Getting the UK electric vehicle sector into the fast lane

British car manufacturing history is dominated by iconic vehicles like the original Mini and the Jaguar E-Type. Both are recognised and associated with British manufacturing across the world. The only electric vehicle (EV) produced in the UK is the Nissan Leaf, not a brand high on the list of cars people know Britain makes. Nor do people see the UK as a leader in the EV revolution, that credit goes to California, the birth place of Elon Musk’s Tesla.   

The Prime Minister, Theresa May, wants this to change by “cement[ing] the UK’s position as a world leader in the low emissions and electric vehicle industry”. This aspiration has been joined by a commitment from Environment Secretary, Michael Gove, to phase out fossil-fuelled car sales in the UK by 2040. Unfortunately, neither will be enough to put Britain in the lead. But moving forward the ban on petrol and diesel cars ten years, from 2040 to 2030, would be a game changer.  

We need a strong EV market at home

The UK is somewhere in the middle of the pack in the global EV market. In 2017, Germany overtook us for the first time in EV sales, and China manufactured over half of all EVs worldwide. At the same time, other countries are committing to more rapid phase-outs of fossil fuelled cars, with Norway planning a 2025 phase out and Scotland setting a 2032 target. A 2030 UK target would help to strengthen the domestic market, supporting UK based EV manufacturers to grow and bringing down costs.

Green Alliance has quantified the benefits. More rapid phase out of petrol and diesel vehicles will have health and environmental benefits: cutting carbon dioxide emissions, air pollution and noise pollution. Economic upsides would be a reduction of the UK automotive trade deficit and halving oil imports by 2035. Estimated oil cost savings associated with a drop in vehicle imports could be as high as £6.63 billion a year by 2035.    

A twin track approach to phase out by 2030

2030 is only 12 years away, so the UK needs to move quickly. We propose a twin-track approach to get there building on two key cost points: whole life and upfront costs.

The first track focuses on shifting government and private fleets from internal combustion vehicles to EVs, until EVs achieve upfront cost parity, expected in 2022. EVs are already cost effective for fleet managers who can take advantage of their lower lifetime operating costs. Private fleets make up over half of all new sales in the UK, and it is estimated that EVs could save company car owners £7,400 over three years.

Once upfront cost parity has been reached, the focus can shift to the second track, managing the phase-out of diesel and petrol cars run by the wider population. By introducing a zero emission vehicle (ZEV) mandate, domestic manufacturing can be aligned with demand. If this mandate is combined with clean air zones, similar to London’s ultra-low emission zone, it will help to boost EV sales among those driving into cities regularly.

Whether all of this means the world will start to associate Britain with EV manufacturing remains to be seen, but it would be an excellent start for a nation aspiring to lead the revolution.

Bente Klein is a Policy Assistant at the environmental think tank Green Alliance

The views expressed in this article are those of the author, not necessarily those of Bright Blue




Pedal power: why cycling should be at the centre of Government thinking

The Government is being taken to court yet again over its air quality plans. Environmental lawyers Client Earth have previously defeated both of the Government’s previous attempts at an air quality strategy. This third version has been reduced in scope to an ‘Air quality plan for nitrogen dioxide’, pending a fuller air quality strategy next year. Yet it too has been roundly criticised by transport planners, health professionals, environmentalists, and local authorities alike.

Everyone now agrees that previous governments’ support for diesel vehicles was a terrible mistake. We traded off marginal reductions in greenhouse gas emissions against increases in lethal pollutants. But action on pollution also needs to be linked to other issues too. A 2009 Cabinet Office report, on the costs of transport in English urban areas, found that the economic costs of air quality, congestion, road casualties and physical inactivity were all of a similar magnitude: around £10 billion annually.

Based on this evidence, surely it makes sense to invest in policies that tackle all of these costs by addressing their common cause: too much motor traffic. Transport planners since the 1960s have acted as if congestion was their number one challenge, with the other issues being secondary. Now we risk taking a similarly myopic view of air pollution, missing the bigger picture. Demonising diesels is now commonplace, with electric vehicles being seen as an environmental saviour. They are undoubtedly beneficial both for air quality and the climate – yet relying purely on electric vehicles would still leave us with congested and dangerous streets.

