Select committee inquiry
Low emission cars
Closed
What the inquiry looked at
“Transport is the UK’s largest source of carbon emissions and of that, most comes from cars. Government wants people to switch to cars that do not emit carbon dioxide to eliminate emissions by 2050. By 2030, government wants between 50% and 70% of new cars to be ultra-low emission (plug in hybrids), and by 2050, almost every car to be zero emission (100% electric or hydrogen powered). In November 2020, government announced the UK will end the sale of new petrol, diesel and hybrid cars by 2035. Government has provided subsidies to encourage the uptake of ultra-low and zero emission cars. By March 2020 government had spent over £800m through the plug-in car grant which subsidises the purchase cost of new electric cars. In March 2020, government confirmed a further £403 million of funding to continue the plug-in car grant until 2022-23 and £500 million to support the rollout of fast-charging infrastructure across the country. The Committee will question senior officials at Department for Transport and BEIS on the value-for-money of government’s spending on low emissions cars to date, and whether the government is well-placed to achieve its long-term ambitions for zero-emission cars. If you have evidence on these questions, please submit it here by 6:00 pm on Thursday 4 March 2021.”
The committee's words, from the inquiry page on parliament.uk ↗.
What it found
In the committee's words, from the summary of First Report - Low emission cars ↗
Government has set ambitious targets to phase out new petrol and diesel cars by 2030 and for all new cars to be zero-emission at the tailpipe, the rear section of the exhaust pipe, from 2035. Progress has been made by increasing the number of ultra-low emission cars on the road, with the Department for Transport estimating that just under 11% of new car registrations were ultra-low emission in 2020. However, getting from this level to 100% as new petrol and diesel cars are phased out is a huge challenge, and there will still be existing petrol and diesel cars on the road for many years after 2030. There are several barriers that need to be addressed including the ease of charging electric cars.
The number of charging points is increasing rapidly, but many more will be required within a very short period of time to support the envisaged growth in electric cars in the UK.
The Departments for Transport and for Business, Energy & Industrial Strategy will need to do much more to consider the practical application of this large societal change and must put consumers at the heart of their considerations. Achieving this ambition will require convincing consumers of the affordability and practicality of zero-emission cars, with up-front prices still too high for many in comparison to petrol or diesel equivalents, and addressing the current very uneven take-up across the UK. We are not convinced that the Departments are doing enough to ensure all communities have access to the appropriate charging infrastructure, for example in rural areas or urban areas without access to off-road charging.
The Departments will need to be on top of the other consequences arising from this transition, including the impact on the skills and capabilities required to support the changeover in the UK vehicle fleet; the environmental and social implications of the switch-over both in the UK and across global supply chains; the impact on our future power needs; and the impact on the government tax-take due to the loss of fuel duties.
To date the Departments have lacked a clear published plan setting out how they propose to manage these consequential impacts, who they will need to work with, and the timetables for any action. The onus is on the Departments to show they are on top of all the repercussions and focussed on supporting consumers to shift to electric as they work towards the government’s ambitious goal.
What the government said
The government responded on 2 September 2021. The deadline was 19 July 2021.
Summary written by Accountability Index from the government's response.
The government states that it agrees with the Committee's recommendation on each of the five areas covered, and gives target implementation dates ranging from autumn 2021 to spring 2023.
- On monitoring the transition, the DfT published its 2035 Delivery Plan on 14 July 2021 and will report publicly on progress on an annual basis, with a review of progress towards the phase out dates by 2025.
- On charging infrastructure, the DfT intends to publish an EV infrastructure strategy in autumn 2021, with planning and delivery of chargers for drivers without off-street parking described as "a key focus".
- On supply and recycling chains, the government states that it agrees, but also that it "has no plans to unilaterally set standards" given the global nature of the industry.
- On wider impacts, the government agrees, but states that the 2035 Delivery Plan "will not cover taxation"; on tax it says the system needs to encourage EV uptake and revenue "needs to keep pace".
Read the government's response ↗ Read the report ↗ Report an error
How the inquiry ran
Each dot is a dated item listed on this page, from the inquiry's opening on 1 February 2021 to 2 September 2021. The dashed mark is the deadline Parliament records for the government's response.
