Electric vehicles: driving the transition Contents

1Introduction

The electric vehicle revolution

1.Electric vehicles (EVs) are changing the face of the global automotive sector. The global stock of electric cars rose to over 3 million last year, up from 14,260 in 2010 (illustrated in Figure 1). The International Energy Agency has estimated that the number of electric passenger cars and light commercial vehicles could reach 125 million by 2030, on the basis of existing and announced policies, and there is potential to reach 228 million if governments increase their ambitions in line with international climate change goals.1

Figure 1 Global electric vehicle stock by year and engine type.

2.The UK is at the forefront of this revolution. In 2017 the UK ranked fourth worldwide by market share, with EVs representing 1.7% of all new car and van sales, and seventh by volume, with 47,250 EVs sold (Figure 2 and Figure 3).2 Projections by National Grid suggest that the UK stock of EVs could reach between 2.7 and 10.6 million by 2030, and could rise as high as 36 million by 2040.3

Figure 2 Sales of electric vehicles (battery electric vehicles and plug-in hybrid electric vehicles) by country in 2017.

Figure 3 Electric car market share in the top eight Electric Vehicle Initiative Countries in 2017. Source: IEA

3.This transition is of particular relevance to the Department for Business, Energy and Industrial Strategy (BEIS), due to the opportunities and challenges that the move from internal combustion engines to EVs would entail for the automotive industry, as well as the potential role that EVs could play in meeting the UK’s climate change mitigation targets. Under the Climate Change Act 2008, the Government has committed to reduce UK greenhouse emissions by at least 80% compared to 1990 levels by 2050.4 Transport is the largest emitting sector of the UK economy, accounting for 28% of all UK greenhouse gas emissions in 2017.5 Recent research indicates that EVs have the potential to reduce greenhouse gas emissions by over 50% compared with equivalent conventional petrol and diesel vehicles over the lifetime of their use.6 The EU has recently agreed to cut carbon dioxide emissions from cars and vans by 35% by 2030.7

4.The Committee on Climate Change (CCC) has recommended that if the UK is to remain on a ‘least cost’ pathway to the 2050 target, 60% of all new cars and vans sold should be electric by 2030, and all new cars and vans should be zero emission by 2035.8 The CCC’s technical assessment of the Road to Zero Strategy, published 11 October, concluded that:

“existing and newly agreed policies for road transport … are insufficient to ensure the reductions in emissions necessary to meet the 5th Carbon Budget in the most cost-effective way”.9

This assessment is line with earlier, repeated statements from the Committee that existing policies—including the Clean Growth Strategy and Road to Zero Strategy—do not go far enough to tackle transport emissions, putting the UK’s long-term carbon reduction targets at risk.10

5.Looking at broader cross-Government challenges, EVs are considered a key solution in the drive to improve local air quality. Poor air quality is the greatest environmental risk to public health in the UK, responsible for an estimated 40,000 early deaths each year, and the second largest cause of avoidable mortality after smoking.11 These health impacts are estimated to cost the UK economy over £20 billion per annum.12 The main pollutants of concern are nitrogen oxide, particulate matter and ozone, with risks to public health depending on local concentrations. The UK has been unlawfully breaching nitrogen dioxide limits since 2010, with road transport responsible for an average 80% of nitrogen oxide emissions in areas where the limits are exceeded.13 The House of Commons Joint Inquiry into Improving Air Quality reported in March that, despite publication of a national plan to tackle roadside emissions in 2017, there is “insufficient urgency in current policies to accelerate vehicle fleet renewal”.14

6.In light of these concerns, the Government has introduced a series of policy aims to promote the development of the EV market. Notably, it set an ambition to “ensur[e] almost every car and van is a zero emission vehicle by 2050” in 2015,15 which has been more recently accompanied by sales targets for 2040, and a goal for the UK to be a world leader in the development and manufacture of both zero emission vehicles and the batteries used to power them.16 This laudable aim will not be easy to reach. Major barriers include: the high costs of EVs and batteries; the limited choice of EV models; the small number of existing charge points; the technical challenge of managing increased electricity demand from EVs; the industrial challenges of moving to EV technology for automotive manufacturers, retailers and after-sales service providers. These challenges pivot around a central dilemma: how to increase the number of EVs on UK roads whilst simultaneously developing a national charging network, given the investment case for both depends on the pre-existence of the other.

Our inquiry

7.Our predecessor Committee launched an inquiry into developing the EV market in March 2017.17 This work was cut short by the dissolution of Parliament and the subsequent general election. The evidence submitted highlighted a number of barriers to EV development which appeared not to be adequately addressed by the then Government’s policies, but the Committee did not have the opportunity to investigate these in detail.

8.On 21 September 2017 we launched our inquiry, Electric vehicles: developing the market and infrastructure, to build on the evidence base collated by the former Committee. We sought:

9.In response to our call for evidence, we received 83 written submissions and held six oral evidence sessions between February and June 2018. These were in addition to the 58 written submissions received by our predecessor Committee, which we have reconsidered. We also received six letters from local authorities, and one from the Minister, in response to specific requests for information. On a visit to Norway, the world’s leading country for EV deployment, we held meetings with Ministers and government officials, the Energy and Transport Committee, Oslo City Hall, and the Norwegian EV Association, as well as a broad range of public bodies, research institutes and businesses involved in the EV, automotive and energy sectors. We also took the opportunity to visit Milton Keynes to see the EV Experience Centre and to hold discussions with stakeholders in the Go Ultra Low Cities initiative, and to visit the London EV Company’s electric taxi factory in Coventry. We are grateful to all those who took the time to contribute to our inquiries.

