Select committee inquiry
Electric vehicles: developing the market
Closed
What the inquiry looked at
“The Business, Energy and Industrial Strategy Committee investigates the role of electric vehicles in the transition to a low-carbon economy and as part of the Government's Industrial Strategy.”
The committee's words, from the inquiry page on parliament.uk ↗.
What it found
In the committee's words, from the summary of 14th Report - Electric vehicles: driving the transition ↗
Electric vehicles (EVs) represent exciting opportunities for the UK: as a technology to reduce greenhouse gas emissions from our largest-emitting sector; as a tool to reduce local air pollution, the second-highest cause of avoidable mortality in the country; and as a new industry with substantial export opportunities. International market trends suggest that electric cars and vans will reach price equivalency with internal combustion engine (ICE) vehicles by the mid-2020s, and that EV sales will overtake petrol and diesel sales by the late 2030s. The UK’s automotive sector will need to take a lead in this transition if it is to remain a major player in the global market. A shift away from ICEs to zero emission vehicles on UK roads is further essential if we are to achieve our national decarbonisation targets at least possible cost.
Targets
Recognising these challenges, the Government has set ambitions to ensure that almost every car and van in the UK is a zero emission vehicle by 2050, and to make the UK a world leader in EV and battery technologies. However, its targets for 2040–to phase out sales of new ’conventional’ petrol and diesel cars and vans, and to require all new cars and vans to be ‘effectively’ zero emission–are vague and insufficiently ambitious to deliver on its longer-term aims. If the Government is genuinely committed to leading the EV transition and meeting its decarbonisation targets, it needs to promote investment in this new technology by clarifying and increasing the ambition of its sales targets. We recommend that the Government bring forwards a clear, precise target for new sales of cars and vans to be truly zero emission by 2032.
Purchase support
The upfront costs of purchasing an EV remain very high relative to ICE vehicles.
Significant additional deterrents to EVs include ‘range anxiety’ (the concern that an EV will not have sufficient charge to complete a given journey) and the limited choice of vehicle models. These factors mean that incentives are required to encourage motorists to make the switch to EVs. However, the Government has recently announced sudden and substantial cuts to the Plug-in Grant Scheme, in a move that runs counter to the advice of the Committee on Climate Change and witnesses to our inquiry. We recommend that purchase support for EVs should be maintained at October 2018 levels for the time being, and more generally until the cost of EVs nears price parity with conventional ICE vehicles. In addition, existing grants and tax incentives are in practice only accessible to wealthier motorists. The Government should explore more creative support options to ensure that all motorists can benefit from EVs, for example through car clubs and the second-hand market.
The current fiscal regime for EVs provides inconsistent messages about the Government’s ambitions for EVs. We recommend that the Government aligns new fiscal changes with the zero emissions target. EVs should be promoted by preferential Vehicle Excise Duty rates and other incentives, and preferential rates on company car tax for EVs should be brought forward without delay.
What the government said
No government response is linked to this report.
How the inquiry ran
Each dot is a dated item listed on this page, from the inquiry's opening on 14 March 2017 to its close on 15 November 2018.
- Report 19 Oct 2018
What it recommended 20 recommendations · 6 conclusions
1The Government’s lack of clarity on the meaning of the 2040 targets is unacceptable.
Concluded (the committee's words)
The Government’s lack of clarity on the meaning of the 2040 targets is unacceptable. Industry cannot be expected to make supportive investment decisions when Ministers and officials themselves cannot say how the target should be interpreted. This means that car manufacturers do not have certainty about the types of vehicles they will be able to market in the UK in the near future, and charging infrastructure providers are less able to make assessment about future demand for their product. The unclear messaging from Government is damaging and unfair to those companies wishing to drive the transition to EVs. The Government cannot rely on expectations alone to deliver desired policy outcomes.
2Plug-in hybrids could have a role to play during the EV transition, at least in...
Recommended (the committee's words)
Plug-in hybrids could have a role to play during the EV transition, at least in the near term—but non-plug-in hybrids are not compatible with the Government’s long- term climate change commitments. Whilst we support the principle of technology neutrality, the Government should recognise that by allowing the ongoing sale of conventional hybrids, and short-range plug-in hybrids, the current ‘ban’ fails to ensure that only the cleanest new vehicles will be available for sale from 2040. We recommend that the Government either acknowledge that petrol and diesel will ultimately need to be fully phased out from cars and vans, or admit that it is not seeking a zero emissions fleet. It cannot have both. We recommend that the Government aim for zero emissions, in line with its longstanding 2050 target, and phase out non-plug- in and all but the cleanest plug-in hybrid vehicles. This should include more stringent zero emission range requirements for plug-in hybrids to ensure that vehicles deliver on targeted emissions reductions.