- Oral evidence 11 Mar 2021
- Report 19 May 2021
- Government response 2 Sep 2021
- Correspondence 16 Apr 2021
What it recommended 9 recommendations · 15 conclusions
2There are a wide range of consumer-facing issues that still need to be addressed to...
Recommended (the committee's words)
There are a wide range of consumer-facing issues that still need to be addressed to increase the uptake of zero-emission cars. Consumers are not all yet convinced that zero-emission cars are a suitable alternative to petrol and diesel models, with concerns over the affordability of these vehicles, the distance they can travel on a single charge and the availability and accessibility of charge-points when and where required. The Department for Transport claims that the price gap between ultra- low emission and petrol and diesel cars is rapidly closing and highlights that the running cost of an electric car is lower than that of a petrol or diesel equivalent. However, we are not persuaded that the upfront costs are low enough for many, particularly if, as the Department states, only 13 electric car models cost less than £30,000. There are also other price differentials that need to be addressed, such as the big difference in the cost of charging on the public network compared to charging on a driveway at home and the costs of replacing electric car batteries. The Departments have deliberately sought to make interventions on a UK-wide basis, but take-up has been greatest where there are high levels of traffic, charge-points and affluence. There is a risk that some regions get left behind during this transition, including those in rural areas. 6 Low emission cars Recommendation: The Departments for Transport and for Business, Energy & Industrial Strategy need to have a sufficient understanding of how changes to the vehicle market are impacting, and going to impact, different types of consumers in different parts of the country. Their plan for expanding the number of zero- emission cars on our roads needs to clearly set out how they propose to tackle emerging consumer issues.
3We are not convinced that government has sufficiently thought through how the charging infrastructure will...
Recommended (the committee's words)
We are not convinced that government has sufficiently thought through how the charging infrastructure will expand at the pace required to meet the ambitious timetable to phase out petrol and diesel vehicles. The Department for Transport makes a series of assumptions about the types of journeys people make and how they charge their electric car: 99% of all journeys are under 100 miles, the vast majority of electric car charging takes place at home during the night, and people will use public charging infrastructure for the long journeys they take. It has not however made an estimate for how many charge-points the country will need to keep up with the increase in electric cars. The Department regards government’s role for developing the charging infrastructure as stimulating rapid private investment and unblocking market failures. Whilst it has committed to targeting six rapid charge- points at every motorway service station by 2023, and up to 10 to 12 at larger sites, it has not focused much attention on charging for people that do not have off-street parking. Recommendation: The Department for Transport should set out as part of its plan for increasing the use of electric cars, how it intends to address the remaining barriers to expanding the charging network, for example, the availability of chargers where drivers do not have off-street parking.
4The Departments have not yet demonstrated how they are going to encourage industry to maintain...
Recommended (the committee's words)
The Departments have not yet demonstrated how they are going to encourage industry to maintain proper environmental and social standards throughout their supply and recycling chains as the zero-emission car market grows. There are a range of environmental impacts and costs affecting the growth of zero- emission cars, including the materials used to make a car and the stability of the associated supply chains, the carbon impact from where a car is manufactured, the emissions and the eventual recycling challenge. The Department for Transport says it has analysed the results of studies examining the lifecycle emissions of electric cars and found that they are about 30% to 40% lower than cars using an internal combustion engine. The Department tells us that manufacturers are focusing on the environmental and social consequences of making electric cars. The Department reports that manufacturers are looking for ways to develop batteries without rare materials and that it is in their business interests not to source products from areas with unreliable or unethical supply chains. As the number of electric cars being produced increases, pressures on the supply of rare materials may increase, and we are concerned that environmental standards could slip. Recommendation: The Departments for Transport and for Business, Energy & Industrial Strategy should set out their approach to encouraging car manufacturers to maintain proper environmental and social standards throughout their supply and recycling chains as zero-emission cars volumes grow. This includes as examples: Low emission cars 7 • publishing information on lifecycle emissions; • details of relevant reporting standards for manufacturers on environmental and social stewardship; and, • future plans to develop the reporting standards.
5There are other issues to be addressed in the transition to zero-emission cars, such as...
