With the UK Government’s decision to push back the demise of the internal combustion engine from 2030 to 2035, this throws up clear warning signs for the EV rollout. Prior to this unexpected announcement, the transition to EVs was being driven forward at speed by the imminent 2030 deadline and supported by government subsidies and tax breaks for purchasers of new electric vehicles. By the end of 2023, there were 975,000 fully electric vehicles on the UK’s roads and a further 590,000 plug-in hybrids. With lower running costs, exemption from congestion and proposed CAZ and ULEZ charges, the case for “green” EV motoring seemed unstoppable.
The record EV sales in 2023 were largely in the business and fleet sector of the new car market, driven by low Benefit-in-Kind tax rates and salary sacrifice schemes. Although these incentives remain in play, the decision to defer the petrol and diesel ban has introduced some ambiguity and hesitancy. For the private buyer, there are currently little or no incentives to make the switch to electric motoring, and there remains some consumer doubt around long battery charge times, a lack of public charging infrastructure and range anxiety.
Although the EV is clearly here to stay, ramping up the early success of the EV transition still requires the attention of both public and private sector participants to deliver the full financial and net zero potential. The Zero Emissions Mandate will ensure supply-side EV capacity. Commencing 2024, this forces a 22% target on manufacturers for new car sales, rising to 100% by 2035.
On the demand side, as with traditional car ownership, EV accessibility needs to be universally fair and inclusive, not something perceived as a niche option for the urban elite. Access to affordable vehicles and charging facilities are key to this, especially for people living in rural communities or those without off-street parking.
Currently, grid connection delays are proving a barrier to charging infrastructure investment and rollout, with new fast-charging facilities vying with renewable energy for timely connectivity. The reforms to the grid connections process announced in the Autumn statement are a welcome boost in this respect, as is the £280m to support charging infrastructure announced at COP28.
With more EVs expected on the road, domestic charging has the potential to overload the last mile of the network, especially during peak times. This can lead to power outages, increased costs for the grid, and pressure on renewable energy integration.
Fully integrated EV solutions linking smart charging to smart metering, smart homes, and a smart grid offer considerable advantages to flexible markets. Provided that the digitalisation challenge can be met, both standard single-direction charging (G2V) and, in particular, bi-directional charging (V2G) can be used to support DSR, act as battery storage assets, improve frequency response, aid system balancing and at the same time help monitories the transition to electric vehicles.
Building on the early momentum of the EV transition and turning this into a full-scale EV revolution does have its challenges. In the short term, EV uptake may stall a little until incentives and infrastructure come together to smooth the road ahead. What is clear is in the very near future, the electricity industry needs to be ready to power up the ever-increasing electrification of our motoring future.
Engage Consulting is a subject matter expert consultancy that provides advisory and project management services throughout the energy sector. We specialise in the regulatory, commercial and technological aspects of the evolving energy and retail market landscapes, enabling our clients throughout the UK and Ireland to:
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