In his opening parliamentary speech as prime minister, Boris Johnson said the UK will be the home of electric vehicles in the future – but it appears it has a lot of challenges to overcome before it reaches that feat.
In July, Britain became the first nation to propose a target of achieving net-zero greenhouse gas emissions by 2050 – stepping up its efforts following a previous goal to reduce its carbon footprint by 80% in the same time frame.
But for that to be possible, the country will have to completely overhaul its transport industry, with the introduction of more EVs at the forefront of those plans.
EVs are viewed globally as an integral tool to combatting climate change and look almost certain to be the future of the automotive industry – but China and other countries are already leading the charge ahead of the UK.
Andy Eastlake is managing director of the Low Carbon Vehicle Partnership (LowCVP), a public-private partnership that aims to help move the UK to using more sustainable transport.
He says: “The UK has an opportunity as an EV producer and we have had quite a good picture there in that respect.
“But I think there is a danger that we will fall behind in that production capability, so there is a lot of focus on battery technology and production in the UK.”
Here, NS Energy outlines the future for EVs in the UK and the challenges it faces in becoming a leading nation in the technology.
What is the UK government doing to push EVs?
Road to Zero
The government launched its Road to Zero strategy last year, pledging to make at least half of new cars ultra-low emission by 2030 and cease the sale of new conventional petrol and diesel cars and vans by 2040.
But the Committee on Climate Change (CCC), an independent advisor on a low-carbon economy to the government, said the plan “falls short” of what is needed.
As the automotive industry is the most polluting sector in the UK economy, the committee had hoped for a ground-breaking strategy to tackle emissions from transport.
Eastlake says the political appetite and ambition from the government shouldn’t be doubted, but that clearer policies are required.
He also believes the 2040 strategy is unclear about whether vehicles such as hybrids are included or not and that the timescale for the pledge is up for debate, given there isn’t much of a target in between now and that date.
“Having some clearer near-term targets and very strong long-term targets is a key policy that allows people to make decisions,” he adds.
“There are a number of stronger policy levers that could be pulled to send a very strong message that this is the direction we’re going in – and it’s going to be there probably faster than most people realise.”
Tax cut for company car drivers
The government has announced a strategy to get company car drivers using EVs, by making pure electric vehicles free of benefit-in-kind (BIK) tax in 2020/21.
BIK is a tax implemented on employees who receive benefits or perks on top of their salary – so if someone has a company car for private use, they would usually have to pay a BIK contribution.
But now company car drivers who have a pure electric vehicle with zero tailpipe emissions will be taxed at 0%.
Eastlake says the strategy had an “immediate effect” on the market, but said short-term, unplanned policy changes can be very disruptive to the market.
“If we can get a much clearer long-term policy with a clear trajectory, it will allow more people to get on board and progress along the EV pathway, rather than just the people who are able to respond very quickly,” he adds.
Jaguar Land Rover grant for EVs
In July, Theresa May’s government provided Jaguar Land Rover (JLR) with a £500m ($644m) loan guarantee to help accelerate Britain’s largest carmaker’s progress in the global EV race.
The former prime minister also held a meeting with industry leaders from Aston Martin, BMW, Nissan and Vauxhall, as well as energy groups BP, Shell and National Grid.
In the meeting, May said the funding pot would include £500m from UK Export Finance alongside another £125m ($161m) from commercial lenders.
The companies agreed to set up a green mobility transition board that will formally bring together government, industry and environmental groups to coordinate plans for a switch from traditional to electric vehicles.
Role of batteries in the future of electric vehicles in the UK
Alongside Johnson’s statement about Britain aiming to become the home of EVs, the prime minister also claimed they will be powered by British-made battery technology.
But while the UK currently has no plans for any large-scale battery manufacturing facilities to add to its single “gigafactory” at Nissan’s Sunderland plant, a report by the Faraday Institution, an independent UK research body, states that production capacity in Europe is expected to reach 130 gigawatt-hours (GWh) by 2025.
It means the UK, currently the fourth largest automotive manufacturer in the continent, could fall behind other countries, with Germany, Hungary, Poland and Sweden among those with big plans for EV battery production.
Another issue facing production is that manufacturing electric vehicle batteries requires in-demand raw materials such as cobalt, with about 70% of the world’s cobalt coming from the Democratic Republic of Congo (DRC).
Benchmark Mineral Intelligence senior analyst Casper Rawles noted that the region is among the most politically unstable, volatile and dangerous places on earth.
And China’s refineries, fed in large part by feedstuff from Chinese-owned mines, supply 80% of the world’s battery-ready high-grade cobalt.
This means that alongside the potential human and environmental issues of mining for cobalt in places like DRC, China’s control over the material could lead to supply disruptions – potentially creating barriers to the industry’s growth in the UK.
Future of electric vehicle supply and demand in the UK
While National Grid claims it already has the necessary power to charge the 36 million EVs predicted to be in operation by 2040, the UK’s power distributor has acknowledged it will lack the ability to charge all EVs simultaneously.
Matthew Walters, head of consultancy and customer data services at fleet management services provider LeasePlan UK, says: “This highlights an obvious issue – many drivers will want to charge their cars at the same time, either during work or in the evening.
“If there is not enough energy to meet this demand, it could lead to large areas being put at risk of power blackouts.
“Consequently, entire counties might wake up to find they have no electricity and their car won’t start.
“To add to this, only half of British households have access to off-road parking, meaning some businesses may be put under pressure to provide their employees with charging facilities at work.”
A recent report conducted by LeasePlan, which surveyed 4,000 people in 16 countries, found 61% of respondents favour zero-emission electric driving, while half of UK respondents said their desire to own an EV has risen in the last three years.