Recommended (the committee's words)
There are other issues to be addressed in the transition to zero-emission cars, such as the need to train and retrain the workforce required to service the new car fleet, the impact on the demand for power, and the tax implications from phasing out new petrol and diesel cars. There are numerous uncertainties that the responsible Departments must overcome as petrol and diesel cars are phased out. The skilled workforce for maintaining zero-emission cars will need to grow as many people move away from petrol and diesel engines. The Department for Business, Energy & Industrial Strategy estimates that electricity demand will double by 2050 as a result of many different elements, of which one contributor is electric vehicles. Investments will also be needed in the transmission and distribution networks to ensure they are upgraded to cope with demand from electric vehicles and other demand sources. The Department estimates this will translate to a 2% increase in energy bills by 2030. There are significant issues that government will need to consider as part of the transition, for example the lost taxes from petrol and diesel sales, the impact on insurance regulations about charging vehicles indoors, and how other types of vehicles will be decarbonised. Recommendation: The Departments for Transport and for Business, Energy & Industrial Strategy need to work with other departments to consider the practical implications of the transition to zero-emission cars. They should set out in their plan how they are going to manage the wider societal impacts of phasing out new diesel and petrol cars, for example, retraining the UK workforce, the impact on power generation and transmission, and implications for the UK tax take. 8 Low emission cars 1 Plans for zero-emission cars and progress
1On the basis of a Report by the Comptroller and Auditor General, we took evidence...
Concluded (the committee's words)
On the basis of a Report by the Comptroller and Auditor General, we took evidence from the Department for Transport and from the Department for Business, Energy & Industrial Strategy on low-emission cars.1
6As part of the Ten Point Plan for a Green Industrial Revolution, Government has committed...
Recommended (the committee's words)
As part of the Ten Point Plan for a Green Industrial Revolution, Government has committed to publishing a delivery plan in 2021 for achieving the phase out of new petrol and diesel cars from 2030, but this has not yet been published.9 In our previous report on achieving net zero, we stressed the importance of publishing key strategies with clear timelines, milestones and decision points.10 Progress in addressing consumer barriers
7We were interested in hearing the Departments view on what barriers needed to be overcome...
Recommended (the committee's words)
We were interested in hearing the Departments view on what barriers needed to be overcome to achieve the targets for zero-emission cars. The Department for Transport told us it had undertaken a lot of research into this area, and the two most substantial factors had been price and range anxiety—the range cars can travel without recharging. Other barriers also exist, such as the appeal and acceptance of electric cars for consumers.11 The Department said it has used the Go Ultra Low publicity campaign to understand and assess what factors are influencing people’s choices towards ultra-low emission cars.12
8The Department told us it has used the plug-in car grant, which reduces the purchase...
Recommended (the committee's words)
The Department told us it has used the plug-in car grant, which reduces the purchase cost of qualifying new cars, to address the price barrier.13 The grant has been incrementally scaled back since 2018, and at the time of our evidence session contributed up to £3,000 off the purchase price of an eligible car worth under £50,000. One week after our session this was reduced, so it now contributes up to £2,500 towards eligible cars priced under £35,000.14 We put our concerns that the cost of ultra-low emission cars are still too high for many to the Department. The Department acknowledged that there is still a price difference between electric and petrol and diesel cars, but informed us that 13 electric vehicles now cost below £30,000 with a couple costing closer to £20,000. The Department argued that the price gap is closing “rapidly” and it is now starting to see critical mass which should enable costs to fall.15
9Upfront costs are not the only element making electric cars costly.16 We were concerned about...
