Low emission cars Contents

1Plans for zero-emission cars and progress

1.On the basis of a Report by the Comptroller and Auditor General, we took evidence from the Department for Transport and from the Department for Business, Energy & Industrial Strategy on low-emission cars.1

2.Transport is the largest source of carbon emissions in the UK with a large proportion of these emissions coming from cars. Building on previous strategies, in 2018, the Department for Transport published The Road to Zero, which set out government’s ambitions for cleaner road transport. The strategy aimed to reduce carbon emissions from cars by promoting the use of ultra-low and zero-emission cars and creating the infrastructure that supports this. These vehicles are partly or fully powered by battery (electric cars) or hydrogen.2

3.The Department for Business, Energy & Industrial Strategy and the Department for Transport created a team called the Office for Zero Emission Vehicles (OZEV) in 2009, which works across government to support this transition. Between April 2010 and March 2020, OZEV spent a total of £1.1 billion on funding grants for ultra-low emission cars and related charging schemes. By the end of September 2020, there were over 348,500 ultra-low emission cars licensed in the UK.3

Targets for zero-emission cars

4.By 2050, government would like almost all cars to emit zero carbon. Government has set ambitious targets to increase the number of zero-emission cars on the road; new petrol and diesel cars will be phased out by 2030 and from 2035 all new cars will be zero-emission. The Department for Transport told us these ambitious targets are based on advice from the Climate Change Committee and from consultation with stakeholders, including manufacturers. It highlighted that to reach net zero for the whole economy, road transport needs to decarbonise rapidly, as this segment represents 90% of all transport emissions.4 In its view, the targets represented a “proper balance” between ambition for net zero and achievability and deliverability.5

5.We asked the Departments what they thought was going to change between now and 2030 to deliver the step change required to meet Government’s targets for zero-emission cars.6 The Department for Transport explained that in 2020, new ultra-low emission cars were just under 11% of the new car market, up from 3% in 2019. As such, it saw 2020 as a “breakthrough” year with an acceleration of uptake starting to happen. It believed the conditions needed to support take-up were increasingly available.7 It pointed to a strong infrastructure network and UK manufacturers committing to electric cars as evidence that the UK is well positioned to capitalise on the growth of the market. The Department for Business, Energy & Industrial Strategy also explained that the target is a spur to change in itself and that by setting it, government is establishing clear expectations for the market.8

6.As part of the Ten Point Plan for a Green Industrial Revolution, Government has committed to publishing a delivery plan in 2021 for achieving the phase out of new petrol and diesel cars from 2030, but this has not yet been published.9 In our previous report on achieving net zero, we stressed the importance of publishing key strategies with clear timelines, milestones and decision points.10

Progress in addressing consumer barriers

7.We were interested in hearing the Departments view on what barriers needed to be overcome to achieve the targets for zero-emission cars. The Department for Transport told us it had undertaken a lot of research into this area, and the two most substantial factors had been price and range anxiety—the range cars can travel without recharging. Other barriers also exist, such as the appeal and acceptance of electric cars for consumers.11 The Department said it has used the Go Ultra Low publicity campaign to understand and assess what factors are influencing people’s choices towards ultra-low emission cars.12

8.The Department told us it has used the plug-in car grant, which reduces the purchase cost of qualifying new cars, to address the price barrier.13 The grant has been incrementally scaled back since 2018, and at the time of our evidence session contributed up to £3,000 off the purchase price of an eligible car worth under £50,000. One week after our session this was reduced, so it now contributes up to £2,500 towards eligible cars priced under £35,000.14 We put our concerns that the cost of ultra-low emission cars are still too high for many to the Department. The Department acknowledged that there is still a price difference between electric and petrol and diesel cars, but informed us that 13 electric vehicles now cost below £30,000 with a couple costing closer to £20,000. The Department argued that the price gap is closing “rapidly” and it is now starting to see critical mass which should enable costs to fall.15

9.Upfront costs are not the only element making electric cars costly.16 We were concerned about the cost of replacing batteries, especially for second-hand cars, and asked the Departments to explain how this is going to be managed. The largest part of the cost of an electric vehicle is the battery, but the Department for Transport believes that costs are falling as the technology develops and manufacturing scale increases. It believes that early concerns of battery degradation have not materialised. The Department for Business, Energy & Industrial Strategy pointed out that the cost of running an electric car would be “significantly cheaper” than a petrol vehicle, with the Department for Transport estimating it costs, on average, around 1p per mile to run a zero-emission vehicle in comparison to 10p per mile for a petrol or diesel car.17

10.We asked what the Departments were planning to do about the higher cost of charging on the public network compared to home charging.18 A National Audit Office analysis of public data suggests that charging at home can cost between 59% and 78% less than charging on the public network.19 The Department for Transport told us it expects there to be more competition in the market and innovation which may benefit consumers in terms of the price paid for electricity. It also suggested that electric cars might, for example, act as energy stores when plugged in at home to feed back to the grid at peak time and recharge at times were there is lower demand and cost. It thinks rapid charging in public, however, will always be more expensive than charging overnight at home.20

