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Is driving an electric car still profitable?

  • Post category:Economy News
  • Reading time:6 mins read

€1,100 per megawatt hour (MWh) in recent weeks, compared to €85 a year earlierno doubt, the spectacular wholesale price of electricity in France, a consequence of the war in Ukraine and the unavailability of nuclear power plants in Francefeeds all fears, feeds all fantasies, including among those who wondered about a switch to an electric vehicle: “Obviously, it makes an impression, so it can question some people about the decision to switch to mobility electricity” declared Mathias Laffont, director “uses and territories” at the French Union of Electricity (UFE), the professional association of the sector.

At home or at work

Especially since at the same time, the State increased on September 1 (for two months) to 30 cents per litre, against 18 cents previously, the rebate on fuel at the pump, and TotalEnergies added an additional 20 cents. Waving this red rag, Is the risk therefore high that current and future users of electric cars will quickly find themselves trapped, in particular by an explosion in the price of electrons? Could the electric vehicle market collapse?

In fact, the French should be globally protected. The first reason is that “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) and whose remarks reports. Remember that at home, the tariff shield of the State s applies and that the increase has so far been limited to 4%.The French government has also promised that this system will remain in place in 2023 and that the increase would be “contained and reasonable compared to (the) worst-case scenario”i.e. doubled invoices.

Ionity remains attentive to the terrible fluctuations in electricity prices…© Ionity

Unstoppable calculation

Admittedly, this temporary state protection in terms of price freezes does not prejudge a reversal from 2024 but, nevertheless, the exponential development of the electric car in our country and in Europe should not dry up: ” Even if we would have an increase in the electricity rate, there is a margin that is quite significant. At home, we are about two euros per 100 km, when in thermal we are between 12 and 16 € depending on the performance of the cars”, argues Mr. Molizon. A weighty argument, not to mention the discounted electricity rates during “hyper off-peak” hours…

A finding in any case corroborated by the sales of new 100% electric cars in France, including registrations rose from 2% in 2019, to 12% in the first eight months of 2022. Furthermore, the ban on the sale of new thermal vehicles in 2035 in Europe is an undeniable demonstration pleading in favor of the rise in power of the EV.

The street is paid at a high price

The same is not true for operators of public charging stations, on the road or near shops, and at heterogeneous prices, with or without a subscription to lighten the bill. At Allego for example. The pan-European electric vehicle charging network, which claims more than 28,000 charging sockets in Europe, has thus announced kWh rates increased by 15 to 20% this month in several countries, including France, “because of rising electricity prices across Europe”. And if at Ionity, its competitor, no price increase is planned, the network remains vigilant, stressing that “the current rise in energy prices does not spare operators”. Same story at EDF, which does not plan to increase the prices of public charging stations operated by its dedicated subsidiary, Izivia.

The Peugeot e-208, queen of electric sales in France in 2022
The Peugeot e-208, queen of electric sales in France in 2022© Alex Krassovsky

Long-term relevance

As for car manufacturers, the lights are rather green in this area since the oil shock last spring has attracted new buyers to models in their electric range. At Peugeot, the e-208 city car has even risen to the top of electric car sales in France during the first half of 2022. “The relevance of the switch to electric mobility must be assessed over several years (…) Increases in the price of refills, as long as they remain under control, do not reverse the economic logic of the switch to electric mobility. ‘electric.” Carpe Diem.