3The transition to EVs is set to accelerate over the coming decades; the UK will...
Recommended (the committee's words)
The transition to EVs is set to accelerate over the coming decades; the UK will need to match, or better, international commitments if we are to be a ‘world leader’. A leadership position would enable the UK to develop sought-after expertise in EV technology, manufacturing and charging infrastructure, with substantial potential export opportunities. The current 2040 target for ‘effectively zero emissions’ vehicles places the UK in the passenger seat, leaving us to accept vehicle emission standards set by more ambitious international regulations. Stronger ambitions are also needed to ensure that the Government delivers on its goals to mitigate climate change and improve air quality. A more ambitious target date would help to ensure that petrol and diesel vehicle stock is retired by 2050, and would align the goal for England, Wales and Northern Ireland with the Scottish Government’s ambition to phase out petrol and diesel cars and vans by 2032. Zero should mean zero. We recommend that the Government prioritise overarching policy goals on climate change and air quality over sectoral interests, and bring forwards a clear, precise target for new sales of cars and vans to be truly zero emission by 2032. This would put the UK in the ‘first tier’ league of nations leading the EV transition, and help to harmonise objectives across the UK.
4We welcome the Government’s willingness to set interim targets, with the adoption in the Road...
Recommended (the committee's words)
We welcome the Government’s willingness to set interim targets, with the adoption in the Road to Zero Strategy of an ambition for “at least 50%, and as many as 70%, of new car sales and up to 40% of new van sales being ultra low emission by 2030”. Electric vehicles: driving the transition 49 We recommend that the principle of interim targets is maintained, with the interim targets themselves strengthened and updated to reflect the increase in ambitions to bring forward the phase out of ICE vehicles to 2032.
5It is imperative that Government supports domestic industry and workers through the EV and EU...
Concluded (the committee's words)
It is imperative that Government supports domestic industry and workers through the EV and EU exit transitions by creating an attractive domestic environment for investment.
6The Government’s decision to cut substantially grants for pure electric vehicles, and to remove entirely...
Recommended (the committee's words)
The Government’s decision to cut substantially grants for pure electric vehicles, and to remove entirely those for plug-in hybrid vehicles, has been made too soon and too suddenly. We recommend that purchase support for EVs should be maintained at October 2018 levels for the time and more generally until the cost of EVs nears price parity with conventional ICE vehicles. We further recommend that the Government sets out its intentions for the future of plug-in grants for the next five years. If the Government is unable to commit to ongoing support, it should at least set out the terms under which grants will be phased out, well in advance of the implementation of any reductions.
7We recommend that the Government follows the example of EV world leaders, and provides support...
Recommended (the committee's words)
We recommend that the Government follows the example of EV world leaders, and provides support to make EV prices more competitive with conventional cars and vans.
8Fiscal signals should send a clear and consistent message about the Government’s ambition to move...
Recommended (the committee's words)
Fiscal signals should send a clear and consistent message about the Government’s ambition to move to a zero emission vehicle fleet. There is little sense in introducing changes which reduce incentives to purchase an EV, or which encourage consumers to delay, when the Government has clearly set out its ambition to increase EV uptake. We recommend that the Government aligns new fiscal changes with the zero emissions target. It should bring forward the introduction of preferential rates on company car tax without delay, or at least hold company car tax on EVs level until the preferential rates come into effect.
9EVs should not be the sole preserve of the relatively affluent.
Recommended (the committee's words)
EVs should not be the sole preserve of the relatively affluent. We recommend that the Government introduces more creative support mechanisms to ensure that all motorists are able to benefit from EVs. This could include public car clubs, and improved communications and documentation to enable consumers to better assess the real world financial and environmental performance of both new and second- hand EVs.
10Commercial vehicles have been largely overlooked by emissions reduction policies to date.
Recommended (the committee's words)
Commercial vehicles have been largely overlooked by emissions reduction policies to date. Whilst we welcome the Road to Zero Strategy, it does not go far enough in setting a clear direction for the decarbonisation of the vehicle sector. We recommend that the Government sets firm targets for deployment of ultra low emission commercial vehicles, provides support to expedite uptake amongst hub-based operations, and supports the development of low carbon solutions for heavy, long-distance vehicles. 50 Electric vehicles: driving the transition The voluntary target for HGVs should be monitored, as the Committee on Climate Change has advised, with an option to introduce a firmer target, as for cars, should progress fall off track.
11We welcome assessments by National Grid, and others, that the EV transition is unlikely to...
