On Thursday 31 March this year, the government has said it will close its charger grant for homeowners who live in single-occupant properties such as bungalows, detached, semi-detached or terraced housing. This means the £350 subsidy will vanish for most families.
The impact of this move could mean the cost is off-loaded onto consumers or swallowed by manufacturers. In either situation, it’s not going to be good news for someone’s bank account. However, given the astounding pace of EV growth in the UK, I can’t imagine the demand is going to be hit that much, nor that manufacturers will be too concerned. In fact, most of them are booming – three of the largest makers in the UK, Pod Point, EO and myenergi (who make the Zappi) are either listed or set to list on the stock market.
And perhaps the millions their founders will make is richly deserved. After all, for about two-thirds of the population, charging on the driveway will be people’s no.1 refuelling spot when they switch to an EV. Already in the UK, there are thought to be up over 300,000 EV chargers installed at people’s homes – more than 10 times the number of publicly available devices.
The market itself also continues to be an area of huge development. Only in the last year, we’ve seen companies bring forward smarter devices, ones that offer vehicle-to-grid, and even superfast 3-phase chargers that can deliver rapid speeds at home.
However, there’s a slight snag to all this growth and innovation. Home chargers, much like the EVs they’re juicing up, are not exactly cheap. In fact, a basic smart charger still comes in at around £600 with installation included. But they can rise well over £1,000 and beyond depending on what extras you include, such as connecting it to solar panels, getting it tethered, or even what it looks like.
While some of us in the EV world may have become normalised to these sums, for most people having to spend over £600 on a plug socket might not be popular. And it’s not like people will have a choice either, as earlier this year the government introduced a law mandating all private chargers need to be ‘smart’ from 30 June 2022.
According to the government’s own consultation on this mandate, “the legislation may increase the purchase price of a chargepoint which could create a barrier for households that are less financially secure.” However, they argued this was ok because “the chargepoint is only a small proportion of the cost of an electric vehicle itself and smart charging will help offset costs and reduce overall systems costs in the long run.”
The government, therefore, concluded that the requirements wouldn’t discriminate against those who are less well off. To me, there are definitely great benefits but, perhaps, the impact of the initial cost for those on lower incomes is underestimated.
However, this is where a growing number of savvy entrepreneurs and businesses are spying an opportunity…
New pricing models
Much like with anything expensive these days, such as our homes, phones and cars, most of us won’t end up buying them outright. Instead, we’ll get a lease, buy second-hand, or hunt for deals - anything that can make purchasing more amendable to our wallets. And it’s this insight that will likely guide the home charger market in the coming years.
Already in 2022, we’ve seen the launch of ‘Egg’, the UK’s first chargepoint subscription scheme. The business, founded by Liberty Global, allows people to get a smart EV charger installed at their home for £30 a month. The chargepoint they get is a top-of-the-line Indra Smart Pro (ranked no.1 on Top Charger) which normally retails at about £800 with installation.
The scheme provides a cheap way to get a charger alongside dedicated support should it break. People can also cancel at any time. Presumably, Egg is banking on the fact that given these chargers are easy to maintain, they can get many years of service out of them.
I don’t expect Egg to be the last version of this and have no doubt other businesses will pop up with copycat products soon. One business that might be considering their chargepoint offer in the future is Octopus Electric Vehicles.
The company, which is part of Octopus Group, currently focuses on getting people into EVs. As part of their salary sacrifice offer, they provide a free charger to customers. They are not the only people who draw in customers with this benefit, it’s common across the motoring industry, though given the direction of the grant scheme, surely one that won’t survive?
Octopus offer customers a free home charger
Octopus disagrees. “Chargers that are provided as part of a bundle offering, similar to what we provide, will likely continue to be common even as grants fall away,” a spokesman for Octopus Electric Vehicles told me.
Though on the wider industry, he noted: “Where we may see some change in the future is in the payment schemes for chargers outside of these bundles. We will likely see chargepoint companies and installers offer monthly payment plans or subscriptions for new chargers, as they look to lower the upfront cost of making the switch to an EV.”
