The road ahead for our electric vehicle revolution

After two hectic weeks of COP26 climate pacts, declarations, protests and Alok Sharma’s tears the hard work must now really start to ensure that the commitments are carried through across the globe in order to keep the extremely challenging limit of 1.5 degrees warming within reach. The final Glasgow Climate Pact may not have lived up to expectations, particularly after the nations could only agree to ‘phase down’ fossil fuels, but the UK’s push to net zero continues apace and there is a particular governmental focus at present on electric vehicles (EVs). You may have missed Boris Johnson’s announcement at the CBI Conference at the end of November that regulations will be introduced to require new homes and buildings to incorporate EV charging points. The press found more value in reporting on Boris’ dog impression, his trip to Peppa Pig World and his 21 seconds of losing his way in the speech, but the EV charging point regulations announcement combined with a range of other government ‘EV’ measures and funding hopefully amounts to more than a Boris joke.

What’s the issue?

Transport is the highest carbon emitting sector of the UK economy, and road vehicles are responsible for more than 90% of the UK’s annual domestic transport CO2 emissions. Cars and vans alone are responsible for 70% of that total. In order to meet our Paris Agreement goals, and to keep the limit of 1.5 degrees warming in reach, the speed of transition to zero tailpipe emissions for UK road transport will be vital. EV sales in the UK are rising exponentially (EVs accounted for 15.2% of new UK vehicle registrations in September 2021, which compares with an average of 6.6% in 2020 and 1.6% in 2019). There are now around 600,000 zero and ultra-low emission vehicles on UK roads, around 100 different EV models to choose from, and a network of nearly 5,000 rapid chargers (up from 2,000 in 2018). But, it is estimated that the UK will need ten times the number of charging points by 2030 and 23.2 million passenger EVs by 2032. In short, there’s a long road ahead.

What is the government doing to speed up the transition to EVs?

At COP26 a number of governments (including the UK) committed to ‘rapidly accelerating the transition to zero emission vehicles to achieve the goals of the Paris Agreement’ and a number of other objectives including ‘working towards all sales of new cars and vans being zero emission by 2040 or earlier, or by no later than 2035 in leading markets’. But what is being done by the UK government (and others) to ensure that we’re firmly on the petrol / diesel-free road to net zero 2050? Well, quite a lot actually. In November 2020 Boris announced his Ten Point Plan for a Green Industrial Revolution, which included commitments to end the sale of new petrol and diesel cars and vans by 2030 and for all new cars and vans to be fully zero emission (which means no hybrids too) from 2035. The Plan also trumpeted the government’s commitment of £2.8 billion to support the transition to 2030 and 2035, which is comprised of:

• £1 billion to support the electrification of UK vehicles and their supply chains, including the development and mass-scale production of electric vehicle batteries and other technologies. The Automotive Transformation Fund will provide the first £500 million over the next four years, securing investments in strategic technologies including battery cell manufacturing, electric drives and motors, power electronics and fuel cells;
•  £1.3 billion to accelerate the rollout of charging infrastructure, targeting support for rapid charge points on motorways and major roads; and
•  £582 million for consumer grants up to 2023 to stimulate demand for EVs.

In October this year the government finally published its Net Zero Strategy, which restated the above commitments but also announced an extra £620 million of government support for zero emission vehicle grants and EV infrastructure including funding for local on-street residential charging. In addition, the strategy announced the government’s plan for a zero emission vehicle mandate (ZEV Mandate), which would require vehicle manufacturers to meet a certain percentage of zero emission vehicles sales each year. Manufacturers would earn ‘credits’ for selling qualifying vehicles and be required to hold sufficient credits each year to meet the target. The hope is that this would allow a smoother transition to the 2030 ‘no diesel and petrol car sales’ date, provide greater consumer EV/ZEV choice and maximise the economic benefit from the EV transition by providing clear signals to EV/ZEV investors. It is expected that the ZEV Mandate will be progressed in parallel with a new post-Brexit CO2 regulatory framework. Such a framework is expected to build on the existing CO2 framework, but will require CO2 targets to be ‘turned up’ over time to transition to 0g CO₂/km (ie zero emissions at the tailpipe) by 2035. The Climate Change Act 2008 could be used to set such CO2 targets as it permits the government to establish emissions targets in order to regulate emissions of CO₂. The 2008 Act also requires a trading element ie manufacturers could meet CO2 targets directly by ensuring their vehicles (or a proportion) are below the specified limit or by purchasing excess emissions credits from manufacturers that have beaten their target.

