New report from PwC calls on government and industry to work together on EV roll out or risk technical 'pinch points' putting the brakes on the sector
The smart phone revolution only happened because network operators and government upgraded the underlying infrastructure the sector relied on, providing improved coverage and fasted internet speeds. Now the same co-operation between the public and private sector is urgently needed if the electric vehicle (EV) revolution is to live up to its early promise.
That is the stark warning contained in a new report today from consultancy giant PwC, which calls on the government and industry to develop a "road map" to avoid the "pinch points" that currently lie ahead on the EV revolution highway. The report argues that despite welcome government funding commitments and growing private sector investment limited charging infrastructure, pressures on the national grid, and a lack of consumer education could combine to put the brakes on EV adoption.
"If we are to realise our EV ambitions, we need to see industry and government come together to agree a sustainable and comprehensive road map," said Steve Jennings, PwC energy and utilities leader. "Failure to do this might not only mean the lights go out but the wheels could come off our EV goals as well."
The new report is based on interviews with 1,000 drivers of petrol/diesel cars. It found 60 per cent of drivers had not considered upgrading to a battery electric vehicle since they last bought a vehicle, while 51 per cent said they were not choosing EVs because of the 'initial price' and 'availability of charging'.
The results could be taken as a sign of the markets significant potential for continued growth. For example, it suggests 40 per cent of motorists have considered switching to plug-in vehicles, while concerns about the 'initial price' of EVs should prove relatively short list as sticker prices continue to fall.
Indeed the PwC study comes in the same week as a separate report from Aurora Energy Research, predicted 30 per cent of UK cars could be electric by 2035 as demand soars following the sector reaching cost parity with conventional cars in the early 2020s.
"In the coming years we are likely to see a rapid increase in the number of electric cars on our roads - both in the UK and globally - as they reach cost parity with conventional cars," predicted Richard Howard, head of research at Aurora Energy Research.
But both reports acknowledged the scale of this growth will be determined by the pace at which extensive and smarter charging infrastructure is deployed.
The government has earmarked £400m of funding to support the roll out of charging infrastructure and only today charging network operator ChargePoint announced it has extended its partnership with fast charger supplier InstaVolt, with an order for 400 more rapid chargers.
However, the PwC report revealed that currently the roll out of new charging points is lagging behind the number of EVs taking to the roads. It found that while Battery EV and plug-in hybrid EV numbers accelerated by 98 per cent between 2012 and 2016, to almost 85,000 vehicles, the number of publicly available charge points rose just 44 per cent over the same time period, to just over 12,000.
There are fears that a failure to keep pace with the adoption of EVs could result in speed bumps in the future for the fast accelerating market. Many city residents do not have access to private charging facilities, leaving them reliant on public infrastructure. Only 48 per cent of Londoners, 61 per cent of Edinburgers and 65 per cent of Mancunians have access to off-street parking, meaning public investment in charging infrastructure is essential if they are to join the EV revolution at scale.
The PwC report cites the IEA's assessment that "early EV market developments show that the availability of chargers emerged as one of the key factors for contributing to the market penetration of EVs".
Efforts to accelerate infrastructure installation are already being made. The government committed a further £400m, as part of the Autumn Budget, to improve this infrastructure. And earlier this month, Bluepoint London announced plans to install 1,000 new charge points in London by the end of this year. Other network operators are working on similarly ambitious expansion plans.
However, the roll out still faces challenges. The Department for Transport acknowledged earlier this month that only five councils applied for funding to install EV infrastructure, leaving £4.5m unclaimed. The government described the low levels of funding uptake as "extremely disappointing".
The PwC report also warned that rising EV use would require "power grid reinforcement" and/or "deployment of smart technologies". It suggests that should home-charging become the norm, a "step-change" to residential power grids should happen to help the national grid "handle expected peaks in electricity demand".
However, new technology is already being pioneered to address these well documented technical challenges. The government only this week awarded £11m to four EV pilot projects which will see businesses to trial so-called vehicle to grid (V2G) technology, where EVs can supply power back to the grid at peak times reducing pressure on existing power networks.
Aurora's study this week suggested that the national grid would be able to handle increased demand from EVs, as long as operators deploy a combination of smart grid technologies and new tariffs that incentivise people to charge their cars away from periods of peak demand.
"There are many stories out there suggesting our power system cannot cope with the growth in electric vehicles," said Richard Howard, Head of Research at Aurora Energy. "On the contrary, our research suggests that provided EV charging is smart, the GB system can easily accommodate 15 million+ electric cars."
However, PwC also suggested that a lack of public education on the benefits of EVs is also dampening sales. EV sales may be outperforming the wider auto market, but PwC's survey found just 11 per cent of drivers felt "comfortable evaluating the total cost of BEVs". The report suggested marketing messages had to date focused more on the "environmental benefits", rather than the "compelling economics of driving an EV, most notably the significantly reduced running costs".
In addition, further challenges could await if the EV revolution does step up a gear. PwC noted that the development of a new EV-friendly infrastructure may "make current technology and infrastructure investments rapidly redundant". And it also questioned what would replace the £25bn made in fuel duty by the government, if motorists swith en masse to EVs.
The reports this week from PwC and Aurora provide a timely reminder that the EV revolution is unlikely to be the smoothest of journeys. Significant infrastructure investment and technology development will be required, alongside close co-operation between the public and private sectors.
But the good news is that both politicians and business leaders are well aware of these 'pinch points', while the financial and environmental benefits of EVs are becoming clearer than ever. There may be the occasional roadblock ahead, but they all look surmountable.
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