Concluded (the committee's words)
Upfront costs are not the only element making electric cars costly.16 We were concerned about the cost of replacing batteries, especially for second-hand cars, and asked the Departments to explain how this is going to be managed. The largest part of the cost of an electric vehicle is the battery, but the Department for Transport believes that costs are falling as the technology develops and manufacturing scale increases. It believes that early concerns of battery degradation have not materialised. The Department for Business, Energy & Industrial Strategy pointed out that the cost of running an electric car 8 Q 17 9 C&AG’s Report, para 3.8; HM Government, The Ten Point Plan for a Green Industrial Revolution, November 2020 10 Committee of Public Accounts, Achieving Net Zero, Forty-Sixth Report of Session 2019–21, HC 935, 5 March 2021 11 Qq 10–11; C&AG’s Report, para 2.17 12 Q 26 13 Qq 11, 17; C&AG Report, para 1.11 14 C&AG’s Report, para 2.11; GOV.UK Plug-in car, van and truck grant to be targeted at more affordable models to allow more people to make the switch, 18 March 2021 15 Q 10; C&AG’s Report, para 2.5 16 Q 10 10 Low emission cars would be “significantly cheaper” than a petrol vehicle, with the Department for Transport estimating it costs, on average, around 1p per mile to run a zero-emission vehicle in comparison to 10p per mile for a petrol or diesel car.17
10We asked what the Departments were planning to do about the higher cost of charging...
Concluded (the committee's words)
We asked what the Departments were planning to do about the higher cost of charging on the public network compared to home charging.18 A National Audit Office analysis of public data suggests that charging at home can cost between 59% and 78% less than charging on the public network.19 The Department for Transport told us it expects there to be more competition in the market and innovation which may benefit consumers in terms of the price paid for electricity. It also suggested that electric cars might, for example, act as energy stores when plugged in at home to feed back to the grid at peak time and recharge at times were there is lower demand and cost. It thinks rapid charging in public, however, will always be more expensive than charging overnight at home.20
11The Department for Transport acknowledged range anxiety as a barrier to take-up and is providing...
Recommended (the committee's words)
The Department for Transport acknowledged range anxiety as a barrier to take-up and is providing investment for infrastructure, specifically focusing on public and rapid charging. However, it told us that because 99% of all journeys are under 100 miles, electric cars are suitable for many journeys. It accepted that there had been scepticism about the technology for a number of years, including around range, but cited improvements to charging times and suggested that charging on longer journeys will cease to be an issue.21 The government has announced £1.3 billion in the Spending Review to help improve the availability of chargers.22
12There is regional variation in the uptake of ultra-low emission cars in the UK, for...
Concluded (the committee's words)
There is regional variation in the uptake of ultra-low emission cars in the UK, for example high levels of take-up in southern England, and we have been concerned about whether some locations, including rural areas, are missing out on the transition.23 The Department for Transport told us it has not targeted specific locations, instead taking a location-neutral approach to investment, and early take-up has been greatest in places with a higher density of traffic, where there are more charge-points and also affluence. Whilst there have been some targeted investments, such as through pilot schemes in places like Bristol and Milton Keynes, the Department told us it wants to make interventions on a UK-wide basis.24 It acknowledged though the need to work with local authorities to understand obstacles in specific areas and provide support so they can provide charging infrastructure.25 Charging infrastructure
13The scale and reach of the charging infrastructure has grown over the past decade.26 The...
Concluded (the committee's words)
The scale and reach of the charging infrastructure has grown over the past decade.26 The Department for Transport informed us that there are now 20,800 public charge-points in the UK, with 783 new charge-points created in the 30 days before our evidence session in March 2021, 124 of which were rapid.27 The Department told us that its interventions 17 Q 29 18 Q 46 19 C&AG’s Report, para 2.26 20 Qq 46, 53 21 Q 11 22 Q 12 23 Q14; C&AG’s Report, para 2.4, Figure 8 24 Qq 14, 41 25 Q 15 26 Q 31; C&AG’s Report, para 12 27 Qq 12, 31 Low emission cars 11 have been pitched to stimulate more rapid private investment, and achieve a good return and value for public investment. It saw Government’s role in developing the charging infrastructure as spotting market failures and unblocking problems.28
14We challenged the Department for Transport on how it would ensure the charging infrastructure expanded...
Concluded (the committee's words)
We challenged the Department for Transport on how it would ensure the charging infrastructure expanded in step with its plans for a very rapid expansion in the number of electric cars ahead of 2030. The Department told us it has not set targets for the number and type of charging infrastructure required to support the zero-emission vehicle transition because it expects private investment to drive this.29 The Department did not think it was for them to set the number of charge-points needed and highlighted the number of variables involved as evidence of the complexity of determining what might be needed.30
15We asked the Departments about their strategy to avoid “notspots” - areas where the market...
