The government has set the UK on a fast track to electric vehicles (EVs). What needs to happen now to deliver on this ambitious green transport plan?
In 2020 the UK government announced a bold plan to ban sales of new Internal Combustion Engine (ICE) vehicles by 2030 – ten years sooner than originally planned. This will unlock and accelerated shift to zero emissions driving, but more must happen to make the transition at the scale and speed that’s needed.
The green transport revolution is already up and running. That’s evidenced by the fact that plug-in vehicles accounted for nearly one-in-seven of new cars purchased in March 2021. Our latest EV business survey shows that UK firms are set to invest £15.8bn in electric vehicles over the next 12 months, a 50% increase in their spending in the year to March 2021.
But making sure that all new vans and cars are 100% electric by 2030 will be a huge challenge. To put that in context, you just need to consider that there’s 40 million (mainly petrol and diesel) vehicles on UK roads.
The countdown to the 2030 ICE ban means there’s only nine years to prepare for the mass move to EV. This will be difficult to achieve without supportive policies that enable industry EV specialists like British Gas and Centrica Business Solutions to roll out battery electric vehicle infrastructure at scale.
If the UK is to deliver on its EV and net zero ambitions, delay is not an option. The climate change clock is ticking and transport is a major source of pollution – contributing around 27% of UK greenhouse gas emissions – mainly from petrol and diesel road vehicles, which also cause air quality problems.
Early progress on EV
Business and government have worked together to deliver the UK’s early steps to clean electric transport.
As members of the Climate Group EV 100 initiative, Centrica has joined with 101 other businesses globally to spearhead the move to greener transport. To help deliver on our company’s 2045 net zero target, we’ve recently brought forward our fleet electrification deadline by five years. Our goal is to make our 12,000-strong British Gas and Centrica fleet 100% electric by 2025, while also helping our customers transition to cleaner transport.
British Gas recently announced the UK’s largest commercial electric vehicle (EV) order – totalling 3,000 all-electric vans. And we’ve already installed more than 17,000 electric vehicle charge points for our customers – ranging from 3.5kW to ultra-fast 350kW. During the next year we plan to install an additional 23,000 more.
Government support has helped unlock the UK’s early stage EV roll out, including tax benefits, grants and financial incentives for charge point installations and EV purchase costs. The recent Energy White Paper has set out a £1.3 billion investment plan to accelerate the rollout of EV charging points across homes, streets and motorways. Another £1 billion has also been pledged to support the purchase and development of EVs themselves.
This joint government and business action is paying off in making the move to EV achievable and economically viable. Get ready for mass EV roll-out?
But what happens next? How do we achieve enormous EV growth in the run up to 2030? How do we open up the emissions-free electric opportunity to everyone?
The scale and complexity of the challenge mean that EV specialists like us cannot do it alone. We need continued government support to create a flexible energy system that ensures electric vehicles of the future are powered affordably by renewables. We need help to stimulate EV vehicle market competition and growth, and financial support to underpin the phase-out of petrol and diesel vehicles.
Three policy essentials to hit the 2030 EV deadline
Now is the time to seize the green transport opportunity. There are several ways that government and businesses can work together to make this happen. But we’re seeking 3 key policy commitments that will enable businesses like ours to roll out EV infrastructure at scale and deliver a smooth transition to EV. We hope that these will be included in the government’s upcoming Transport Decarbonisation Plan.
1. Stimulate supply of EVs in the UK
The UK must ramp up the supply of EVs by 2030 and close the price gap with ICE vehicles. EV purchase grants are helping, but there has been a recent £500 cut to this subsidy (on top of previous cuts) – bringing the value down to £2,500 per vehicle (under the reduced vehicle value of £35,000).
While such incentives are a valuable interim measure, there’s a need for longer term action to encourage sustainable EV market growth and competition. This will stimulate vehicle supply and reduce purchase costs as production increases. Through our membership of EV 100 we’re calling for a Zero Emission Vehicle (ZEV) mandate, which requires auto manufacturers to ensure an annually increasing percentage of zero-emission vehicle sales, or purchase credits from other manufacturers with a surplus.
