Dr Andrew Jones and Professor Lyndon Simkin, Centre for Business in Society
Global electric car sales reached almost 14 million last year, which represented a 35% increase. This growth meant that the global electric fleet rose to 40 million in 2023[i]. While this may sound to be an impressive gear-change, destined to help safeguard the environment, the reality is far less certain. Particularly in the UK.
The future for the UK’s motorists is not clear. We were to be switching all new purchases to environmentally friendlier EVs by 2030, but this date was pushed back to 2035 by the previous Government. Manufacturers will pay a £15,000 per vehicle fine for each sale below these targets[ii]. However, progress is stalling, not enough charging points are being built, and many consumers still prefer diesel or petrol vehicles.
UK targets prohibit the sale of new hybrids post-2035, yet in other countries they are seen as the way to persuade many consumers to switch from their traditional vehicles, offering a less risky transition to the unfamiliar technology of EVs and charging. One of the major manufacturers in the UK, Toyota, is one of the successful pioneers of hybrid technology.
Because of heavy retail discounting, last month EV sales accounted for a quarter of new car sales in the UK, but that’s way short of Government and industry targets[iii]. Some might argue that the drive to EVs has taken a wrong turn. Recent job cuts in the UK by Ford and Vauxhall’s parent Stellantis have been blamed entirely on the sluggish sales of EVs, inadequate charging infrastructure and motorists’ resistance to switching to EVs.
“If Everyone Bought an EV Tomorrow I Don’t See How We Charge Them”
The former UK manufacturing lead for Stellantis, Mark Noble, has blamed Brexit and the zero emissions vehicle (ZEV) mandate for the global automotive giant’s decision to close down the Vauxhall van works in Luton, which has been operating since 1905[i]. He explained that for the ZEV mandate the Government “has to decide: is this a tax, a £6bn tax on the car companies, or is it their mandate to go green? They need to make it possible for car manufacturers to meet these targets”, adding that there were still barriers to mass adoption of EVs, including a lack of charging infrastructure. “If everybody bought an electric vehicle tomorrow, I don’t see how we charge them”, he said.
Cannot Win
Dammed if you do, damned if you don’t! If we do switch to EVs, there will be hold-ups at motorway recharging points, delays while charging, and congestion around available EV parking/infrastructure, without significant infrastructure improvements and investments. Plus, we’ll pay more for these EVs than petrol or diesel options. There are also implications for the UK’s electricity generation capacity and investment challenges. If we don’t switch to EVs, however, we risk irreparably damaging our planet and leaving our grandchildren with a terrible legacy.
A recent piece on BBC News[i] cited five challenges for EV growth:
- Subsidise the costs.
- Drive down the cost.
- Limit the confusion.
- Cut VAT on public charging.
- Sort out the public recharging network.
We don’t disagree with the BBC’s comments. The problem is that these challenges are far from easy to address.
In What Car’s top ten family cars for 2024[ii], the EVs are significantly pricier than their petrol or diesel rivals. So the upfront purchase price is a genuine barrier in a period when family budgets are under so much pressure. The running costs are not insignificant. However, it’s the access to charging that concerns so many consumers. Many live in city areas with no charging points and no way to connect to a domestic point in their flat or apartment. Others have access to chargers at home or at work, but not both. As our research has revealed, many motorists live in rural areas, fully dependent on their vehicles for daily life. The charging infrastructure is very patchy away from the large cities. For example, in the rural and county areas of England, data published by the County Council Network in 2023 indicated that there was on average a single EV charger every 10 miles compared to one every 3.7 miles in the largest cities[iii]. Such an imbalance in provision acts as a significant deterrent for consumers, and may not provide a strong enough signal for the commitment to change.
For many, the real fear is how to undertake longer journeys without either queuing and waiting at motorway service areas or scouring around an unfamiliar town for available charging points. This additional burden is too much for many would-be buyers of EVs, who currently find filling up at a forecourt simple and very familiar. The costs of ownership are also a huge barrier for many.
The Industry Is Openly Querying UK Government Policy
The industry is openly querying UK Government policy, the decisions of the last Government and how the new Labour Government will deliver on the stated 2035 commitments. Ford UK’s chair and managing director, Lisa Brankin, told the BBC that without demand a Government mandate to produce and sell more EVs “just doesn’t work”. “The one thing that we really need is Government-backed incentives to urgently boost the uptake of electric vehicles”. She said Ford has invested significantly in the production and development of EVs, with over £350m into electrification in the UK, “So we kind of need to make it work”[i]. However, the recent budget has made EV ownership more costly and the hoped for incentives failed to appear[ii].
Potentially a major part of the UK’s armoury in addressing climate change and meeting its UN obligations, the much-vaunted switch by all motorists has so far failed to materialise. This is true across Europe. After years of steep market expansion, electric vehicle sales are slowing down across the EU. Since 2022, many European countries have started to roll-back the financial incentives provided to consumers for purchasing EVs. However, growth rates are lower than in previous years, and less than a fifth of the market is made up of EVs. For major producers such as VW, these circumstances are amongst the mix of headwinds that are driving significant organisational changes, which include the first closures of a German manufacturing facility in the company’s history[iii]. Such unprecedented responses are likely to have far reaching ramifications, with other manufacturers also facing up to a highly uncertain world.
Consumers Need Help
Consumers are confused. They are reticent and unhappy about the costs of acquiring and operating an EV. Crucially, consumers need help… In the form of subsidies or tax relief, for reliable vehicles, and they require access to charging infrastructure and a guarantee of charging point availability and reliability. The automotive industry requires all of these, too, if it is to support the required investments. So what will change and who will drive these developments? It really isn’t clear. What is certain is that without a refresh and appropriate support, this UK policy is destined to failure and the options facing consumers will be even more confused.
Through understanding the impact of organisations’ activities, behaviours and policies, the Centre for Business in Society at Coventry University seeks to promote responsibility, to change behaviours, and to achieve better outcomes for economies, societies and the individual.
[i] The Global Electric Vehicle Market Overview in 2024, Virta Global; https://www.virta.global/global-electric-vehicle-market.
[ii] https://www.gov.uk/government/news/pathway-for-zero-emission-vehicle-transition-by-2035-becomes-law.
[iii] Tom Espinar and Mitchell Labiak, Electric cars make up one in four sold in November, BBC News, December 5th 2024; https://www.bbc.co.uk/news/articles/ckgz7j1yz1po.
[iv] Tom Espinar, UK electric car production drops with firms ‘under pressure’, BBC News, November 28th, 2024; https://www.bbc.co.uk/news/articles/ce9gk05d3jjo.
[v] BBC News – Five ways to persuade more people to buy electric cars; https://www.bbc.com/news/articles/cj3mkrrll2ro
[vi] https://www.whatcar.com/.
[viii] Theo Leggett and Mitchell Labiak, Ford calls for incentives to buy electric cars as backlash grows, BBC News, November 27th 2024; Ford calls for incentives to buy electric cars as backlash grows – BBC News.
[ix] By Hemma Visavadia, Electric cars to suffer worst tax bill in years after Rachel Reeves hikes – ‘Penalises family drivers’, GBN, December 3rd 2024; https://www.gbnews.com/lifestyle/cars/family-cars-worst-car-tax-bill-rachel-reeves-prices-penalises-autum-budget.
[x] Jennifer Rankin, Volkswagen workers in Germany to strike over plan to cut jobs and pay, The Guardian, December 2nd 2024; https://www.theguardian.com/business/2024/dec/02/volkswagen-workers-strike-germany-jobs-pay-cuts.
