Targeted policies not new targets will accelerate the EV transition

By Sam Richards

By Sam Richards

As the UK hosts a Zero emission vehicles summit, CEN Director Sam Richards takes a look at suggestions to boost EV uptake

This week, the UK hosted its Zero emission summit in Birmingham. We all know the stats: the UK produces 1 in 5 EVs sold in Europe, it has the largest battery plant in Europe - both a result of Nissan’s presence in Sunderland, and has the second-highest number of electric and hybrids on the road in Europe, only just pipped to the post by Norway. Given our rich history of automotive manufacturing we are in pole position (sorry) to lead the world in the electrification of transport.

There is a twin imperative to speed up this transition. First, transport is now the highest emitting sector in the UK economy. To even hit our existing climate change targets - let alone those required by reaching net zero - GHG emissions from transport need to start coming down, fast. Secondly, poor air quality blights too many British cities. A recent study by KCL showed that in 2010 there was the equivalent of up to 5,900 premature deaths across London associated with long term NO2 exposure.

Some green groups like Green Alliance and WWF argue that the best way to accelerate the process is to bring forward the target date for the phase out of diesel and petrol cars from 2040 to 2030. Their argument is that this sends a clear signal to investors that the UK is serious about the electrification of transport, and will encourage automotive manufacturers to get a move on and start selling us EVs. An interesting blog from the excellent Matt Finch found that automotive manufacturers could be doing more, to say the least, to advertise new electric models.

Privately, major manufacturers say that clear milestones offer helpful signals. Yet while bringing forward the phase-out date would be good headline material, it’s hard to see it making a big difference in either boosting UK manufacturing or increasing demand for EVs.

First off: the equation for manufacturers when deciding where to build their next model is simple - what’s the total cost of production? They add up labour costs, supply costs, transportation costs, energy costs and so on - then they build the new model where its cheapest. If it’s cheaper to build the new LEAF in Barcelona than Sunderland, that’s where it will be built. There’s an argument that if bringing forward the target boosts domestic demand, that could reduce transportation costs, but this seems too marginal to tip the balance.

The best way to boost EV manufacturing in the UK? Bring down costs for businesses. The UK has some of the highest industrial energy costs in Europe - so let’s make it easier for businesses to procure new cheap renewable power, possibly via Government backed PPAs. In order for EV manufacturing to take place here we’ll need high tech suppliers we currently lack - government support for a supply chain cluster now would be much more useful for manufacturers than a new future target date.

It’s also unclear that a 2030 target boosts domestic demand - beyond perhaps encouraging manufacturers to give us the hard sell on EVs sooner. We know that over the next 5 years there will be countless new electric models, all with longer ranges and more functions than previous EVs. Manufacturers are desperate to be seen as owning the zero emissions future. What I’m saying is don’t worry: car manufacturers still want to sell cars. The hard sell is coming.

What we need now are tangible, targeted policies to boost demand. Tackling range anxiety with the rollout of more charge points. Extending the Plug-in Car Grant to keep the sticker price of EVs competitive in the short term before they can compete on up front costs with ICEs - which could come as soon as the mid 2020s.

The market is already delivering cheaper EVs with longer ranges - and with cost reductions coming in 5 years’ time there will be no reason not to buy an EV.  The Government is supporting them in this, with neat ideas like the new green number plates, and more substantial policies, like cash for battery R&D. The current course is the right one. We don’t need a new long term phase out date - sensible, targeted policies that boost demand and back business will be much more effective for speeding up the EV transition.