The ZEV Mandate was first introduced in California in the 1990s and has been replicated in other US States and Canadian provinces, as well as China. It is designed to match EV supply with increasing demand and drive down prices.
The ZEV is a revenue neutral policy that can unlock market competition and increase investment confidence in UK EV manufacturing. Ultimately, it would enable government to divert vehicle purchase grant funding to support the roll-out of critical charging infrastructure, while also encouraging skilled jobs and economic growth.
2. Ensure reliable vehicle charge points are available to everyone
Charging is another barrier to the mass uptake of EV, particularly the availability of public charge points, which aren’t just necessary for people without driveways. They’re also important for commercial vehicles. For example, around 70% of our British Gas EV fleet relies on both public and workplace charging, which is the same for many other UK fleet drivers.
Our new EV survey shows that 46% of businesses polled plan to install charging points on their premises to facilitate the uptake of EVs across the next twelve months, although more than a third (37%) have already installed this infrastructure. The research also revealed that three in ten (30%) firms have already invested in on-site technology capable of generating the energy to charge their fleet of EVs, such as solar panels, while almost half (48%) plan to do this in the future.
Your business can get up to £14,000 of government funding through the Office for Low Emission Vehicles’ (OLEV) Workplace Charging Scheme (WCS). As an authorised supplier, we can provide vouchers for £350 per socket (up to a maximum of 40 sockets) and support you with the simple online application process.
Government funding for charging must continue. Critically, we must have more charge points in public places, such as car parks and supermarkets, as well as along motorways and strategic roads to support long-distance journeys and relieve ‘range anxiety’. These facilities must be easy to find and user-friendly, particularly in terms of ease of payment.
We also need faster charging and welcome new funding for rapid charging hubs, which will go some way towards developing this vital resource.
We are hopeful that additional temporary capital expenditure reliefs, such as the super deduction tax break and new 50% First-Year Allowance (FYA), will help unlock investment in EV charging in the short term.
3. Ensure we have a flexible energy system to deliver affordable renewable power for EVs
It’s essential to have agile energy flexibility mechanisms to ensure there is enough electricity at the right price in the right places to meet EV needs affordably.
Without the ability to move and shift energy demand, more expensive network upgrades will be needed, and power costs will be higher. This relies on developing highly responsive national and local flexibility markets to enable assets of all sizes to participate, while accommodating increasing volumes of renewables onto the grid. Our landmark Cornwall Local Energy Market project demonstrates what’s possible and points the way forward on local energy flexibility.
EVs should be able to contribute to the resilience of our electricity system. This will be enabled by smart chargers, V2G, wider access to system data, demand side response and local flexibility markets at a consumer and business level. To this end, we are close to agreeing a trial which will see 100 EVs take part in a vehicle 2 grid study in the UK.
It is encouraging that the government’s energy white paper includes flexibility as a key enabler for the future of the energy grid. However, now is the time to make firm commitments on when real change will happen.
In partnership with Vauxhall, we’re leading the way by integrating time-of-use renewable energy tariffs into charger installations, including ‘free green miles’ credit. We’ve also launched a fleet smart charging management app that makes reimbursement easy and features tariff optimisation. This enables drivers to charge when power prices are lowest from any standard charge point.
Unlocking the big EV opportunity
As early adopters of EV – having already clocked up 1.75 million electric miles across our fleet – we know that electrification will bring new and exciting opportunities to businesses and individuals across the UK, while supporting the UK in meeting its net zero emissions target.
With the right policy framework, the EV industry can continue its productive partnership with government – putting EV in the fast lane to cleaner transport and net zero. This will also support economic recovery by creating skilled green jobs and reducing the long-term costs of energy and transport.
Here to support your complete EV journey
British Gas makes electric vehicle charging easy for all business customers – whatever your requirements. We provide a complete whole life service – from planning – to delivery and in-life operation and aftercare.