The uptake of electric vehicles in the UK has suffered from a ‘chicken and egg’ scenario – until there are enough electric cars on the road, investment in charging infrastructure is considered risky, but equally, people are reluctant to invest in an electric car if there is a risk of not finding anywhere to charge it. Of course, there have been other challenges, including the high cost of new electric cars and, at the supply end, long waiting lists and shipping times for new electric vehicles.
The recent news that Volkswagen plans to invest in both the vehicles and the network, is encouraging. The car maker announced in November that it was planning to convert three of its plants to accommodate the production of up to 50 million electric cars, which will be sold across Europe at a lower price point than Teslas. Volkswagen currently sells two electric vehicles in the UK, the e-Golf and the e-Up, and has sold over 1,000 electric cars over the last four years, but now has plans to offer an electric version of all its models. In fact, all leading car manufacturers are currently planning some kind of move into electric vehicle production, but the question is; how many of the electric vehicles produced will be destined for the UK market?
Out of total UK car registrations of around 2.2m, the number of electric and hybrid vehicles registered so far this year in the UK is around 132k, which is low but represents growth of 22% compared to last year (YTD to November), according to data from the SMMT. Of these, however, only 14k were battery electric vehicles. Hybrid petrol-electric cars accounted for the largest share with 78k registrations, followed by plug-in hybrid electric cars with 40k, while diesel-electric vehicles have declined dramatically and saw no new registrations in November 2018.
In addition, Tesco recently announced it has partnered with Volkswagen – and a supplier of chargers called Podpoint – to create the “largest retail network of EV chargers”, consisting of almost 2,500 charging bays at up to 600 stores by 2020, although free charging for electric cars will be available at some Tesco stores as early as next year. Asda, Sainsbury’s and Morrisons also have some electric vehicle charging points at some of their stores, but nowhere near as many.
In June 2018, BP announced it was buying the UK’s largest electric charging network, Chargemaster, which has 6,500 charging points and also sells electric vehicle charging points for home use, while Shell has previously acquired car charging company NewMotion. BP has said it expects renewable energy to be the fastest-growing fuel source, and predicts that the number of electric vehicles in the UK will reach 12 million by 2040.
One important barrier to development of the charging infrastructure has of course been that it has been difficult to monetise this in the same way as with traditional fuels. Tesla has dealt with this by building this into the cost of the vehicle itself, but it may be that Tesco, BP and Shell have found a good solution. They all plan to use their extensive networks across the country to entice people to spend more time (and money) at the store or the forecourt, by offering free slow charging, while faster charging will be available at extra cost.
The number of people with home chargers is also growing quickly, though the numbers are not that big – yet. Chargemaster, who install chargers at homes and workplaces as well as develops a public charging network, says they have installed over 30,000 homechargers to date. So far, very few housebuilders appear to be installing chargers as standard, but there are a few examples, such as Springfield Properties, who announced in mid-2018 that they were installing them on a 3,000-home development in Scotland. There have also been calls to revise the Building Regulations to include a requirement for a dedicated circuit for EV charging points.
Key market drivers for uptake of electric vehicles right now are the strict new EU emissions rules that are due to come into force in 2021, and the falling cost of electric cars. There have been complaints that the rapid growth of hybrid cars, rather than pure electric cars, has led to hybrid cars clogging up all the electric charging points as drivers attempt to save money, but this should stimulate growth in the electric vehicle charging infrastructure, rather than hamper growth in electric-only car ownership.
While there are government incentives in the UK, such as the Low-Emission Plug-In Grant, more is needed. UK electric car ownership is behind many other countries – in Norway, which benefits from a wide range of generous government incentives and perks, nearly a third of all new cars sold this year is thought to have been a plug-in model. To offer a wide range of incentives and tax breaks may not sustainable in the long run, but it would help to kick-start electric vehicle sales for a short period of time to build some momentum.
Electric car ownership has the potential to display an exponential increase during 2019 as a result of the positive signs displayed in the market, with production capacity increasing, larger-scale public charging networks being installed and housebuilders starting to take notice. It is inevitable that the government will need to step in and offer support at some point, and why not this year? The Scottish Government has already announced its intention to phase out the need for any new petrol or diesel cars and vans by 2032 – and if Scotland can do it with the vast distances, it should be something for England to aim towards too.
MRA Research specialises in market research and insight within the UK construction industry, and can undertake focus groups and surveys targeting specifiers, engineers, contractors, merchants, installers and housebuilders.