Pile it high!
While at the moment the home charger industry is occupied by specialist manufacturers, it would be wise to remember that most of us buy food from supermarkets, furniture at IKEA, clothes from places like ASOS, and household goods from Argos. And these are all companies that follow the popular business mantra of Tesco’s founder, Sir Jack Cohen, to “pile it high, sell it cheap”.
Ultimately, while there will always be demand for chargepoints that can link to solar panels, handle vehicle-to-grid and be app-controlled, many more people just want something that ‘does the job’. And I suspect once we see even more people buying EVs this year, it won’t be long until major companies use their economies of scale to offer cut-price smart chargers – the Amazon charger, you heard it here first!
Some businesses in the EV space have already caught onto this potential demand. The eCommerce store evonestop.co.uk offers a £225 home charger called the QUBEV – apparently the cheapest on sale in the UK – albeit it’s not ‘smart’.
One area that I don’t believe anyone has really thought about yet is the growth we could see in people selling pre-owned chargers.
Naturally, this practice has been pretty non-existent to date because people are, by in large, only just getting EVs in the first place. However, if you look at eBay or Gumtree, it’s evident some of the early EV adopters are now starting to shift some older charging devices.
The devices on sale are often second-hand Pod Point, BP Chargemaster and Rolec devices – the three chargers that have probably been around longest. Many are being sold for anywhere between £100 and £300.
To understand why these chargers were being sold, I spent a lot of last week asking people why they were selling them. Many of the responses I got suggested people’s old charger was making way for one that came with a “new car agreement”.
However, I also discovered a couple of individuals who seemed to be regular traders of chargers. To learn more, I spoke to a lovely chap called Steve whose side business is buying, selling and repairing used chargers.
“Sometimes they go on the same day and sometimes people are waiting for the right charger,” Steve says when I ask what the interest is like, “I’ve sold hundreds.”
Steve began selling chargers a few years ago when he came across a £90 BP Chargemaster that he was convinced he could sell for a higher price. His girlfriend of the time wasn’t convinced saying it seemed a hassle. They’ve since split up. But not before Steve was able to get his enterprise going.
“I just started tinkering… my father was an electrician; wires are in my blood.” Steve tells me that often he buys old chargers online or from trade-in sites. He’ll then test the charger is in working order. In the past, he’s converted type 1 devices to type 2 and has also imported parts to improve old chargers.
In my head, chargers have always seemed a mystery. However, Steve says it’s not complicated, “it’s just three wires; a live, neutral and earth. Like in a plug socket, only more powerful!” Steve believes some of the smart chargers on offer today are “overcomplicating” matters. He believes that people just want a “cheap way of charging at home without spending a fortune.”
Given Steve isn’t a professional installer or affiliated with any manufacturer, I wonder if anyone ever asks about the safety of the devices he sells. Steve explains that he is “honest with people” and in the past has taken back or replaced chargers that turned out to be faulty. His aim is to have “them out there charging their EVs”. He adds that ultimately it is “down to the user if they want to buy a second-hand piece of electric equipment”.
An example second-hand charger for sale
To me, this sounds like a great business. Why shouldn’t people be able to sell their chargepoints? Much like how we will ultimately need a strong used electric car market that people can access, it seems right second-hand chargers should be in the mix too. However, Steve expresses trepidation about the future.
“Some of the manufacturers require the charger to be commissioned by them,” he explains. This means, even if Steve sells someone a charger at a low price, that buyer will likely then need to pay to get a professional manufacturer authorised installer to turn on the switch – otherwise the device won’t work in some cases. Steve doesn’t see why this needs to happen for a “glorified socket” and sees it as a way for manufacturers to keep their foot in the door.
Whatever the case may be, for the time being, the business seems to be going well. Though Steve has noticed an increase in competition recently.
I guess we’ll wait to see what the rest of 2022 holds for home charging, though it certainly appears like the central objective will be making them more affordable in the face of the grant falling away and impending ‘smart’ mandate. If my conversation with Steve is anything to go by, the demand is certainly already here.