Investing in cycling and walking is, by contrast, a hugely cost-effective solution to all of these problems. Enabling people of all ages and abilities – young and old alike – to get around safely on foot or by bike would not only civilise our streets but would also halt the rise of obesity, type-two diabetes and other inactivity-related conditions, with all their human and economic costs.

But don’t cycle facilities cause congestion and pollution? After all, that’s what the papers keep saying!

Well, that might be true if you put your blinkers on and look only at the immediate impacts on motor vehicle journey times specifically along a street where new protected cycle lanes have just been built. But the opposite is true if you look at the wider road network, and consider the efficient movement of people (rather than motor vehicles), particularly in the longer term. A typical lane of a typical road can carry 2,000 cars per hour, or 14,000 bicycles. Reallocating motor vehicle space as space for cycling enables a lot more people to get from A to B efficiently, and reduces the amount of congestion and pollution they create throughout the rest of their journey. This benefit can be expected to easily outweigh the additional congestion faced by those who continue driving along the road which now has less motor vehicle capacity. London’s cycle superhighways are already carrying a lot more people than they could possibly have done under their previous configuration.

Moreover, this benefit is set to grow. People and businesses will continue adapting to changes in travel times, switching to the most efficient means of getting around. But the really big benefits come from creating an increasingly comprehensive cycle network. So far we only have a few disconnected lanes here and there. It will increase massively as our towns and cities start developing comprehensive cycle networks – as is the norm in countries like Denmark and the Netherlands.

So, what does the Government need to do to maximise the air quality and other benefits of cycling?

For one, it should require local authorities to draw up a Local Cycling and Walking Infrastructure Plan (LCWIP) as part of every Clean Air Zone. The Government’s recommended approach to planning comprehensive walking and cycling networks is a huge leap forward from our current tendency to provide disconnected cycle facilities where there happens to be a bit of spare space and a bit of spare cash. Yet at present, English local authorities are under no obligation to follow this guidance (unlike their Welsh counterparts), nor is there any financial support or incentives for those who do so. Changing this has to be part of the Government’s wider air pollution strategy.

It also needs to shift the balance of funding from inter-urban road schemes to healthy, efficient and sustainable local transport solutions. The conventional argument for road-building is that it supposedly benefits the economy. Yet this claim has been repeatedly questioned by leading transport academics. And it ignores the adverse economic impacts of a car-dominated transport system on the economies of our urban areas – as quantified in the Cabinet Office report mentioned earlier. Local authorities, combined authorities and ‘metro-mayors’ of all political persuasions are eager to invest in high-quality walking and cycling provision, recognising how this could improve the health of their streets, their residents and the local economy. A shift in funding would enable them to do so, yielding huge benefits.

Alongside this, the Government should coordinate a national framework for urban road user charging schemes, to cover both congestion and pollution impacts. The main reason why the Government keeps losing legal battles over air quality is because of its reluctance to support road user charging, despite having identified it as the most effective measure for tackling air pollution in the “shortest possible time” (as required by law). Instead, the Government has left councils not only to make the political justification for road user charging, but also to work out the charging processes and technologies. It claims that air pollution is a local problem. Yet surely a problem in over 200 locations needs to be seen as a national problem! In the name of efficiency, it needs to provide a national lead on tackling air pollution and congestion. There are huge economic, environmental, health and quality of life benefits to be gained from doing so.

The third is to back this up with financial incentives not only for people to trade in old diesel cars, but also for motor vehicle manufacturers to stop selling them. A scrappage scheme could be funded by a short-term increase in vehicle excise duty for the dirtiest motor vehicles.

Over time though, the financial signals need to shift towards reducing the use (rather than merely the ownership) of motor vehicles – starting in the most congested and polluted areas, but progressively tackling their energy and climate impacts too. Simply electrifying the vehicle fleet, without reducing our use of motor vehicles, would increase our energy demand, which would need to be met from renewables if reductions in greenhouse gas emissions are to be maximised. It could also massively reduce Treasury revenues – by between £9 billion and £23 billion, according to one estimate. There has to be a clear and transparent link between charging that deters the use of dirty and inefficient transport, and investment in efficient, healthy and clean alternatives such as walking and cycling.

