EV Time-of-Use (TOU) Rates Explained

When you switch to driving an electric vehicle (EV), one of the biggest changes to your household finances is your electricity bill. Fortunately, most utility companies now offer specialized Time-of-Use (TOU) rate plans designed specifically for EV owners. But what exactly are they, and how do they work?

In this guide, we will break down what an EV TOU rate is, explore real-world examples, and help you determine whether switching to one will actually save you money.

What is a Time-of-Use (TOU) Rate?

A traditional flat-rate electricity plan charges you the same amount per kilowatt-hour (kWh) regardless of when you use the power. Whether you bake a cake at noon or charge your car at 3:00 AM, the price is identical.

A Time-of-Use (TOU) rate plan splits the day into different pricing "windows." The utility charges a premium when demand on the electrical grid is high (peak hours) and offers a significant discount when demand is low (off-peak hours).

Because an EV is essentially a massive battery on wheels, it is perfectly suited for TOU plans. By scheduling your car to charge only during the cheapest off-peak hours (usually overnight), you can drastically reduce the cost per mile of driving.

The Peak and Off-Peak Windows

Let’s look at a real-world example from California to see how these windows function.

Pacific Gas and Electric (PG&E) EV2-A Plan:

• Off-Peak Window: 12:00 AM – 3:00 PM (Daily, including weekends and holidays)
• Peak Window: 4:00 PM – 9:00 PM (Daily)
• Partial-Peak Window: 3:00 PM – 4:00 PM and 9:00 PM – 12:00 AM

If you charge your EV at 1:00 AM on the EV2-A plan, you will pay the off-peak rate (roughly ~$0.31/kWh). However, if you plug in right when you get home from work at 5:00 PM, you will be hit with the peak rate (up to ~$0.62/kWh in the summer). Rates are estimates as of August 2026.

Worked Example: Flat Rate vs. EV TOU Rate

Let's assume you drive 1,000 miles per month in an EV that gets about 3.3 miles per kWh. You will need roughly 300 kWh of electricity to charge your car each month.

Scenario A: Flat Rate Plan (e.g., $0.40/kWh all day)

• 300 kWh x $0.40 = $120.00 / month to charge.

Scenario B: PG&E EV2-A Plan (100% Off-Peak Charging)

• You use your car's built-in scheduler to only charge between Midnight and 3:00 PM.
• 300 kWh x $0.31 = $93.00 / month to charge.

By switching to the TOU plan and managing when you charge, you save $27 a month (or over $300 a year) just on your vehicle charging.

The Catch: Whole-Home Pricing

It is critical to understand that on most EV TOU plans, the variable pricing applies to your entire home, not just the car charger.

This means that if you run your air conditioning, do laundry, and run the dishwasher during the 4:00 PM to 9:00 PM peak window, you will be paying the expensive $0.62/kWh peak rate for all of those appliances.

When is it NOT Worth Switching?

An EV TOU rate isn't the best choice for everyone. You should avoid switching if:

1. You can't shift your household usage: If you have a large, busy household that uses massive amounts of electricity during the late afternoon and early evening (and you cannot shift that usage), the higher peak rates might wipe out any savings you gained by charging the car overnight.
2. You have a small battery and commute long distances daily: If you must plug in immediately upon getting home to have enough range for the next day, you will be forced to charge during peak hours.
3. You already have a better plan (e.g., Solar): If you have rooftop solar paired with an older, favorable Net Energy Metering (NEM) agreement, your current flat or tiered rate might still be better than an EV-specific TOU rate.

FAQ

Do I need a special smart charger to get a TOU rate? Not usually for a basic TOU rate (like PG&E's EV2-A). The utility simply reads your smart meter at the street. However, some advanced tariffs (like Octopus Energy's Intelligent Octopus Go in the UK) do require a compatible smart charger or a connected vehicle to automatically schedule charging.

How do I make sure my car only charges off-peak? Almost all modern electric vehicles have a "scheduled charging" feature built into the dashboard infotainment screen or the companion mobile app. You simply tell the car, "Only charge between 12:00 AM and 8:00 AM," and it will wait to draw power until that time, even if you plug it in at 5:00 PM.

Next Steps

Ready to see how much you could save? Head over to our Rate Check tool to compare plans, or use our Install Cost Calculator if you are still budgeting for your home charging setup!