Concluded (the committee's words)
We asked the Departments about their strategy to avoid “notspots” - areas where the market does not deliver because uptake is insufficient, especially for rural areas. The Department for Transport told us that the majority of electric car owners will charge at home overnight and start journeys with 100% charge.31 Data from the English Housing Survey indicates that 33% of households in England do not have access to off-street parking, and this increases to 68% for people living in social housing.32 The Department expects charging to be also available at key destinations, such as car parks or supermarkets, in conjunction with the private sector.33
16For longer journeys, drivers can access public infrastructure on the strategic road network.
Concluded (the committee's words)
For longer journeys, drivers can access public infrastructure on the strategic road network. The government has funded infrastructure so that on the strategic road network, drivers are never further than 20 miles from a rapid charge-point and will spend £950 million through Project Rapid for rapid charge-points at motorway service areas in England.34 The Department for Transport told us it is aiming for at least six rapid charge- points at motorway service areas in England by 2023, with up to 12 on larger sites. By 2035, it expects there to be 6,000.35
17The Department for Transport informed us there will now be a “shift” in focus from...
Concluded (the committee's words)
The Department for Transport informed us there will now be a “shift” in focus from funding for home charging to on-street and other publicly available local charging. The government has doubled investment for the current year for the on-street residential charge scheme and will be doubling it to £20 million for next year too. It has committed £90 million to support larger local charging.36 The National Audit Office has however reported that the take-up of funding for local authorities to support on-street residential charge points has previously been poor with almost a third of the allocated funding of £8.5 million not used.37 The Department acknowledged that these programmes tended to be underspent and pointed to capacity and appetite at local authority level, and commercial interests focusing on rapid and destination charging as reasons for the slow take-up.38 We have heard from representative bodies that some local authorities have a lack of in-house 28 Q 13 29 Q 31 30 Q 32 31 Q 35 32 C&AG’s Report, para 2.21 33 Q 35 34 Qq 12, 35 35 Q 12; C&AG’s Report, para 2.24 36 Qq 38, 40 37 C&AG’s Report, para 2.19 38 Q 39 12 Low emission cars expertise impacting on their ability to bid for funding.39 The Department told us that while it is not undertaking direct capacity funding, it is working with local authorities through the Energy Saving Trust to help them understand how to access funding and accelerate charging.40 39 British Parking Association submission page 2 40 Qq 38, 41 Low emission cars 13 2 Wider impacts of the transition Environmental and social impacts
18We questioned the Departments about the overall environmental and social impacts of the production and...
Recommended (the committee's words)
We questioned the Departments about the overall environmental and social impacts of the production and use of electric cars and whether they had undertaken analysis of the full lifecycle impacts of these vehicles, including production and disposal. The Department for Transport informed us that it has looked at the lifecycle emissions associated with electric vehicles, including reviewing global studies, and found that they are cleaner than internal combustion engines, although they cannot mitigate all emissions.41 The Department estimates that electric vehicles are between 30% and 40% lower in carbon emissions in their lifetime than internal combustion engine cars. It stated that electric cars also produce fewer particulates in the air than internal combustion engines, as these are non-existent from the tailpipe and fewer come from braking as the engines are regenerating the battery during this time.42 The Departments for Transport and for Business, Energy & Industrial Strategy wrote to us and quoted that a study for the European Commission from September 2020, found a typical new battery electric vehicle, operated in the UK, is considered to have about 35% of the lifetime greenhouse gas emissions of an equivalent petrol vehicle, and 41% of an equivalent diesel vehicle.43
19The proportion of emissions is greater in the manufacturing phase than during the on- the-road...
Concluded (the committee's words)
The proportion of emissions is greater in the manufacturing phase than during the on- the-road phase for electric cars, which means the geographical location of manufacturing is an important factor.44 The Department for Transport believed that car manufacturers are “very cognisant” of the location of car assembly as this can affect the overall carbon impact, with some manufacturers using renewable energy to mitigate this, for example Tesla with solar panels in Nevada, or BMW sourcing 100% renewables for its i3 plant.45 The Department pointed to the fact that producing a car in a country with a decarbonised energy grid would be better than a coal-generated grid.46
20With regard to the materials and supply chains used in producing zero-emission cars, the Department...
