Octopus asked ministers to cover EV losses
Plus, I reveal OEV is seeking to raise hundreds of millions in new debt funding
Hello, I’m Tom Riley, and welcome back to The Fast Charge, a British EV newsletter.
Top story in the newsletter this week… I can reveal that Octopus Energy’s EV arm is seeking to raise several hundred million in fresh debt funding, as a document obtained by The Fast Charge reveals the UK’s largest energy supplier lobbied ministers to cover losses on its EV fleet.
Elsewhere… The government excludes VAT from its charging price review, flash charging comes to Britain, and EVA England publishes a fresh paper highlighting how the EV transition is at risk of becoming two-tier.
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🐙 Octopus Electric Vehicles has a £111m hole - here’s how it’s trying to plug it
Summary: The EV leasing business that sits under Octopus Energy is lining up to raise hundreds of millions in new debt funding, The Fast Charge has learned. This comes despite the company having raised £2 billion since its founding in 2018, with £500 million of that only being secured in November 2025.
According to its latest accounts… Octopus Electric Vehicles (OEV) ended 2025 with a net liability position of £111 million. This is an increase from £76 million in the previous year. Auditors at Deloitte only signed off on OEV’s accounts because of a letter of support from its parent, Octopus Energy Group. Without this support, the business would be unable to continue operating.
While continuing to operate at a loss… A source with knowledge of the current dealmaking has told The Fast Charge that the new money will go towards continued expansion. This was confirmed with another source close to Octopus, who added the company had no shortage of interest from financers and that investors remain very happy. The expectation is that OEV wants to capitalise on the increased interest in EVs, where new registrations are at record highs in the face of rising fuel prices.
I contacted Octopus about this story, including the debt funding, and they declined to comment on the record.
Let’s take a step back from the above… While sales are soaring today, they have not always been. And as a first mover, OEV is known to have had significant exposure in previous years to, in its own words, an “unprecedented decline” in EV residual values.
These words come from a consultation response written by OEV and obtained by The Fast Charge. The document is from early 2025, when the UK government sought views on amending the Zero Emission Vehicle mandate. In OEV’s submission to ministers, over the course of two pages, the leasing firm set out an idea for taxpayers to share in the losses on each leased car due to the “heightened volatility” of residual values. Octopus argued this would be akin to a “contract for difference“ model “rather than just a subsidy.”
Here’s a snapshot from OEV’s document that explains how the proposed scheme would work:
Octopus argues that their scheme would be good for taxpayers. Sources at Octopus have told me this idea was not unique to them, and that several other leasing firms made similar asks. Octopus believes its scheme could enable them to significantly lower prices for consumers, as a state-backed guarantee would provide the leasing industry confidence to expand. Octopus has said it believes the scheme would be net neutral or even positive for the public. I also understand that a private sector solution is being explored alongside asking for government support.
For now, the idea has not been adopted by the UK government. However, elsewhere, Octopus has taken several steps behind-the-scenes to shore up its balance sheet.
