If you ask the vast majority of car owners and prospective buyers, they will tell you that electric vehicles (EVs) are the future of the automotive industry.
People want and believe in a greener, cleaner, emissions-free future; however, as it stands today, EVs still only make up 1% of the total global car fleet. This figure suggests electric vehicles are not yet viewed as viable alternatives to petrol and diesel cars by the general public. If the UK is to achieve the targets set out in the Paris Agreement, then that perception needs to change. In this article we explore the barriers to EV normalisation, whether they are valid and what’s being done to tackle them.
Infrastructure and battery technology
In the UK, more needs to be done to increase the accessibility to charge points and other critical infrastructure – my colleague Nick Robinson explored this earlier in this series. It is undoubtedly the main barrier to increased EV adoption and key to breeding the range anxiety associated with electric vehicles. A recent survey in the UK found that 69% of participants are put off by the perceived lack of charging infrastructure and 57% of those directly cited battery range as a reason to not purchase an electric vehicle.1
The average EV has the ability to travel approximately 145 miles on a single charge. Considering the average daily commute is between 10 and 25 miles, one could argue that ‘range anxiety’ should only ever really come into question for those regularly undertaking long distance journeys. However, perception is much different to reality and until this perception is changed, EV sales in the UK will be stunted. To ‘normalise’ electric vehicles in the next decade and increase adoption to levels needed to meet the targets set out in the Paris Agreement, charging infrastructure has to become more readily available and battery technology has to get better.
Evidencing the opportunity
This is increasingly important as the consumer profile of EV-owners evolves. Previously dominated by those early adopters and technophile purchasers, more and more of the general public are starting to look at EVs as an increasingly viable alternative to fossil-fuel powered vehicles. One of the major reasons for this is simply seeing more electric vehicles on the road. A study undertaken as part of IEA’s global EV outlook found that of 2,000 participants, 49% of people said that seeing more electric vehicles on the road would be the biggest factor in changing their perception and increasing adoption.2
In the first article of this series, we mentioned Optimise Prime – an Ofgem-led project that seeks to limit the impacts of electrification of commercial vehicles on the power grid.3 Projects like this hold another significance though. Electrifying large fleets of commercial vehicles, such as taxis and mail delivery vans, provide the government with the ideal case study into how EVs can replace combustion engines. It is also advantageous to demonstrate this in industries that are heavily reliant on traveling well beyond the daily average commuting range of 10 to 25 miles.
Another barrier to EV growth remains cost. Electric vehicles are more expensive than their petrol or diesel counterparts. The biggest cost attributed to an electric vehicle is the battery. As the component parts are expensive and finite in supply, the construction cost of EV batteries remain high and this is reflected in the cost of the car itself. However, this technology is improving, and the cost is decreasing. In the last 10 years, battery costs have decreased by 85% and if that trend extends throughout the next decade there will eventually be parity in costs between EVs and fossil-fuel powered cars.4
There are a number of monetary benefits that come with owning an electric vehicle and while these may not yet offset the overall difference in cost between EVs and petrol and diesel vehicles, they do go some way to challenging the concern of cost as a barrier to adoption. Electricity is universally cheap and far less vulnerable to price fluctuation than traditional oil and gas fuels. The service and maintenance costs associated with an EV are also cheaper. An electric motor is much simpler in construction than an internal combustion engine (ICE)5 and needs less maintenance. Moreover, there is no need for oil or fluid changes as with an ICE vehicle – further reducing running costs. In the UK EVs are exempt from road tax and while this creates a longer-term challenge for the government, who will need to find ways to make up for lost revenue generated from road tax and fuel, it presents a further relief to the owner.
The Office for Low Emission Vehicles, which operates as part of the Department for Transport, already offer grants to consumers purchasing fully electric vehicles.6 This also applies to the installation of charge points in domestic properties. Moreover, new Vehicle-to-Grid (V2G) charging solutions actually allow EVs to sell excess electricity back to the grid during times of peak demand.7 In the UK, OVO Energy are currently spearheading a trial of their V2G charging technology, which allows consumers the chance to cover the full cost of charging their EV by selling excess energy back to the grid.8 A recent report found that a 7kW V2G charger could earn up to £436 per annum by providing services to the power network.9 When combined with the tax reliefs, available grants, and reduced operational costs, V2G solutions would help new owners recoup some of the additional investment required to purchase an electric vehicle.