11.The Department for Transport acknowledged range anxiety as a barrier to take-up and is providing investment for infrastructure, specifically focusing on public and rapid charging. However, it told us that because 99% of all journeys are under 100 miles, electric cars are suitable for many journeys. It accepted that there had been scepticism about the technology for a number of years, including around range, but cited improvements to charging times and suggested that charging on longer journeys will cease to be an issue.21 The government has announced £1.3 billion in the Spending Review to help improve the availability of chargers.22

12.There is regional variation in the uptake of ultra-low emission cars in the UK, for example high levels of take-up in southern England, and we have been concerned about whether some locations, including rural areas, are missing out on the transition.23 The Department for Transport told us it has not targeted specific locations, instead taking a location-neutral approach to investment, and early take-up has been greatest in places with a higher density of traffic, where there are more charge-points and also affluence. Whilst there have been some targeted investments, such as through pilot schemes in places like Bristol and Milton Keynes, the Department told us it wants to make interventions on a UK-wide basis.24 It acknowledged though the need to work with local authorities to understand obstacles in specific areas and provide support so they can provide charging infrastructure.25

Charging infrastructure

13.The scale and reach of the charging infrastructure has grown over the past decade.26 The Department for Transport informed us that there are now 20,800 public charge-points in the UK, with 783 new charge-points created in the 30 days before our evidence session in March 2021, 124 of which were rapid.27 The Department told us that its interventions have been pitched to stimulate more rapid private investment, and achieve a good return and value for public investment. It saw Government’s role in developing the charging infrastructure as spotting market failures and unblocking problems.28

14.We challenged the Department for Transport on how it would ensure the charging infrastructure expanded in step with its plans for a very rapid expansion in the number of electric cars ahead of 2030. The Department told us it has not set targets for the number and type of charging infrastructure required to support the zero-emission vehicle transition because it expects private investment to drive this.29 The Department did not think it was for them to set the number of charge-points needed and highlighted the number of variables involved as evidence of the complexity of determining what might be needed.30

15.We asked the Departments about their strategy to avoid “notspots” - areas where the market does not deliver because uptake is insufficient, especially for rural areas. The Department for Transport told us that the majority of electric car owners will charge at home overnight and start journeys with 100% charge.31 Data from the English Housing Survey indicates that 33% of households in England do not have access to off-street parking, and this increases to 68% for people living in social housing.32 The Department expects charging to be also available at key destinations, such as car parks or supermarkets, in conjunction with the private sector.33

16.For longer journeys, drivers can access public infrastructure on the strategic road network. The government has funded infrastructure so that on the strategic road network, drivers are never further than 20 miles from a rapid charge-point and will spend £950 million through Project Rapid for rapid charge-points at motorway service areas in England.34 The Department for Transport told us it is aiming for at least six rapid charge-points at motorway service areas in England by 2023, with up to 12 on larger sites. By 2035, it expects there to be 6,000.35

17.The Department for Transport informed us there will now be a “shift” in focus from funding for home charging to on-street and other publicly available local charging. The government has doubled investment for the current year for the on-street residential charge scheme and will be doubling it to £20 million for next year too. It has committed £90 million to support larger local charging.36 The National Audit Office has however reported that the take-up of funding for local authorities to support on-street residential charge points has previously been poor with almost a third of the allocated funding of £8.5 million not used.37 The Department acknowledged that these programmes tended to be underspent and pointed to capacity and appetite at local authority level, and commercial interests focusing on rapid and destination charging as reasons for the slow take-up.38 We have heard from representative bodies that some local authorities have a lack of in-house expertise impacting on their ability to bid for funding.39 The Department told us that while it is not undertaking direct capacity funding, it is working with local authorities through the Energy Saving Trust to help them understand how to access funding and accelerate charging.40

1 C&AG’s Report, Reducing carbon emissions from cars, Session 2019–2021, HC 1204, 26 February 2021

2 C&AG’s Report, paras 1, 3

3 C&AG’s Report, paras 2, 1.4, 1.14, 2.4

4 Q 6

5 Qq 6–7

6 Qq 7–8

7 Qq 1–9

8 Q 17

9 C&AG’s Report, para 3.8; HM Government, The Ten Point Plan for a Green Industrial Revolution, November 2020

10 Committee of Public Accounts, Achieving Net Zero, Forty-Sixth Report of Session 2019–21, HC 935, 5 March 2021

11 Qq 10–11; C&AG’s Report, para 2.17

12 Q 26

13 Qq 11, 17; C&AG Report, para 1.11

14 C&AG’s Report, para 2.11; GOV.UK Plug-in car, van and truck grant to be targeted at more affordable models to allow more people to make the switch, 18 March 2021

15 Q 10; C&AG’s Report, para 2.5

16 Q 10

17 Q 29

18 Q 46

19 C&AG’s Report, para 2.26

20 Qq 46, 53

21 Q 11

22 Q 12

23 Q14; C&AG’s Report, para 2.4, Figure 8

24 Qq 14, 41

25 Q 15

26 Q 31; C&AG’s Report, para 12

27 Qq 12, 31

28 Q 13

29 Q 31

30 Q 32

31 Q 35

32 C&AG’s Report, para 2.21

33 Q 35

34 Qq 12, 35

35 Q 12; C&AG’s Report, para 2.24

36 Qq 38, 40

37 C&AG’s Report, para 2.19

38 Q 39

39 British Parking Association submission page 2

40 Qq 38, 41

Published: 19 May 2021 Site information    Accessibility statement