Concluded (the committee's words)
We welcome assessments by National Grid, and others, that the EV transition is unlikely to present a risk to the security of national electricity supply. Nonetheless, the increased electricity demand will necessitate investment in new generation capacity. The EV transition therefore strengthens the case for Government to review its support for new generation plant and to ensure that all support is consistent with the Government’s overarching aim of least-cost decarbonisation.
12We welcome the introduction of powers in the Automated and Electric Vehicles Act 2018 for...
Concluded (the committee's words)
We welcome the introduction of powers in the Automated and Electric Vehicles Act 2018 for the Secretary of State to make regulations prohibiting the sale or installation of charge points unless they meet certain smart functionality requirements.
13We welcome the Government’s recent £30 million investment in Vehicle-to-Grid R&D to explore the potential...
Concluded (the committee's words)
We welcome the Government’s recent £30 million investment in Vehicle-to-Grid R&D to explore the potential of this technology.
14We welcome the provisions of the Automated and Electric Vehicle Act 2018 to allow Government...
Concluded (the committee's words)
We welcome the provisions of the Automated and Electric Vehicle Act 2018 to allow Government to set and enforce regulations that: standardise and ensure interoperability of public charge points, including payment systems; ensure provision and standardisation of information about public charge points; mandate charge points at large fuel retailers; and require smart charging capabilities. We very strongly recommend that the Government make full use of these powers by setting and enforcing new regulations to promote the development of convenient, accessible charging infrastructure.
15Delaying support for rural charge points will only prolong range anxiety amongst potential EV motorists,...
Recommended (the committee's words)
Delaying support for rural charge points will only prolong range anxiety amongst potential EV motorists, impeding development of the market. We recommend that the Government should not wait for additional evidence of the need to support the business case for rapid charge points in rural and remote areas, but instead subsidise the provision without delay and by 2022 as recommended by the National Infrastructure Commission.
16We welcome the Government’s investment in EV showcase initiatives such as the Go Ultra Low...
Recommended (the committee's words)
We welcome the Government’s investment in EV showcase initiatives such as the Go Ultra Low Cities scheme, which have been central to testing and demonstrating innovative deployment approaches. Now that EVs are becoming mainstream, an alternative approach is needed to promote deployment more evenly across regions. The Government should introduce a strategy to support local authorities that have been less successful in accessing funding so far by 2021, for example by replicating Go Ultra Cities in regions which have poor charging provision, or by allocating funds on a more systematic basis.
17Rather than dictating the precise solutions to be used, we recommend that the Government increase...
Recommended (the committee's words)
Rather than dictating the precise solutions to be used, we recommend that the Government increase the flexibility of funding for public charge points, providing local authorities with the autonomy to assess and install charging infrastructure that fits in with local needs and priorities. Future funding schemes that seek to target specific Electric vehicles: driving the transition 51 solutions should be considered only if consultation with local authorities indicates that there is a clear appetite for these solutions, and that proposed levels of funding will be sufficient to enable their development.
18Central Government’s focus on promoting on-street charge points is in conflict with local policy priorities...
Recommended (the committee's words)
Central Government’s focus on promoting on-street charge points is in conflict with local policy priorities and is not working. Support is needed for alternative solutions such as local charging hubs. The Government should proactively engage with local authorities, motorist organisations, charge point providers and distribution network operators to identify mutually agreeable solutions—including maintenance plans—so that motorists without off-street parking do not remain at a disadvantage. We have seen no evidence that Government has adequately involved local authorities in such discussions so far, and our evidence suggests that it is not realistic to expect local authorities to act spontaneously: proactive engagement from Government is required.
19We welcome the amendments to the National Policy Planning Framework to encourage the consideration of...
Recommended (the committee's words)
We welcome the amendments to the National Policy Planning Framework to encourage the consideration of charge points at new developments and in local parking standards. We recommend that these be made more specific, to set a minimum number of charge points that should be included in both residential and non-residential developments. The number of charge points required should be linked to the expected use and occupancy of the development.
20Distribution network operators have the right to reject applications for larger charge point installations.
Recommended (the committee's words)
Distribution network operators have the right to reject applications for larger charge point installations. Whilst this is important to maintain secure and reliable local electricity supplies, there are concerns that network companies have sometimes obstructed the development of charging infrastructure and that they have little commercial incentive to promote EVs. We recommend that the Government investigates options to either incentivise or require electricity network companies to facilitate the development of charging infrastructure.
21We welcome the Government’s recent commitment, in the Road to Zero Strategy, to “set [...
