Will the price of electricity slow down electric cars?

Will the price of electricity slow down electric cars?


Discounts at gas stations and exploding electricity prices could make potential electric car buyers hesitate (AFP/PATRIK STOLLARZ)

Discounts at petrol stations and exploding electricity prices might make potential plug-in car buyers hesitant, but for professionals, the energy crisis won’t derail the transition to “zero-emissions” mobility.

At the end of August, the wholesale price of electricity for 2023 in France reached 1,100 euros per megawatt hour (MWh) compared to 85 euros a year earlier, a consequence of the invasion of Ukraine by Russia but also of the unavailability of nuclear power plants in France.

At the same time, at the beginning of September the State increased the discount for fuel at the pump to 30 cents per liter, compared to the previous 18 cents.

Such figures “necessarily mark the mood, so you can question some people about the decision to switch to electric mobility,” concedes Mathias Laffont, director of “uses and territories” of the French Electricity Union (UFE), an association industry union.

Recently, the craze for 100% electric cars is no less spectacular: from 2% in 2019, they increased to 12% of new private vehicle registrations in France during the first eight months of 2022.

Growth will accelerate given the pressure on internal combustion vehicles, between traffic restrictions and a ban on sales by 2035. With plug-in hybrids, the vehicle fleet can recover autonomy by connecting a million units to the network.

Will its users be trapped by an explosion in the price of electrons? In fact, the French should be protected globally. First of all, “80% of recharging is done at home and at work,” says Clément Molizon, general delegate of the National Association for the Development of Electric Mobility (Avere-France).

– Tariff shield –

At home the tariff shield is applied and the rise has so far been limited to 4%. The government promised that the device would remain in place by 2023 and that the increase would be “contained and reasonable compared to (the) worst case scenario”, meaning bills would double.

“Although we have an increase in the price of electricity, there is a margin that is quite important. At home we are around two euros per 100 km, when in thermal conditions we are between 12 and 16 euros depending on the performance of the cars”, adds Mr. .Molizon.

Especially since some providers offer discounted prices during “high demand” hours, late at night or early in the morning.

On the other hand, the question of increases for the operators of public recharging points, on the road or near shops, and at very heterogeneous prices, with or without subscription that allows them to reduce the bill, is beginning to be considered.

Some points are oriented “top of the range”, especially in the main axes, with powers greater than 50 kW for fast recharging, and their prices are affected.

Allego, which claims more than 28,000 charging sockets in Europe, announced that kWh prices have increased by 15-20% since the beginning of September in several countries, including France, “due to the increase in electricity prices throughout Europe”.

The beginning of a general movement? “We don’t expect very big repercussions before 2023”, answers Clément Morizon, instead “there are several important contracts that will expire next year”. And not all operators are equally exposed to wholesale prices.

Ionity, a competitor of Allego, points out that “the current rise in energy prices does not spare operators” and says to be vigilant. “At this time, however, no price increases are planned.”

Same story at EDF, which is currently not planning to increase prices at public charging stations operated by its dedicated subsidiary, Izivia.

And manufacturers, such as Peugeot, whose e208 has risen to the top of electric car sales in France, or Renault, whose Mégane e-Tech has just hit the market, say they are quite calm: the spring oil shock has attracted to new buyers.

PSA

For Laffont, “the relevance of the transition to electric mobility must be evaluated over several years”, and the increases in the price of recharging, as long as they are kept under control, “do not reverse the economic logic of the transition to electric mobility”. “.

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