Roger Geffen is the Policy Director at Cycling UK

The views expressed in this article are those of the author and are not necessarily shared by Bright Blue

Electric vehicles: driving future growth

Greater uptake of electric vehicles (EVs) will be important for decarbonising Britain’s transport sector, since it will mean a reduction in the use of petrol and diesel cars. Air quality will also be improved as harmful emissions such as particulate matter and nitrogen dioxide are reduced.

In addition to these environmental and health factors, there has been a number of recent studies about the economic impact of EVs on the UK. One of the aims of Bright Blue’s Green conservatism project is to advocate green policies that enhance Britain’s prosperity. This blog will examine the potential for EVs to contribute to jobs and growth in the UK economy.

Current performance

The electric car industry is currently enjoying phenomenal growth in the UK. There are two main types of EV: a plug-in hybrid, which has both an electric motor and an internal combustion engine, and a pure EV, which just has an electric motor. According to the Society of Motor Manufacturers and Traders (SMMT), 2015 saw a 50% increase in sales for pure EVs compared to the previous year. Tesla’s new model of electric vehicle received 276,000 pre-orders in three days of launching. Last week, Nissan Europe reported record sales of EVs in 2015, an increase of 45% in the previous year. They ascribe much of this increase to businesses looking to decarbonise their vehicle fleets.

There is still a long way to go before EVs properly penetrate the automotive market, however. Large percentage gains mask the fact that EV sales are starting from a very low base. Even among new car sales, EVs make up just over 1%. They are also still very dependent upon government subsidy to compensate buyers for the greater upfront cost. In December 2015, the Government committed to spending £600 million on the plug-in car grant system over the next five years. Under the revised scheme, buyers of pure EVs receive a subsidy of £4,500, while new owners of plug-in hybrid vehicles get £2,500. The Department for Transport’s target is for 100,000 drivers to benefit from this support.

Future success

In its report on the fifth carbon budget, the Committee on Climate Change has said that EVs need to constitute 9% of new vehicle sales in the UK by 2020 and around 60% by 2030, if the most cost-effective path to carbonisation is to be achieved. This is very ambitious growth, and will require significant reductions in the upfront cost. There is evidence that this will be achievable. The CCC’s finding that EVs will become cost-effective in the mid-2020s is supported by Bloomberg New Energy Finance's recent analysis of this market. They studied particularly the costs of batteries, which are one of the main factors driving the price of EVs. Lithium-ion batteries have fallen in cost by 65% since 2010, with costs expected to fall further to around a third of their current level by 2030. Their report found that 2025 was the year the cost of EV ownership fell below that of conventional vehicles.

Green jobs

This boom in EV sales with have a major impact in the UK, both in the automotive industry and the wider economy. A study published this month by Loughborough University found that the electric vehicle industry in the UK could support 320,000 jobs and generate £51 billion of economic activity by 2030. This is contingent on further government investment in electric vehicle infrastructure and training of skilled mechanics. Cambridge Econometrics has also tried to quantify the direct economic benefits of EVs. In a report from 2013, they forecast that there would be 7,000 to 19,000 net additional jobs by 2030 under a low-carbon transport transition. This is because the UK petroleum industry is not very job-intensive. Moreover, as the UK is now a net importer of oil, the switch to powering vehicles with British-produced electricity will accrue more revenue for UK energy companies.

Because of the importance of the price of oil to the wider economy, the increased uptake of EVs in the UK will have an impact beyond the automotive sector. Last week's report by Cambridge Econometrics found that policies to tackle climate change, including the transition away from combustion engine vehicles, will reduce demand for oil across the EU and therefore lower the price compared to what it otherwise would have been. They find that this lower price will increase real incomes and enable more consumer spending on UK-produced goods and services. This model of course is predicated upon a number of assumptions, but it provides confidence that the transition will be broadly economically positive.

The UK automotive industry has enjoyed a renaissance in recent years. If this important sector, and the jobs that depend on it, is to thrive in the low-carbon economy, the UK must ensure it become a world leader in electric vehicles.

Sam Hall is a Researcher at Bright Blue