Concluded (the committee's words)
With regard to the materials and supply chains used in producing zero-emission cars, the Department for Transport acknowledged the issues and told us that manufacturers are focused on developments in this area. For example, Tesla and Renault are looking at developing batteries and electric motors which do not use rare earth materials. The Department expects the market for lithium to expand and pointed to the large quantities in Cornwall. It told us that it is not within manufacturers business interests to be sourcing products from volatile areas with supply chains that are unreliable or to be encouraging poor working practices, and that both manufacturers and the Department are focused on issues in this area.47 41 Qq 50–51 42 Qq 50, 52 43 Letter from the Department for Transport and Department for Business, Energy & Industrial Strategy to the Committee dated 30 March 2021 44 Q 50 45 Qq 50, 55 46 Q 50 47 Q 50 14 Low emission cars Other impacts of the transition
21There are a range of other issues that will need to be considered as part...
Concluded (the committee's words)
There are a range of other issues that will need to be considered as part of the transition to zero-emission cars. We are concerned about the impact of lost taxes from fuel duty and the potential standstill in technological change for the internal combustion engine.48 The Department for Transport explained that technological changes for the internal combustion engine are not expected to stop as it is using regulatory instruments to continue to drive down carbon emissions in these engines, including for other vehicles like buses. The Department expects to publish a Green Paper on the post-EU regime for carbon emissions later in 2021.49
22We questioned the Departments about issues we had heard about businesses not able to charge...
Concluded (the committee's words)
We questioned the Departments about issues we had heard about businesses not able to charge vehicles indoors overnight due to their insurance policies. The Departments did not seem aware of this issue and when the Departments wrote to us, they stated the government does not intend to intervene in commercial decisions by insurers as this could damage competition in the market.50 We also asked how other types of vehicles, such as motorhomes, are being considered in terms of the transition. The Departments wrote to us after the evidence session and reported that the 2020 budget had reduced Vehicle Excise Duty (VED) liabilities for new motorhomes depending on the dates when they were first registered.51
23Another issue to be considered by the Departments is that, as more zero-emission cars enter...
Concluded (the committee's words)
Another issue to be considered by the Departments is that, as more zero-emission cars enter the market, there will need to be people with the right skills in place to maintain them. The Department for Transport told us that this transition has already started and ensuring training is in place is a focus area of the Automotive Council.52
24The Department for Business, Energy & Industrial Strategy, having assessed a number of different scenarios...
Concluded (the committee's words)
The Department for Business, Energy & Industrial Strategy, having assessed a number of different scenarios for meeting net zero by 2050, has estimated that electric cars will increase electricity demand by around 20% by 2050 and we wanted to understand the network’s ability to cope.53 The Department explained that the increase in demand for electric vehicles is set within the context of an overall doubling of demand for electricity by 2050. The Department is approaching this from the perspective of generation and transmission and distribution networks; it told us mechanisms like the capacity market and contracts for difference are in place to obtain the right energy sources at the right time, and that transmission and distribution network operators are responsible for upgrading the network which they do within controls set by Ofgem.54 Not all changes to the system will push costs up, but currently, the Department estimates net changes to the energy system will add 2% to consumer bills in 2030.55 48 Qq 30, 55 49 Q 55 50 Qq 53–54; Letter from the Department for Transport and Department for Business, Energy & Industrial Strategy to the Committee dated 30 March 2021 51 Qq 19–21; Letter from the Department for Transport and Department for Business, Energy & Industrial Strategy to the Committee dated 30 March 2021 52 Q 30 53 Q 47; C&AG’s Report, para 2.28 54 Q 47 55 Q 48 Low emission cars 15
Evidence
Oral evidence sessions 1
- 11 Mar 2021Low emission cars3 witnesses, listed belowparliament.uk ↗
Who gave evidence 3 witnesses
- Bernadette Kelly CBPermanent Secretary, Department for Transport
- Richard BruceJob share, Director, Energy, Technology and Innovation, Department for Transport
- Sarah MunbyPermanent Secretary, Department for Business, Energy and Industrial Strategy