Electric vehicles: driving the transition Contents

Summary

Electric vehicles (EVs) represent exciting opportunities for the UK: as a technology to reduce greenhouse gas emissions from our largest-emitting sector; as a tool to reduce local air pollution, the second-highest cause of avoidable mortality in the country; and as a new industry with substantial export opportunities. International market trends suggest that electric cars and vans will reach price equivalency with internal combustion engine (ICE) vehicles by the mid-2020s, and that EV sales will overtake petrol and diesel sales by the late 2030s. The UK’s automotive sector will need to take a lead in this transition if it is to remain a major player in the global market. A shift away from ICEs to zero emission vehicles on UK roads is further essential if we are to achieve our national decarbonisation targets at least possible cost.

Targets

Recognising these challenges, the Government has set ambitions to ensure that almost every car and van in the UK is a zero emission vehicle by 2050, and to make the UK a world leader in EV and battery technologies. However, its targets for 2040–to phase out sales of new ’conventional’ petrol and diesel cars and vans, and to require all new cars and vans to be ‘effectively’ zero emission–are vague and insufficiently ambitious to deliver on its longer-term aims. If the Government is genuinely committed to leading the EV transition and meeting its decarbonisation targets, it needs to promote investment in this new technology by clarifying and increasing the ambition of its sales targets. We recommend that the Government bring forwards a clear, precise target for new sales of cars and vans to be truly zero emission by 2032.

Purchase support

The upfront costs of purchasing an EV remain very high relative to ICE vehicles. Significant additional deterrents to EVs include ‘range anxiety’ (the concern that an EV will not have sufficient charge to complete a given journey) and the limited choice of vehicle models. These factors mean that incentives are required to encourage motorists to make the switch to EVs. However, the Government has recently announced sudden and substantial cuts to the Plug-in Grant Scheme, in a move that runs counter to the advice of the Committee on Climate Change and witnesses to our inquiry. We recommend that purchase support for EVs should be maintained at October 2018 levels for the time being, and more generally until the cost of EVs nears price parity with conventional ICE vehicles. In addition, existing grants and tax incentives are in practice only accessible to wealthier motorists. The Government should explore more creative support options to ensure that all motorists can benefit from EVs, for example through car clubs and the second-hand market.

The current fiscal regime for EVs provides inconsistent messages about the Government’s ambitions for EVs. We recommend that the Government aligns new fiscal changes with the zero emissions target. EVs should be promoted by preferential Vehicle Excise Duty rates and other incentives, and preferential rates on company car tax for EVs should be brought forward without delay.

Commercial vehicles

Commercial vehicles have been largely overlooked by emissions reduction policies to date. We recommend the Government set firm targets for the deployment of ultra low emission commercial vehicles, and consider replacing the voluntary target for emissions reductions from HGVs with a firm target, should progress fall off track.

Charging infrastructure

Poor provision of charging infrastructure is one of the greatest barriers to growth of the UK EV market. The existing charging network is lacking in size and geographic coverage, with substantial disparities in the provision of public charge points across the country.

We welcome assessments by National Grid, and others, that the EV transition is unlikely to present a risk to the security of national electricity supply. Adverse impacts are more likely to be experienced on distribution networks. The cost of managing these impacts can be reduced through smart charging, with vehicle-to-grid technologies offering the potential for further savings in the future. We strongly recommend that the Government make full use of powers introduced in the Automated and Electric Vehicles Act 2018 to make regulations to provide an extensive, reliable and standardised public charging network. Any new generation capacity built to meet increased electricity demand from EVs must be low carbon, to ensure that EVs contribute to national decarbonisation targets.

The Government’s ambition to develop national charging infrastructure is at odds with its decision to leave delivery largely to local authorities (LAs) and private actors. A whole systems perspective is needed to identify solutions that will deliver required functionality at least overall cost, and which will ensure adequate provision of charge points nationwide. We recommend the Government recognise its responsibility in this role and coordinate a shared approach to planning national charging infrastructure at least cost by December 2019.

The Government should also review the financial and technical support it provides to LAs to develop charging infrastructure. We recommend that the Government introduce a strategy to support LAs that have been less successful in accessing funding so far by 2021. We further recommend the Government proactively engage with LAs and other stakeholders to identify mutually agreeable charging solutions for motorists without off-street parking, and that the Government increase the flexibility of funding so that LAs can install charging infrastructure that fits in with local priorities.

The nature of ‘sufficient provision’ for charge points will differ across geographical regions. We recommend that the Government sets out a strategy by June 2019 that allows for the nature of local provision to be determined locally, and to deliver charging infrastructure to ‘difficult’ and remote localities, so that these are not further isolated by the EV transition. We also recommend that the Government subsidise the provision of rapid charge points in remote and rural areas without delay and by 2022, as recommended by the National Infrastructure Commission.

Industrial opportunities

The automotive sector is a major contributor to the UK economy. The industry must move with—and ahead of—the transition to EVs that is already underway at the global level, if the UK is to retain its share in this global market. The Government should work to create an attractive investment environment that will encourage manufacturers to locate new EV facilities in the UK, and to repurpose, rather than retire, existing ICE production lines for EVs. Policies set out so far to support battery technology such as the Faraday Challenge are welcome, but they are not sufficient to enable the UK to overtake existing world leaders in battery production. Longer-term, 10-year support with a strategic focus on high-value niche areas where we already hold a comparative advantage is the best approach to help the UK take a leading edge in battery supply chains. The Government should also explore potential to develop UK expertise in nascent areas such as EV and battery disposal and recycling.

EVs present a substantial technological shift, which will require workers across the automotive supply chain to develop new skill sets. The current shortfall in EV skills is increasing the running cost of EVs, deterring dealerships from entering the EV market, and putting workers’ lives at risk. We recommend the Government develop EV-specific qualifications for mechanics and engineers. Government and business should also work together to develop a joint plan to help companies repurpose ICE manufacturing facilities, to help workers develop new EV skills, and to ensure that independent dealerships and mechanics are equipped to advise on buyers on EV options and to conduct repairs safely.





Published: 19 October 2018