's cap.
The adjustment means that completely charging a standard 71.1kWh electric car battery at home will increase from £18.73 to £19.69. For motorists covering the UK's average monthly distance of 592 miles, this translates to roughly £49.37 in additional monthly charging costs.
Industry Reaction and Concerns
Aidan Rushby, founder and chief executive of car finance company Carmoola, expressed concern about the impact on electric vehicle adoption. "Every time Ofgem updates the price cap, there's a concern that rising electricity prices will make EV ownership more complicated," he stated.
The news comes as an unexpected blow to households, as analysts had previously forecasted that energy bills would see a slight decrease rather than an increase. While the new cap is 2% or £37 lower than the same period last year, bills remain substantially higher than historical averages.
Cost-Saving Solutions for EV Owners
Despite the price increases, several energy tariffs specifically designed for electric vehicle owners could help mitigate the financial impact. The most common option is a two-rate tariff that provides cheaper electricity during nighttime hours.
Additionally, specialised 'add-on' tariffs are available from providers including Ovo and Scottish Power, offering reduced rates specifically for vehicle charging. These targeted solutions can significantly lower the overall cost of running an electric vehicle.
According to MoneySavingExpert, while charging an EV may add hundreds of pounds to annual energy bills, it typically remains cheaper than using petrol or diesel vehicles. The experts emphasised that "electric cars are generally much cheaper to run than petrol or diesel cars – and by far the biggest savings you can make will come from the fuel."
Future Changes and Budget Announcements
Further changes for electric vehicle owners are expected following Wednesday's Budget announcement. The Treasury has revealed that Chancellor Rachel Reeves will launch a consultation into modifying how electric cars are taxed.
EV specialists at Electrifying anticipate this will be accompanied by a second consultation examining VAT issues surrounding public charging infrastructure, potentially leading to additional policy changes affecting EV running costs.
Ofgem adjusts the price cap every three months in January, April, July and October. The regulator noted that while wholesale prices have decreased by 4% over the previous three months and remain stable, market conditions continue to be "volatile," suggesting further fluctuations might occur throughout 2026.
