In February 2020, the UK Government announced that a proposed ban on the sale of new petrol, diesel and hybrid cars and vans will be brought forward from 2040 to 2035 at the latest. The aim of the shift in dates is to ensure that second-hand versions of these vehicles are off the UK’s roads by the country’s target of carbon zero status in 2050.
Take-up of electric cars in the UK is currently low. While sales of electric vehicles rose by 144% from 2018 to 2019, they account for just 1.6% of new vehicle registrations. The Society of Motor Manufacturers said about the news, “it’s clear that accelerating an already very challenging ambition will take more than industry investment”. We manage data for a range of manufacturers in the auto industry, so we’ve taken a look at the steps required to get the UK ready for an all-electric future.
A reduction in vehicle costs
Due to the ongoing development of battery technology and limited economies of scale during manufacturing, electric cars tend to be more expensive than the petrol or diesel equivalent. Prices for the popular Nissan Leaf, for instance, start at £26,345. A grant of up to £3,500 is available to help consumers purchase an electric vehicle, but the scheme is due to end in March 2020.
However, a study last year by the International Council on Clean Transportation found that, once running costs are taken into account, the electric VW Golf is cheaper than its hybrid, petrol or diesel versions over a four year period. Expanding beyond one model, management consultancy Deloitte expects price parity across the market to be reached by 2024. This is driven by technological improvement: a report by Bloomberg suggests that cheaper batteries will reduce manufacturing and purchase costs. Battery costs were 57% of the cost of an electric car in 2015, but are expected to drop to 20% by 2025.
More charging facilities
The limited travel range of electric vehicles is a significant barrier to wider adoption. In a 2019 survey by YouGov for insurer Aviva, 81% of respondents cited range as a concern they had with the potential purchase of an electric vehicle. This was the biggest issue for future customers, followed by finding somewhere to charge the vehicle (cited by 74% of respondents).
Currently, there are around 11,000 locations in the UK with public charging points. A report by Deloitte on the infrastructure required to support the growth of electric vehicles estimates that the UK will need around 28,000 public charging points by 2030. This will require a £1.6 billion infrastructure investment. Analysis by Scottish Power estimates that 25 million charging points will be needed in total, including residential and workplace facilities. This has a projected cost of £45 billion.
According to Keith Anderson, CEO of Scottish Power, “More power needs to be devolved locally so that communities have a stronger voice in plans to decarbonise their neighbourhoods.” However, at present there is a lack of knowledge and resources within local authorities regarding the development of a charging infrastructure. There has been very low take-up of the Department for Transport’s scheme to encourage local authorities to install charging points, with participation from just five councils across the entire UK. Justin Meyer, general manager of charging point installer eVolt, told Wired, “A lot of the time, the councils haven’t engaged with the market, and then you find [the charging points] are not as effectively located.” He added, “Actually having somebody or a team in place, ready to effectively spend that allocated money, that’s where I see the issues coming from.”
User-friendly charging points
At present, reports state that there are between twenty and thirty different companies providing public charging points for electric vehicles. Often, each provider will require user registration and a swipe card or app download specific to their particular network. This creates barriers to use, particularly since public charging points will often be used for longer journeys, while providers tend to be grouped by region. Contrast this scenario with drivers buying petrol with the same debit card, wherever they go, with no registration required.
The 2018 Automated and Electric Vehicles Act is the UK Government’s response to this issue. The Act aims to ensure that public charging points are compatible with all vehicles, and that payment methods are standardised. The Act also gives the Government powers to ensure more charging points are installed at motorway service stations, while local mayors can require the major petrol station chains to install charging points on their premises.
Management of the National Grid
Experts believe that smart charging will be required to avoid a situation where all the country’s drivers charge their cars in the evening. The National Grid has modelled a range of scenarios and estimates that, in a high-adoption scenario, electricity demand at peak hours would increase by 30%. The Grid believes that incentives for off-peak charging, such as flexible electricity prices, would halve the amount of extra electricity needed to meet demand. Energy regulator Ofgem estimates that encouraging people to charge their vehicles outside peak hours will increase the number of vehicles that can be supported by the National Grid by 60%.
Malcolm McCulloch, leader of the Energy and Power Group at Oxford University, told Wired that, “if car charging could be done intelligently, then only 20 additional megawatts of power would be needed- that’s the equivalent output a reasonably sized offshore wind farm. If not, then the capacity of the National Grid would need another 20 gigawatts, which is double the amount of energy currently generated by all the UK’s nuclear power stations. In short, with good strategy, it’s an issue of power, not energy.”
Vehicle-to-grid technology is being explored by power companies and car manufacturers as a way of balancing demand for power. This technology enables vehicles to store electricity and then sell it back to the National Grid at times of high demand. For instance, Ovo Energy is trialling a vehicle-to-grid charger in conjunction with Nissan. The system uses an app to charge each customer’s car at periods of low demand and release surplus energy during peak periods.
Provision for tax and legacy industries
A shift from petrol and diesel to widespread electric vehicles has obvious implications for the UK’s existing network of petrol stations. The chains are planning for this scenario by collaborating with the electric vehicle industry. For instance, Tesco has teamed with VW and Pod Point to install 2,400 charging points at Tesco branches. Customers can charge their cars for free if they choose a 7kW charger, with a small charge for faster 50kW charging points.
In a different approach, BP has bought Chargemaster, a charging point installer. The aim is to roll out rapid chargers, including on BP’s forecourts. The company’s first ultra-fast 150kW charging units were installed at BP Cranford last August. The chargers deliver 100 miles of range in ten minutes.
While these moves provide some protection for the petrol and diesel industry, the Institute for Fiscal Studies calculates that there will be an annual £28 billion loss in fuel duty. The think tank recommends road pricing as a way of maintaining a tax on driving. Under the system, charges for using roads would vary according to the time of day and the location, so that some journeys would be taxed less heavily than they are at present. According to IFS economist Rebekah Stroud, “The government should set out its long-term plan for taxing driving, before it finds itself with virtually no revenues from driving and no way to correct for the costs – most importantly congestion – that driving imposes on others.”
Conventional internal combustion engines are relatively complex compared to their electric counterparts. To take just one example, there will be no need for engine oil changes once electric vehicles are the norm. Traditional car mechanics will find that there is significantly less work available.
According to Tony Seba of thinktank RethinkX, “The electric vehicle has about 20 moving parts and the internal combustion automobile engine has about 2,000. Electric vehicle parts get less wear than those in gasoline vehicles, which provide locomotion through explosive force. Even those parts that do need to be changed, they need to be changed far less than with internal combustion engine automobile. [In the US] you have about 4,000 department store locations that do services. You have 16,000 dealer repair locations and you have something like 70,000 general kind of mom-and-pop repair shops. And essentially, most of these are going to be wiped out.”
Electric car companies might potentially be required to improve access to their software for smaller garages. And the education system has a role to play in re-skilling the workforce.
The roll-out of electric vehicles will require consolidation of the fragmented initiatives currently underway. In particular, the UK Government will need to quickly create a coherent strategy for vehicle charging and power consumption to meet the new 2035 deadline.
Ministers could do worse than look to the success of other European countries. In Norway, for instance, electric vehicles accounted for almost 60% of new car purchases last March. According to David Bailey, Professor of Business Economics at Birmingham University, “In Norway EV drivers can use bus lanes, parking is often free, there are tax breaks on the cars, and the infrastructure is there to support it. It’s the joined-up thinking needed to get people to buy EVs.”