Electric Vehicles: New Policy Approach Needed to Spark Demand
- Published on Monday, 25 February 2013 14:32
- Written by Nigel Berkeley
Encouraging motorists to opt for a low carbon vehicle in place of their petrol/diesel cars is proving to be a difficult challenge, but it is a challenge that the government must address in order to create a sustainable market for the future and help the UK meet its carbon reduction targets
This month the Department for Transport announced an additional £37 million of funding for the installation of thousands more electric vehicle charging points in the UK. This is the latest in a series of policy announcements which have sought to boost the UK automotive industry to develop and rollout the necessary technology and supporting infrastructure. However, with the DfT declaring that to date 3,000 charging points have been installed as part of the plugged-in-places scheme and an estimated 5,000 more charging points having been installed by providers operating outside this scheme there are now many more charging points than there are electric vehicles (EVs).
The latest data from the plug-in grant scheme - which offers a £5,000 subsidy for consumers purchasing an EV - shows that to date just over 3,000 electric cars have been registered in the UK. This is a market share of just 0.1%. The infrastructure and technology may already be in place but as these figures show this is just part of the solution. What the government needs to really focus on now is how to increase demand.
There are a number of factors that may be stopping people from buying an EV. Arguably the most significant barrier is cost. Even taking into account the £5,000 grant, electric vehicles average at over £20,000 for a car which is basically classed as a 'supermini'. This cost factor then limits the potential market to either those who are rich enough to afford an EV or those who are extremely environmentally conscious. Beyond pricing issues there is also a lack of confidence with EVs both in terms of technology and the performance; particularly over the lifespan of the battery which is the single item on the vehicle which makes buying the car so expensive.
In my view as well, awareness amongst consumers of the financial support available through government schemes like the plug-in car grant is limited. The grant is well intentioned, but has been poorly advertised and promoted, and in my opinion was launched before the market was really ready. The government's approach was to go straight for the mass market, presumably in recognition of the speed in which we need to change mindsets from petrol to electric powered vehicles. However, when the grant scheme was launched there was very little awareness of what EVs could and couldn't do, and there was a very restricted choice of vehicles for those consumers who were thinking of buying.
There is nothing that the government can do about reducing the upfront purchase costs at this stage; this will come once EVs are well established in the mass market. I therefore believe that policy and support should look beyond the private mass market to focus on niche, commercial opportunities.
For me, there are two ideal opportunities for taking the first steps in developing a mass market demand for electric vehicles. Firstly, using subsidies to encourage use of EVs in car share or pay-as-you-drive schemes. Secondly, and potentially the most obvious way to achieve short-term impact, is to use subsidies to promote the use of EVs in public and private sector fleets. As an example at a micro-level, I am currently part of a consortium which is testing the economic viability of deploying EVs in rural GP surgeries. Disseminating intelligence from this and similar demonstrator projects in both urban and rural settings is vital given concerns about performance, practicality and suitability of EVs. Ultimately this will help consumers make informed choices.