But only about 1.1% of new cars sold so far this year have been electric in the UK, with the all-electric Tesla Model 3 the most popular.
That means the market is still fairly minuscule in the UK, with less populated nations such as Norway and the Netherlands selling much more electric cars.
Norway sold three-times as many electric cars and the Netherlands had sales that were 70% higher than Britain.
China – The EV capital
Alongside the Netherlands and Norway, France, Germany and the US are all seeing much higher sales of EVs in their countries.
But it is China that is Britain’s biggest competitor if it does wish to become the home of electric vehicles.
China, known as the EV capital, currently leads the market globally, with Beijing alone targeting 400,000 sales by next year.
Data found by researcher Chengxiang Zhuge, of the University of East Anglia’s Tyndall Centre for Climate Change Research, shows that 17,000 battery electric vehicles were sold in Beijing in 2018, taking the total EVs in the Chinese capital to 188,000.
The data also states that, last year, Beijing had 130,000 charging points.
Some 93,000 of these were privately installed for home use, while 20,000 were accessible to the public and 17,000 installed for the public transport system.
Range anxiety and accessible charging points in the UK
The UK has a lot of catching up to do with China, even though it now has more public charging points than petrol stations, with 22,500 places across the nation to charge an electric vehicle.
There are 8,300 petrol stations, according to the Petrol Retailers Association’s Market Review 2019, although it does not provide data for the number of petrol pumps – which are likely to exceed the number of EV charging points.
Also, there are still more than 100 local authorities with fewer than 10 public charging devices per 100,000 population.
These are crucial to solving the “range anxiety” issue that comes with EVs, in which drivers who are constantly worried about whether their vehicle will last a long journey.
Speaking during a roundtable discussion in the summer, Vicky Edmonds, joint head of the government’s Office for Low Emission Vehicles (OLEV), said: “Although 80% of charging is going to take place at home or the workplace, about 20% will be on those long journeys.
“We know people need to be able to get to a charging point easily and to be able to charge their vehicle quickly.
“Many of the costs around charging are for underground connections. There’s a big investment that we hope will crack the range anxiety.”
Who will pay for electric vehicle technology?
There is the expectation that the private sector will eventually pay for more charging points to be installed, but it has so far been slow to react, due to the low numbers of EV sales.
The government has recently announced a £400m ($515m) charging infrastructure investment fund, which aims to catalyse private investment in charging infrastructure.
It is also consulting on requiring charge points be built into all new homes with a parking space.
UK Transport secretary Grant Shapps said earlier this week: “It’s fantastic there is already a rapid charge point at almost every motorway service station, and now more charging stations than petrol stations.
“But I want to see thousands more charge points installed across the UK.
“This fund will help drum up further investment in charging infrastructure from the private sector, so charging an electric car becomes as easy as plugging in a smartphone.”
Impact of Brexit on the future of electric vehicles in the UK
Concerns over supply
Although the government may be making plans on how it can move forward and push up the production of EVs, Brexit could put a spanner in the works.
It presents some difficult questions for the motor industry and, with demand for electric vehicles on the rise, it is unclear what trade will look like when Britain leaves the EU.
As many vehicles on UK roads are imported from Europe, China and South Korea, the industry is dependent on these countries still being interested in shipping after Brexit.
David Bushell, principal consultant at Alphabet, a global business mobility provider and a subsidiary of the BMW Group, says the industry is highly encouraged by the investment manufacturers are making in electric vehicles, as new and improved ones are entering the market.
“One of the concerns we have is the number of vehicles that the UK will receive, I am trying to resist the B-word, but it may have an impact on the way we trade with Europe on access to these vehicles,” he adds.
Business car leasing company Lex Autolease’s associate director Chris Chandler echoes this sentiment, highlighting supply concerns as an issue for the industry.
He says: “Our biggest issue at the moment is that EVs are difficult to get a hold of, so we are in a position at the moment where we have a higher demand than supply.
“Getting our hands on the actual physical electric vehicles is difficult, we are getting them but not in the number we would like them.”
2021 carbon dioxide emissions target
As part of the EU’s mandatory emission reduction targets, the fleet-wide average emission target for new cars in member nations will be 95g carbon dioxide (CO2) per kilometre in 2021.
There could be potential issues for Britain should it end up outside of that calculation.
Eastlake, of the LowCVP, says: “If the UK is outside that calculation, it will make it less attractive for manufacturers to put their EV products here in the UK because they don’t count towards those figures.
“Either we need a very robust structure to force that same CO2 regulation in the UK or we have to stay within that EU calculation.
“The UK market has been traditionally quite attractive for car manufacturers with over 2.5 million people.
“But if we are outside, we will have to put in place some of the market drivers that are necessary to attract electric vehicles over here.”
EU trade deal with Japan
The EU and Japan agreed on a trade deal earlier this year that could have vast implications on Britain’s automotive dealings post-Brexit.
The agreement is both the largest bilateral trade deal made by the EU in terms of market size and is the largest zone of free trade created in history.
It means tariffs between the pair have dramatically reduced, which paved the way for simpler and faster trade, as well as opening up the opportunity for increased volume.
The main incentive for Japan in concluding the deal was to increase its auto industry exports, with tariffs lowered to zero over the next eight years.
Currently, around 30% of all the new Japanese car sales are EVs, and it has set a target to boost sales to between 50% and 70% by 2030.
Toyota, the country’s biggest car producer, announced last year its plan to stop production of only petrol and diesel-fuelled cars by 2025.
This means that in order to not be left further behind in the EV race after Brexit, the UK will have to make a trade deal on the automotive industry with the EU.
