These days, you can’t turn on the TV or radio without being inundated with up-to-the-minute news on ‘the cost of living’ crisis, which has been caused predominantly by high inflation and exacerbated by rising interest rates. Many families are feeling the squeeze and cutting back on life’s little luxuries such as meals out, holidays abroad, weekends away and gym memberships.
The crisis has affected everyday life for a substantial number of people, as the cost of mortgages, transport, utilities, fuel and groceries spiral out of control. Strict budgeting is now commonplace in households across the UK, as everyone looks at ways to economise and make ends meet.
For instance, the soaring cost of fuel has prompted drivers to think twice before getting behind the wheel, making only essential trips and in some instances, cutting out shorter journeys altogether, choosing to walk or cycle instead.
Escalating energy prices and fuel costs have driven inflation to its highest level in 40 years, according to the Office for National Statistics (ONS), realising an incredible 9.4% in the 12 months to June 2022.
Why are prices so high?
The current situation in Ukraine is a significant contributing factor to the high price of food, energy, crude oil and fertiliser; the war has given rise to untold supply-chain disruptions, leading to market turmoil, placing the global economy under immense pressure.
In the UK, local farm produce is the staple diet for much of the population, however, farmers are struggling to compete with the associated production expenses, such as cattle feed, fertiliser, machinery, transportation, energy and labour. All of these elements have pushed up the retail price of dairy products, meat, vegetables and fruits in the stores, leaving shoppers counting the cost.
The ongoing shortage of energy across the world, which is affecting many countries including the UK, has led to the perfect storm. Economic recovery has seen an increased demand for energy and an ensuing rise in wholesale prices for the providers; a cost that has been unavoidably passed on to the consumer.
Petrol and diesel prices are wholly dependent on the cost of crude oil from which they are produced. The price of crude oil has fluctuated quite dramatically over the last few years, collapsing entirely during the pandemic, as many businesses temporarily closed and travel restrictions were implemented, undermining demand. This decline in fuel sales saw the average UK supermarket price of unleaded fall below £1 per litre in May 2020.
As constraints lifted and life returned to normal, the market for energy prospered, but suppliers struggled to keep pace and prices started to climb. In recent months, the average price of petrol and diesel has shattered all previous record highs and continues to accelerate, so much so that filling the tank of a family hatchback now costs in excess of £100.
Could the switch to electric vehicles help?
There are close to half a million electric cars in the UK, and exorbitant fuel prices have encouraged more people to consider making the switch.
Electric cars are almost always more expensive to buy outright than their petrol or diesel counterparts, but slower depreciation and higher projected residual values help to make EVs a more lucrative investment. On the flip side, internal combustion engine (ICE) vehicles are depreciating rapidly, as car buyers become increasingly aware of the impending 2030 ICE ban and public interest in fossil fuel cars wanes.
Whilst EVs are often more expensive to insure, primarily due to the high cost of production, it is important to compare service/maintenance charges, road tax and mileage costs, as it is in these areas that EVs really come into their own.
EV service and maintenance charges are typically less costly than the equivalent traditional models, largely because they have fewer moving components and fewer parts prone to wear.
The cost of electricity is far less than the price of unleaded or diesel, meaning electric car cost per mile figures are considerably lower than ICE vehicles and hybrids. It is worth noting that purchasing EV energy via a monthly subscription plan is far more cost-effective than adopting a pay-as-you-go approach.
At present, fully electric cars are ‘zero-rated’ for vehicle excise duty (road tax), whereas combustion engine cars are taxed in line with their emissions and range from £165 to over £600, depending on the grams per kilometre of CO2 produced.
With fuel costs rising to unprecedented levels and no sign of this trend reversing, it is clear that the prospect of transitioning to battery electric vehicles (BEVs) is becoming increasingly attractive. In fact, EV sales are exceeding all forecasts, indicating this shift is already well underway.
TSG UK leading the charge
TSG is best placed to deliver the electrical infrastructure to support the exponential growth of EVs, by being recognised as the UK’s first choice engineering, construction and procurement (ECP) contractor, regardless of the technology behind it.
The recent appointment of Michael Mounteney as the UK Director of Electrical Business has provided TSG with the expertise, experience and impetus to take the EV charge business line to another level. The key acquisitions of DRB UK and UCP Choice have provided the skillset and the resource for TSG to meet the growing demand for charge stations across the country.
DRB UK specialises in EV installation, signage and branding solutions, electrical testing and preventative maintenance contracts, and UCP Choice, a leading national independent connection provider (ICP), delivers a full service including design, equipment supply, project management, high-voltage connections, installation and maintenance to the EV, battery storage and solar solutions.
