Will energy price inflation put the brakes on electric cars?

Between fears and optimism, the electric automobile sector is trying to get through the energy crisis by looking mainly to the future.

An electric car at a charging station, July 14, 2022 in Zwickau (Saxony, Germany) ©BelgaImage

Rebates at the pump and exploding electricity prices might make potential buyers of plug-in cars doubt. But for professionals, the energy crisis will not derail the transition to “zero emission” mobility.

Reasons to worry and be reassured

At the end of August, the wholesale price of electricity for 2023 in France reached 1,100 euros per megawatt hour (MWh) once morest 85 euros a year earlier, a consequence of the invasion of Ukraine by Russia but also of the unavailability nuclear power plants in France. At the same time, at the beginning of September the State increased the rebate on fuel at the pump to 30 cents per litre, once morest 18 cents previously. Such numbers”necessarily mark the spirits, so it can question some people regarding the decision to switch to electric mobility“, concedes Mathias Laffont, director “uses and territories” at the French Union of Electricity (UFE), the professional association of the sector.

Recently, the craze for 100% electric cars is no less spectacular: from 2% in 2019, they rose to 12% of registrations of new private vehicles in France over the first eight months of 2022. Growth brought to accelerate given the pressure on thermal vehicles, between traffic restrictions and a ban on sales by 2035. With plug-in hybrids, the vehicle fleet that can recover autonomy by connecting to the sector represents one million ‘units. Will their users be trapped by an explosion in the price of electrons? In fact, the French should be globally protected. First of all, “80% of top-ups are done at home and at work“, remarks Clément Molizon, general delegate of the National Association for the Development of Electric Mobility (Avere-France).

Tariff shield

At home, the tariff shield applies and the increase has so far been limited to 4%. The government promised that the device would remain in place in 2023 and that the increase would be “contained and reasonable in relation to (the) worst-case scenario“, i.e. doubled bills. “Even if we would have an increase in the price of electricity, there is a margin that is quite significant. At home, we are around two euros per 100 km, when in thermal we are between 12 and 16 euros depending on the performance of the cars“, adds Mr. Molizon. Especially since some suppliers offer discounted prices during “hyper off-peak” hours, late at night or early in the morning.

On the other hand, the question of increases is beginning to arise for operators of public charging stations, on the road or near shops, and at very heterogeneous prices, with or without a subscription allowing them to reduce the bill. Some points are oriented “top of the range”, especially on the main axes, with powers of more than 50 kW for fast recharging, and their prices are affected. Allego, which claims more than 28,000 charging sockets in Europe, announced kWh prices increased by 15 to 20% from the beginning of September in several countries, including France, “due to rising electricity prices across Europe“.

The beginning of a general movement? “We do not expect very big repercussions before 2023“, replies Clément Molizon, on the other hand”there are several important contracts that will expire next year“. And not all carriers are equally exposed to wholesale pricing. Allego’s competitor Ionity points out that “the current rise in energy prices does not spare operatorsand said stay alert.”At the moment, however, no price increase is planned“. Same story at EDF, which does not currently plan to increase the prices of public charging stations operated by its dedicated subsidiary, Izivia. And manufacturers, such as Peugeot, whose e208 has risen to the top sales of electric cars in France, or Renault, whose Mégane e-Tech has just come out, say they are rather calm: the spring oil shock has attracted new buyers. For Mr. Laffont, “the relevance of the switch to electric mobility must be assessed over several years“, and refill price increases, as long as they remain under control, “do not overturn the economic logic of going electric“.

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