18.We questioned the Departments about the overall environmental and social impacts of the production and use of electric cars and whether they had undertaken analysis of the full lifecycle impacts of these vehicles, including production and disposal. The Department for Transport informed us that it has looked at the lifecycle emissions associated with electric vehicles, including reviewing global studies, and found that they are cleaner than internal combustion engines, although they cannot mitigate all emissions. The Department estimates that electric vehicles are between 30% and 40% lower in carbon emissions in their lifetime than internal combustion engine cars. It stated that electric cars also produce fewer particulates in the air than internal combustion engines, as these are non-existent from the tailpipe and fewer come from braking as the engines are regenerating the battery during this time. The Departments for Transport and for Business, Energy & Industrial Strategy wrote to us and quoted that a study for the European Commission from September 2020, found a typical new battery electric vehicle, operated in the UK, is considered to have about 35% of the lifetime greenhouse gas emissions of an equivalent petrol vehicle, and 41% of an equivalent diesel vehicle.
19.The proportion of emissions is greater in the manufacturing phase than during the on-the-road phase for electric cars, which means the geographical location of manufacturing is an important factor. The Department for Transport believed that car manufacturers are “very cognisant” of the location of car assembly as this can affect the overall carbon impact, with some manufacturers using renewable energy to mitigate this, for example Tesla with solar panels in Nevada, or BMW sourcing 100% renewables for its i3 plant. The Department pointed to the fact that producing a car in a country with a decarbonised energy grid would be better than a coal-generated grid.
20.With regard to the materials and supply chains used in producing zero-emission cars, the Department for Transport acknowledged the issues and told us that manufacturers are focused on developments in this area. For example, Tesla and Renault are looking at developing batteries and electric motors which do not use rare earth materials. The Department expects the market for lithium to expand and pointed to the large quantities in Cornwall. It told us that it is not within manufacturers business interests to be sourcing products from volatile areas with supply chains that are unreliable or to be encouraging poor working practices, and that both manufacturers and the Department are focused on issues in this area.
21.There are a range of other issues that will need to be considered as part of the transition to zero-emission cars. We are concerned about the impact of lost taxes from fuel duty and the potential standstill in technological change for the internal combustion engine. The Department for Transport explained that technological changes for the internal combustion engine are not expected to stop as it is using regulatory instruments to continue to drive down carbon emissions in these engines, including for other vehicles like buses. The Department expects to publish a Green Paper on the post-EU regime for carbon emissions later in 2021.
22.We questioned the Departments about issues we had heard about businesses not able to charge vehicles indoors overnight due to their insurance policies. The Departments did not seem aware of this issue and when the Departments wrote to us, they stated the government does not intend to intervene in commercial decisions by insurers as this could damage competition in the market. We also asked how other types of vehicles, such as motorhomes, are being considered in terms of the transition. The Departments wrote to us after the evidence session and reported that the 2020 budget had reduced Vehicle Excise Duty (VED) liabilities for new motorhomes depending on the dates when they were first registered.
23.Another issue to be considered by the Departments is that, as more zero-emission cars enter the market, there will need to be people with the right skills in place to maintain them. The Department for Transport told us that this transition has already started and ensuring training is in place is a focus area of the Automotive Council.
24.The Department for Business, Energy & Industrial Strategy, having assessed a number of different scenarios for meeting net zero by 2050, has estimated that electric cars will increase electricity demand by around 20% by 2050 and we wanted to understand the network’s ability to cope. The Department explained that the increase in demand for electric vehicles is set within the context of an overall doubling of demand for electricity by 2050. The Department is approaching this from the perspective of generation and transmission and distribution networks; it told us mechanisms like the capacity market and contracts for difference are in place to obtain the right energy sources at the right time, and that transmission and distribution network operators are responsible for upgrading the network which they do within controls set by Ofgem. Not all changes to the system will push costs up, but currently, the Department estimates net changes to the energy system will add 2% to consumer bills in 2030.
41 Qq 50–51
42 Qq 50, 52
43 Letter from the Department for Transport and Department for Business, Energy & Industrial Strategy to the Committee dated 30 March 2021
44 Q 50
45 Qq 50, 55
46 Q 50
47 Q 50
48 Qq 30, 55
49 Q 55
50 Qq 53–54; Letter from the Department for Transport and Department for Business, Energy & Industrial Strategy to the Committee dated 30 March 2021
51 Qq 19–21; Letter from the Department for Transport and Department for Business, Energy & Industrial Strategy to the Committee dated 30 March 2021
52 Q 30
53 Q 47; C&AG’s Report, para 2.28
54 Q 47
55 Q 48