Legislation and Infrastructure

With everything else which has taken place in the past 12 months, it would be easy to lose sight of the potential impact which electrification and alternative powertrains are likely to have on the automotive sector. Although many of the urban low emission and clean air zone proposals have been pushed back, the UK Government with its latest announcement has brought forward the transition to zero-emission vehicles to 2030. Low emission vehicles have also taken record market share in the past few months, albeit in abnormal conditions.  The Government has likely seen the present situation as its best opportunity to nudge mindsets towards electric vehicles.
 
While no one is questioning the environmental ambition or commitment to improved air quality, there are plenty of opportunities which still need to be addressed when it comes to the practicalities of zero emission implementation. Those operating fleet or business vehicles are, after all, only two or three change cycles away from that date. Organisations need confidence in availability of the right vehicles, which are fit for purpose, come with appropriate incentives, and are supported by effective infrastructure.

The ongoing roll-out of electric vehicles is likely to play a key role in the changing automotive market. With EV acceleration comes changes for all parts of the automotive supply, distribution, and retail chain. There is no doubt that EV (and the wider alternative fuels market) will be a core disruptor. While adapting and responding to COVID-19 has clearly and rightly been the priority for automotive organisations this year, it is important not to lose sight of the opportunities mainstream electric adoption can provide.   

One of the biggest challenges when it comes to EV infrastructure is the mismatch between consumer perceptions, industry projections and the reality of getting charging points in the ground. For example, countless research into consumer and business attitudes to electric vehicles has been done by government and industry, with the vast majority of surveys continuing to highlight concern around where and how to charge, the availability of charging points, the time taken to recharge and range anxiety.

However, while this underscores a need for continued education around EV charging, the reality is between 2017 and 2019, the number of connectors almost doubled (Zap-Map, 2020). Data from Zap-Map in September 2020 highlighted more than 12,000 charging locations with 19,500 devices and 34,000 connectors (Zap-Map, 2020). There is arguably enough infrastructure for the current demand, but the question is how much is reliable, maintained, suitable for the latest EVs, and located in the right place.

To address the problem, Government and private sector investment is rife. Indeed, with a goal to reach £400m (£200m public money match funded by private investment), the UK Treasury’s Charging Infrastructure Investment Fund (CIIF) now has a total of more than £150m deployable capital to accelerate the rollout of public EV charging infrastructure. It has already invested in InstaVolt rapid EV charging stations (Whitlock, 2020), with further announcements on the horizon. This follows on from various other funds within the £1.5bn Road to Zero Strategy, such as the On-Street Residential Chargepoint Scheme (ORCS) and more.

Of course, it is difficult to know how and where to invest when the potential scale of the opportunity has received wildly different estimates. Recent analysis from SMMT and Frost and Sullivan suggests 1.7m public charge points will be needed by the end of the decade and 2.8m by 2035 (SMMT, 2020), a figure which has been challenged by others in the market. In any case, it is clear infrastructure investment will need to run ahead of EV sales to support positive response to mainstream EV adoption.

IHS Markit expects COVID-19 to have a medium-term impact on demand for new charging infrastructure installations until 2023, with the industry remaining in recovery mode until 2025. This comes on the back of data which suggested some charging service providers saw falls of around 80% in the utilisation of operational chargers during the early stages of the pandemic (IHS Markit, 2020).

MMeanwhile, in the UK, the ‘Charge Challenge’ took place over the summer, asking individuals to use the open data from UK Power Networks and any other open source channels to predict when and where the next generation of electric vehicle charge points should be located. UKPN has projected a 10-fold increase in EV uptake over the next 10 years, expecting 3.6m EVs on the roads of London, the South and South East by 2030 (UKPN, 2020).