Positive growth in EV market defies economic uncertainty, but concerns mount that there are not enough charge points to support the switch to zero emission models
The Electric Vehicle (EV) market continues to provide one of the few bright spots in the UK's otherwise bleak economic outlook, but booming demand is further exacerbating fears that the government's chargepoint rollout is failing to keep pace with the numbers of new plug-in models hitting the roads.
New figures released today by the Society of Motor Manufacturers and Traders (SMMT) show the UK's new car market grew by 17.4 per cent in January to reach 131,994 units, marking the best start to the year since 2020 and the industry's sixth successive month of expansion.
SMMT said EVs were the main driver behind the market's recession-defying performance, with manufacturers offering even more choice to the market despite ongoing strains on supply chains.
Throughout January hybrid electric vehicles (HEVs) comprised 14.4 per cent of all new car registrations, increasing volumes by 40.6 per cent, while demand for battery electric vehicles (BEV) rose by 19.8 per cent to reach 17,294 units, or 13.1 per cent of all new registrations. Plug-in hybrid vehicles (PHEVs) posted only fractional growth, but they still accounted for 6.9 per cent of new cars reaching the road. Overall, SMMT confirmed that one in five new cars which were registered in the month came with a plug.
The trade body also expects the trend to continue, despite the UK's significant economic headwinds. BEV and PHEV models are now tipped to comprise more than one in four new registrations this year, with SMMT projecting growth of 32.1 per cent to around 487,140 units. By 2024 plug-in models are expected to account for almost a third of the market in 2024 totalling 607,150 units.
"The automotive industry is already delivering growth that bucks the national trend and is poised, with the right framework, to accelerate the decarbonisation of the UK economy," said Mike Hawes, SMMT's chief executive.
However, he also warned that the industry's upbeat outlook remained "fragile" due to the challenging economic landscape, rising living costs, and consumer anxiety over new technologies which could become more pronounced if the roll out of charging infrastructrure fails to keep pace with soaring demand.
According to the SMMT, during the fourth quarter of 2022, the ratio of new chargepoint installations to new plug-in registrations dropped to one for every 62. The performance marks a "significant fall" when compared to the same quarter last year when the ratio was 1:42. Overall, in 2022 one standard public charger was installed for every 53 new plug-in cars registered, which according to the SMMT is the weakest ratio since 2020.
The hike in numbers of new EVs on the road is undoubtedly good news for net zero. According to the Climate Change Committee (CCC) the transition to EVs will be one of the most important actions needed for the UK to meet its net zero targets. The CCC estimated that in order to reach net zero, all vehicles, including HGVs, need to be fossil fuel free by 2050. Hitting the goal means accelerating the uptake of EVs from around 400,000 on the roads today to 23.2 million by 2032 - or 55 per cent of all vehicles - before reaching up to 49 million vehilces by 2050.
So what can be done to make sure that there are enough chargepoints to ensure the EV transition does not stall?
Consumer confidence is often regarded as key to the roll out, especially as demand from early adopters starts to slow down. The SMMT has suggested that mandating rollout targets for infrastructure and regulating service standards would give drivers certainty that they will always be able to find a working, available charger and warned that "infrastructure must be built ahead of demand else poor provision risks delaying electric transition".
Kim Royds, EV director at British Gas, echoed the SMMT's concerns about the pace of the infrastructure roll out, warning that if drivers do not have confidence that there are enough chargepoints "we may see a tipping point where the supply of vehicles outstrips the number of chargers available, stalling the good progress that has already been made".
"Maintaining the momentum in the number of EVs arriving on UK roads is not going to be an easy ride without boosting the levels of investment in the charging network," she added. "It is vital that the government increases the pace at which public chargers are being installed across the country. What's more, it needs to work with organisations and public authorities to maintain these services, and ensure they are accessible to those without off-street parking that need them the most."
Concerns about weaknesses in the government's chargepoint strategy have been growing recently. Last month Labour warned that the latest figures from the Department for Transport showed the government is off track to meet the UK's targets for chargers, with only 9,000 installed last year and there being just over 37,000 public chargepoints in the UK overall.
The upcoming Budget was highlighted by SMMT as an opportunity to implement measures which could help accelerate both the EV transition and the charge point roll out.
It advised that reducing VAT on public chargepoint use from 20 per cent to five per cent in line with home charging would ensure more affordable access for all drivers, including those without off stree parking, and underpin a fairer transition to net zero.
It also recommended that the government review proposals to graft a Vehicle Excise Duty regime designed for fossil fuel cars onto zero emission vehicles (ZEVs). SMMT warned that the higher production costs which are associated with EVs means that currently more than half of the available BEVs would be subject to the expensive car supplement, which is due to apply to ZEVs from 2025 - a move that would make EVs more costly precisely at the time the government wants to drive mass adoption.
While the SMMT said it was "right" that all drivers should pay their fair share, it added that existing plans could unfairly penalise those making the switch, and risk disincentivising the market at the time when EV uptake should be encouraged. The SMMT also suggested that the government should tackle other fiscal blocks to uptake by raising recommended business mileage rates.
The government maintains it is working hard to ensure that there are enough chargepoints to go round. According to DfT, the government has already spent more than £2bn to accelerate the EV transition, and it expects that there will be at least 10 times more public chargepoints installed by the end of the decade, up to around 300,000 by 2030. Every weeks sees major new charger installation announcements.
Whether the government can keep up with the growing number of EVs on the road remains to be seen, but if sales of EVs continue to rise as the SMMT suggest then the race is on to make sure that the supply of vehicles does not outstrip the number of chargers available. The EV roll out remains one of the few economic success stories of the past few years. The government can ill
* This article was originally published here
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