UK government must raise the bar for electric vehicle adoption

15 August 2017 Consultancy.uk

British roads could stand on the verge of a revolution in personal transport, according to a new study. With the UK government becoming the latest to name 2040 as the cut-off point for petrol and diesel fuelled transport, manufacturers are finally beginning to prioritise the next generation of electronic vehicles (EVs), presenting new challenges for companies, governments, and drivers themselves.

With the EU collectively in danger of failing to meet various climate targets at present, a number of the community’s largest member states have announced measures aimed at weaning citizens off the direct consumption of petrol and diesel. Following a ban on petrol and diesel fuelled cars in France recently being scheduled for 2040, the United Kingdom has followed suit.

The governmental pushes away from petrol and diesel mean that large car producers like Volvo have an ultimatum to work toward – create electronic vehicles worth consumers’ whiles, or face becoming by-standers in the future automotive market. Change in public perception had previously pushed large manufacturers, most notably Toyota with their infamous Prius hybrid line, putting their money and brand influence behind partially electronic vehicles, however, with greater public awareness around the environmental impact of petrol and diesel, a growing variety of electric vehicles have come to the fore, enabling governments to put their trust in the industry to continue to profit in spite of their intervention.

However, while the market is moving steadily toward electrified transport, the uptake of electric vehicles could be double government estimates as early as 2020, according to new research by Baringa Partners. Researchers at the consulting firm, who called on policy makers to address issues around the integration of potentially soaring levels of EVs into the energy system, found that 18% of people said they would consider buying an electric vehicle for their next car, well above the governmental projection of a mere 9% of the UK’s road fleet by 2020.

UK government must raise  the bar for electric vehicle adoption

According to the most recent figures published via the Office of Low Emission Vehicles, there are over 100,000 hybrid and pure electric vehicles on UK roads at time of writing. Forecasts vary on how quickly this figure may climb, however distribution network operator Western Power Distribution recently predicted it will hit 1 million by 2020. Thanks to the renewed interest in the technology, high profile firms like Tesla will be rolling out its cheapest model into the UK next year. Meanwhile, Volvo are pledging to produce electric vehicles (EVs) and hybrids only by 2019, and Baringa believes the tide could be turning for electric vehicles in that case. According to a recent statement by the Renewable Energy Association’s Matthew Trevaskis, head of electric vehicles at the organisation, the product cycle for new vehicle from research to launch is generally seven years, which means that soon the automotive industry will collectively be planning for petrol-free vehicles. Experts predict at that point, the pace of change will quicken even further.

However, according to Baringa, this opportunity to grow a new market, as well as to invest in cleaner methods of transport, also presents a unique set of challenges which governments and manufacturers will need to tackle ahead of time. For one example, the huge level of uptake is expected to have a considerable impact on local grids, with some suggesting a purely electric vehicle travelling 10,000 miles a year could double the energy consumption of the home it charges from. With electricity providers British Gas recently having hiked prices by 12.5%, in a move consumer experts warned could kick off a new round of enlarged bills from key competitors, this is probably not something consumers may even be able to afford. Meanwhile, beyond the home, the Highways Agency has had to commit to a £15 million infrastructure programme designed to ensure that drivers are never more than 20 miles from a charging point on the UK’s A roads. Similarly, measures announced in the recent Queen’s Speech will see motorway services compelled to install a number of chargers for electric vehicles to supplement those already in place from Ecotricity with its Electric Highway, and other charging network providers.

The survey also found a number of barriers continue to stand in the way of mass market adoption, particularly around a lack of education within the consumer market. It found that almost a third of people believe EVs will never overtake conventional cars due largely to their perceived cost. The cost of electric vehicles has put drivers off moving away from petrol and diesel from the inception of the EV – however, the new generation of vehicles are set to become much more affordable, and Baringa predict that electric vehicles will become cheaper than diesel cars by 2022 and on a par with petrol ones by 2023, at which point their popularity is likely to increase exponentially. Around half the cost of an EV is currently down to the battery, however a McKinsey & Company report earlier in 2017 found that this integral part of EV machinery has seen prices fall by up to 80% over the course of this decade. Further to the cost, battery-life is also improving. While Baringa also found that over half (55%) of people were still concerned about not being able to travel far enough to reach the next charging point due to poor range – EV mileage is improving with new models every year.

Oliver Rix, Partner at Baringa Partners, said, “To really boost the number of electric vehicles on UK roads, the government will need to produce a convincing long-term road map to demonstrate how it intends to ensure that an acceleration in uptake can lead on to mass deployment.” He went on to state, “Bolder and clearer policies are needed to address issues such as the impact on grids, integration with the energy system on a large scale, and interplay with autonomous vehicles, which could fundamentally change car use. These policies will, in turn, impact on the uptake of electric vehicles and electricity network infrastructure.”

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