This Report

10.Chapter 2 of this report investigates the adequacy of the Government’s targets for EV deployment. Chapter 3 assesses barriers to EV purchase for motorists and options to mitigate these, focussing on cars and vans, whilst Chapter 4 considers the particular challenges to uptake of commercial EVs. In Chapter 5 we explore obstacles to the development of charging infrastructure, focussing on technological difficulties, the particular needs of rural areas, the role of local authorities and the potential for improved coordination and planning. Chapter 6 examines opportunities to maximise the industrial opportunities of the EV transition. In Chapter 7 we present our overarching conclusions.

Box 1 Definitions

For the purposes of this inquiry, the term ‘electric vehicle’ is taken to mean a vehicle with a battery that can be recharged by plugging in to mains electricity.18 This definition covers:

Government policies and targets often refer to ‘low emission vehicles’, ‘ultra low emission vehicles’ and ‘zero emission vehicles’. As this nomenclature suggests, such vehicles are defined in terms of tailpipe emissions. Ultra low emission vehicles are usually defined as vehicles that emit less than 75 grams of carbon dioxide emitted per kilometre (gCO₂/km) and that are capable of driving at least 10 miles with zero emissions.19 However, policies and incentives cite a much broader range of eligibility requirements, based on various emissions limits, zero emission mileages and European Emission Standards. Electric vehicles are represented in all of these vehicle categories.

1 The lower range of these estimates are based on current policies, whilst the upper range assumes that member countries of the Electric Vehicles Initiative fulfil their pledges to increase the EV market share to 30%. International Energy Agency, Global EV Outlook 2018 (May 2018); Bloomberg New Energy Finance, Electric Vehicle Outlook: 2018, (May 2018)

2 Committee on Climate Change, Reducing UK emissions 2018 Progress Report to Parliament (June 2018); Statista, Electric vehicle registrations as a share of total in selected countries worldwide in 2017

3 National Grid, Future Energy Scenarios (July 2018)

4 Climate Change Act 2008, Part 1

5 Committee on Climate Change, Reducing UK emissions 2018 Progress Report to Parliament (June 2018)

6 Cambridge Econometrics, Fuelling Europe’s Future (February 2018)

7 Financial Times, EU ministers agree 35% car emissions reduction by 2030 (10 October 2018)

8 Committee on Climate Change, Reducing UK emissions 2018 Progress Report to Parliament (June 2018)

9 Committee on Climate Change, Letter to Chris Grayling and Greg Clark (11 October 2018)

10 Committee on Climate Change, Government’s Road to Zero Strategy falls short, CCC says (10 July 2018)

11 Department for Environment Food & Rural Affairs, Air Quality: A Briefing for Directors of Public Health (March 2017); Environment, Food and Rural Affairs, Environmental Audit, Health and Social Care, and Transport Committees, Fourth Report of the Environment, Food and Rural Affairs Committee, Fourth Report of the Environmental Audit Committee, Third Report of the Health and Social Care Committee, and Second Report of the Transport Committee of Session 2017–19, Improving Air Quality, (7 March 2018)

12 Royal College of Physicians and Royal College of Paediatrics and Child Health, Every breath we take, February 2016, p.xiii

13 Environment, Food and Rural Affairs, Environmental Audit, Health and Social Care, and Transport Committees, Fourth Report of the Environment, Food and Rural Affairs Committee, Fourth Report of the Environmental Audit Committee, Third Report of the Health and Social Care Committee, and Second Report of the Transport Committee of Session 2017–19, Improving Air Quality, HC 433

14 Environment, Food and Rural Affairs, Environmental Audit, Health and Social Care, and Transport Committees, Fourth Report of the Environment, Food and Rural Affairs Committee, Fourth Report of the Environmental Audit Committee, Third Report of the Health and Social Care Committee, and Second Report of the Transport Committee of Session 2017–19, Improving Air Quality, HC 433

15 GOV.UK, UK government pledges bold ambition for electric cars, (3 December 2015)

16 Department for Environment Food & Rural Affairs and Department for Transport, UK plan for tackling roadside nitrogen dioxide concentrations: An overview, (July 2017); The Rt Hon Teresa May MP, PM speech on science and modern Industrial Strategy (21 May 2018); HM Government, Industrial Strategy: Automotive Sector Deal (January 2018)

17 Business, Energy and Industrial Strategy Committee, Electric vehicles: developing the market (September 2018)

18 Hydrogen fuel cell vehicles and conventional hybrid vehicles are also sometimes described as ‘electric vehicles’. For clarity we have chosen to ignore this technical definition, because these vehicles cannot be plugged into mains electricity.

19 HM Treasury, Company car tax for ultralow emission cars (August 2016), Box 1.A



Published: 19 October 2018