Recommended (the committee's words)
We welcome the Government’s recent commitment, in the Road to Zero Strategy, to “set [ … ] our definitions of ultra low and zero emission vehicles that local areas may adopt”. We recommend that these definitions must be unambiguous, and that the emissions performance criteria used across different departmental policies and incentives should be made consistent to reflect the definitions adopted.
22There is a mismatch between the Government’s ambition to develop national charging infrastructure and its...
Recommended (the committee's words)
There is a mismatch between the Government’s ambition to develop national charging infrastructure and its decision to leave delivery largely to local authorities and private actors. A whole systems perspective is needed to identify solutions that will deliver required functionality at least overall cost, and which will ensure adequate provision of charge points nationwide. We recommend the Government recognise its responsibility in this role and coordinate a shared approach to planning national charging infrastructure at least cost by December 2019. This should ensure sufficient provision of charge points in all regions, including remote areas. It should also take into account electricity grid impacts, including potential interactions with a more widespread move to electrification in heating. We further recommend that the Government and Ofgem work with charge point providers and electricity network companies to assess, by June 2019, the potential for investments ahead of need which could hasten the growth of charging infrastructure and reduce the cost of its implementation.
23The nature of ‘sufficient provision’ will differ between areas according to population density, parking arrangements,...
Recommended (the committee's words)
The nature of ‘sufficient provision’ will differ between areas according to population density, parking arrangements, the road network and local amenities. In some areas it will require the installation of charge points and electricity grid upgrades which are not commercially viable, but which are necessary to make EVs accessible to residents and to ensure accessibility of the region to other EV motorists. We recommend that the Government sets out a strategy by June 2019 that allows for the nature of local provision to be determined locally, and to deliver charging infrastructure to ‘difficult’ and remote localities, so that these are not further isolated by the EV transition. Care should be taken to ensure that investments in the charging network are future- proofed, taking account of possible changes in technology and use, to minimise the risk of constructing infrastructure that later becomes redundant.
24We welcome the Government’s ambitions on EV and battery technologies, and its investments so far...
Recommended (the committee's words)
We welcome the Government’s ambitions on EV and battery technologies, and its investments so far through schemes such as the four-year Faraday Challenge. However, more support is needed to ensure we retain our status as an international automotive leader, and to minimise the economic impacts of declining ICE trade through the 2020s. It is important that as any jobs in ICE production are lost, so new ones are created in EVs, batteries and associated technologies. We recommend that the Government set out a longer-term, 10-year strategy for batteries to help the UK to take a lead in this technology. If we do not act other countries will go first, and there is a risk that part of the UK automotive sector’s market share could be lost to emerging EV leaders. Funding for R&D should focus on areas where UK has existing strengths and so a realistic chance of taking a lead, for example in battery design and development, electrolyte manufacturing, traction motors, lightweight materials, and power electronics.
25Second life battery applications, EV end of life disposal and battery recycling are nascent areas...
Recommended (the committee's words)
Second life battery applications, EV end of life disposal and battery recycling are nascent areas that could offer significant industrial opportunities. We recommend that the Government explores the potential value of these to the UK and take a lead in developing those that are promising, before other countries gain a competitive edge.
26We welcome the Road to Zero Strategy’s acknowledgement of these concerns and the commitments to...
Recommended (the committee's words)
We welcome the Road to Zero Strategy’s acknowledgement of these concerns and the commitments to review the adequacy of existing regulation to protect mechanics and to work alongside the IMI to ensure mechanics are well trained; we recommend the Government further develops EV-specific qualifications for mechanics and engineers. The intentions of the Automotive Sector Deal to develop EV and battery manufacturing are also helpful, but the Deal does not go far enough in providing support for actors across the supply chain to transition from ICE to EVs. We recommend Government and business work together to develop a clearer joint plan to help companies repurpose ICE manufacturing facilities, to help workers develop new EV skills, and to ensure that independent dealerships and mechanics are equipped to advise on buyers on EV options and to conduct repairs safely. This will be essential to help the UK automotive sector retain top-level expertise and relevance as global demand moves from ICEs to EVs. We recommend the Government further develops EV-specific qualifications for mechanics and engineers. The intentions of the Automotive Sector Deal to develop EV and battery manufacturing are also Electric vehicles: driving the transition 53 helpful, but the Deal does not go far enough in providing support for actors across the supply chain to transition from ICE to EVs. We recommend Government and business work together to develop a clearer joint plan to help companies repurpose ICE manufacturing facilities, to help workers develop new EV skills, and to ensure that independent dealerships and mechanics are equipped to advise on buyers on EV options and to conduct repairs safely. This will be essential to help the UK automotive sector retain top-level expertise and relevance as global demand moves from ICEs to EVs.