A lack of choice
If the overall costs reduce, and adoption continues in an upward trend, then the electric vehicle also becomes more commercially viable for car manufacturers to build and sell. This will provide greater variety in model, style and specification of EVs and, in turn, becomes more inclusive of everyday consumer needs. Given 1 in 4 people said they want to see a wider range of EV model, the lack of choice remains a barrier to mass EV adoption. However, there is more choice in the EV market than consumers may perceive.
Today there are roughly 60 different models of electric, or hybrid, vehicle across 35 different suppliers. Some of the world’s leading brands such as Volkswagen, BMW and Mercedes-Benz have launched new electric models in the last 18 months. This portfolio, in comparison to that of petrol or diesel cars, appears limited. However, the options are much broader than consumers realise. A clear communications approach from government could address this concern. A greater promotion of electric vehicle options would also help counteract the negative press that hybrid models have garnered recently. EVs and hybrid models are often closely linked and, with suggestions that carbon dioxide emissions of hybrids are actually greater than petrol and diesel models, there is a risk that would be purchasers are further deterred from transitioning to electric.10 As global manufacturers announce further plans to launch 200 new electric vehicle models over the next 5 years, choice will be further eradicated as a barrier to mass EV adoption.
As discussed the vast majority of consumers want a greener future and, with the removal of the barriers mentioned so far, would transition to an electric vehicle. However, one of the critical elements to that greener future is how the battery is used beyond its natural life. IEA’s global EV outlook estimates that by 2030 some 100-120 GWh of electric vehicle batteries will need to be retired. To put into context, this is roughly the equivalent of current annual battery production globally. These batteries will not only need to be replaced but disposed of responsibly to ensure sustainability across the full life cycle. There are a number of ways this can be done. While a battery may no longer be fit to support the running of an electric vehicle it can be channelled for secondary use, such as storage for electricity network operations, electric utilities or even commercial and residential customers. This could help to offset the environmental impacts, emissions and cost required to support increased production of new batteries for electric vehicles.
With little experience to date in the recycling of EV batteries for future use, this practice could viably become an industry within itself. It would bring together the technical skills, expertise and knowledge of equipment manufacturers, utilities companies and specialists to develop a method of recycling that will be key to ensuring long term sustainability is achieved as the number of batteries in the market increase. Additionally, the recovery of critical materials that go into their construction could help reduce the demand for these raw materials and reduce the negative impacts caused by their mining and refining. The process for how EV batteries are disposed of, reused or recycled will need to be driven by government policy and regulation. It presents an opportunity to truly be sustainable as well as creating additional job opportunities; however, if not closely regulated it risks offsetting the benefits that shifting to electric vehicles provide.
An opportunity and a challenge
In 2019, electric vehicles in operation globally helped to avoid the consumption of almost 600,000 barrels of oil products per day. With a global fleet of just 1% of road vehicles, this shows the enormous impact and opportunity that shifting to electric vehicles presents both in the UK and overseas. Nevertheless, to the consumer, there remains a number of challenges and barriers that until addressed will prevent increased adoption. However, the direction of travel is clear, whether the concern is the lack of charging infrastructure, range, cost or choice, the industry is listening and reacting to what they hear.
As charging infrastructure becomes more readily available and battery technology improves the overall costs will come down. When the costs reduce, more automotive manufacturers will invest into the electric vehicle market increasing competition and choice for the consumer. When these variables combine mass EV adoption is expected to accelerate and the multiple barriers previously preventing consumers transitioning to electric will be removed. However, until that time the industry and government remain locked in a battle to convince consumers that the electric vehicle revolution is here and already upon us.
In the concluding article of the series, we analyse the role of ‘Big Tech’ in the EV market and what the future may hold.
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