Will the EV charging infrastructure be ready for the revolution?

A key concern for consumers when buying their first EV is ‘range anxiety’ ie a worry that they will run out of charge whilst driving because of a perceived lack of charging points. However, the Net Zero Strategy and July’s Transport Decarbonisation Plan are clear in stating that the government is committed to ensuring that the UK’s EV charging infrastructure would meet the demand of users. The £1.3 billion plus a proportion of an additional £620 million will be used to support the rollout of rapid charging points on motorways, major roads and residential streets. £950 million of the above £1.3 billion will be directed towards the setting up of a Rapid Charging Fund to support the rollout of a high-powered network of charge points across England. The fund has the following ambitions: by 2023, to have at least six high-powered, open-access charge points (150-350 kW capable which charge three times faster than most current charge points, and can deliver up to ~150 miles’ range in 15 minutes) at motorway service areas in England; by 2030, increase that number to 2,500 such charge points across motorways and major A roads; and by 2035 around 6,000 such charge points. According to National Highways, it is confident that these numbers will be more than enough to meet demand.

The additional electricity demand that this high-powered charging will create would cause the national grid some major issues in some areas. To deal with this problem, National Highways announced in November that is investing an initial £11 million into creating energy storage systems (ESS) (essentially battery storage) to support rapid charging in areas where the connection to the national grid is currently insufficient. This investment should be enough to fund over the next two years 20 ESSs at service stations where grid supply is currently too poor for rapid charging. Storing energy in quiet periods, ESSs then provide rapid high-power charging at busy times, until those motorway services can obtain increased power directly from the grid for rapid charging themselves. This too may go some way to alleviate range anxiety.

Another issue for potential EV buyers is whether they will be able to charge their vehicles at home or work. A recent survey of European EV drivers found that 33% of respondents were unable to install a charging point at home. For those people, the rollout of public on-street / A road / motorway charging infrastructure will be vital. For those who are able to install a charging point at home, grants of up to £350 are available through the Electric Vehicle Homecharge Scheme to pay for installation costs. The Workplace Charging Scheme (also up to £350) does a similar thing for businesses. In addition, as announced by Boris in November, developers of new (and potentially renovated) housing, supermarkets and offices will be required (via planning permissions or planning agreements) to install electric vehicle charging points, which the government estimates will create an additional 145,000 charging points per year in England.

Are we all incentivised to go out and buy an EV?

The above measures may be sufficient to lay the ground work for the requisite EV infrastructure and alleviate consumer ‘range anxiety’ concerns, but EVs remain financially out of reach for most people. With new EV models now regularly coming to the market, prices should reduce, but the government has just made purchasing an EV less attractive. It announced just last week that it is reducing EV grants from a maximum of £2,500 (for cars under £35,000 only) to a maximum of £1,500 (for vehicles priced under £32,000 only). The government claims to be ‘re-focusing vehicle grants on the more affordable vehicles and reducing grant rates to allow more people to benefit, and enable taxpayers’ money to go further.’ The press release further noted that government’s approach to EV grant support must be working – as the grant has reduced over time, EV sales have ‘soared’. So, we must hope that the market will act to reduce costs, the global semiconductor chip (vital for EVs) shortage will resolve, and global car and battery gigafactories can churn out sufficient supply to meet growing demand, etc. There are clearly plenty of significant challenges to overcome in the coming years, but perhaps we can dream of being on the cusp of a beautiful, green, and inclusive EV revolution.