WHAT COMES NEXT FOR THE ROAD TO ZERO?
Re-engineering the ecosystem to deliver excellence
What should you get from this section?
Within this section, you should gain a picture of how the downstream automotive industry is changing to plan next steps
"With just ten years to complete a paradigm shift in UK automotive, organisations need to act now to stand a chance of emerging successful."
Louise Wallis - Head of Business Management, NFDA (National Franchised Dealer Association)
Understanding the Road to Zero.
It is now two years since the launch of the UK Government’s flagship Road to Zero Strategy. The proposal set out plans for an expansion of green infrastructure across the country; a reduction in emissions; and promoting the uptake of zero emission cars, vans, and trucks. The strategy outlined a plan for 50% of all new car sales to be ultra-low emission by 2030, alongside up to 40% of new vans. More recently, the UK Government has consulted on bringing forward plans to ban the sale of all conventional petrol and diesel engines by 2030; an advance on the 2040 date set in the Air Quality Plan of 2017.
Decarbonisation trends and opportunities
As identified in later sections, COVID-19 has clearly had an impact on immediate environmental concerns; however, the medium and long-term opportunity for the decarbonisation of transport is more important than ever. In a sign of the importance of electrification in consumer and business minds, the first World EV Day took place in September 2020, with more than 50 organisations partnering with the inaugural digital initiative and in excess of 1,600 people signing the EV pledge worldwide.
Alongside the social media activity, government and business took the opportunity to share tangible actions. The UK Government announced £12m in funding for EV research and £9.3m via Highways England to support local authorities encouraging businesses to go electric (Gov.UK, 2020). This is in addition to several existing infrastructure investment schemes and vehicle subsidy programmes, such as the Workplace Charging Scheme (WCS); Electric Vehicle Home Charging Scheme (EVHS); and Plug-in Vehicle Grant.
By July 2020, the Plug-in Car Grant had helped more than 200,000 purchases (Auto Express, 2020). However, the reduction of the grant from £4,500 to £3,000 for pure EV and the removal of plug-in hybrids from the scheme earlier this year is likely to slow adoption. While support for EV adoption remains strong, and several key tax benefits and allowances are in place for both the vehicles and charging infrastructure, the financial incentives and subsidy landscape continue to evolve.
With electric and alternatively fuelled vehicles increasing in market share, the automotive industry will need to respond. Clear opportunities exist for dealers, fleets, leasing companies, finance houses, insurers and industry suppliers who are ready to embrace the change. As electric vehicles go mainstream, there are many uncertainties to deal with in terms of residual values, battery lifecycle and replacement costs as well as charging infrastructure.
"In the medium to long-term, with continued disruption from connected and electric vehicles, the whole supply, distribution and retail chain will need to evolve."
Owen Edwards, Associate Director, Grant Thornton
Read our overview