2023 Predictions for the UK EV Industry

By: Lauren Pamma , Programme Director of GFI Transport

2022 was an exceptional year for EV adoption in the UK, with a 38% annual growth in EV sales. This was accompanied by the growth of EV charging infrastructure. Since November 2022, we’ve seen a 33% increase in the number of EV charging points, with a 76% increase in ultra-rapid chargers across the UK. This growth was despite the challenges presented to the EV transition, most notably the energy price crisis.

Each year that passes brings more real world experience for the EV market and greater uptake across the country. Going into 2023, we’re optimistic about further acceleration of the EV rollout and the benefits this will bring to the transition to net zero.

This growth will be caused and accompanied by a series of trends in the market - here’s a short summary of what we are likely to see in the months ahead:

1. Growing the battery supply chain in the UK

The new lithium refinery plant in Teesside announced earlier this year marked a watershed moment for the UK’s battery supply chain markets - showing it is not just possible to build this supply chain in the UK, but that we can also bring economic benefits through protecting existing jobs, attracting new ones, and increasing private investment.

The UK will need to ramp up its current production of around 2GWh battery capacity per year to over 90GWh a year to maintain the car industry at its current size. Failure to invest now risks seeing other countries capture this once-in-a-generation opportunity to deliver a modern-day green industrial revolution. If the UK can harness this momentum, we will be well-positioned to lead the way on a sector that will underpin the future of road transport.

2023 presents an opportunity for the UK to capture the battery supply chain market and become a leading player on the global stage. Key to establishing this capability is building a world-leading, home-grown supply chain from raw material processing through to recycling through public and private sector collaboration, and we should be encouraging this kind of collaboration? in 2023.

In our report, Powering the Drive to Net Zero: Unlocking Public and Private Capital for the UK Battery Sector, we evaluate the solutions to unlock the scale of private capital needed for the sector to succeed.?

2. Growth of used EV market

Supply of used vehicles is set to rapidly increase going into next year. To ensure a healthy used vehicle market, we need to ensure that demand is increasing in line with supply.

To aid this, we need to give consumers confidence to acquire used EVs through solutions such as battery health certificates. In tandem, dealers will need to equip themselves with the knowledge and data to give buyers confidence at point of sale.?

Last month, as part of an Office for Zero Emissions Vehicles working group, we began an independent review of the used EV finance market. We launched a survey asking lenders about their EV lending policies and launched a consumer survey assessing attitudes to used EVs. We hope to understand whether lack of understanding and access to finance is holding the secondary market back. Stay tuned for the results of this research in the coming months.

3. Public sector investment into EV Infrastructure

Local Authorities are set to have a large injection of finance this year through the launch of the LEVI (Local Electric Vehicle Infrastructure) fund, which aims to support the roll-out of charging infrastructure across England.?

The fund will deliver significant charging infrastructure investment and deployment by:

• Encouraging local support for public off-street EV charging infrastructure.
• Utilising private sector investment and promoting sustainable business models
• Increasing consumer confidence in the EV transition, ensuring uptake across the country.

When public funding for charging infrastructure comes to an end, we will need to see private sector investment increase to continue to scale the EV transition. Our Guide to Electric Vehicle Infrastructure, in collaboration with BEAMA , helps to bridge the knowledge gap faced by stakeholders looking to finance charging infrastructure.

4. Growth of smart charging

Central to driving down costs is smart charging - a charging cycle of an EV that can be altered by external commands, such as controlling the time of charging dependent on when the demand of electricity is lower.?

According to Agile Streets, the UK’s first-ever trial of smart metered on-street EV chargers, drivers could save around ￡600 each year compared to traditional charging. In 2023, we anticipate that smart charging will become more important than ever before - to not only balance peak grid demand, but drive down prices.

The government’s Review of Electricity Market Arrangements (REMA) is a plan to restructure electricity markets to deliver a fully decarbonised and cost-effective power sector by 2035. This includes deployment of low-carbon technologies, increasing grid flexibility, and rewarding consumers with price signals to match the market conditions.The REMA consultation highlights changes to be made that can make electricity cheaper and greener for consumers.

Smart charging, alongside the results of the REMA, will hopefully see electricity prices fall next year.

5. Growth of peer to peer (P2P) charging?

As the rate of EV uptake increases, we could see a growth in P2P charging.?

In 2022, we saw a rise in apps like Co Charger and Zapmap which encourage shared charging by enabling users to share their private EV charging spots. This allows neighbours or people nearby who may not have off-street parking to access charge points without the upfront expense of installation;

Shared charging has huge benefits for an EV driver, including:

• An increased number of chargers available to everybody reduces the level of ‘charge anxiety’ for a potential buyer.
• Owners of charging spots may achieve faster payback on a home charging point and potentially turn a profit.

Though we still need more public charging points in the right locations, P2P charging is a way of driving up utilisation of existing infrastructure while keeping capital costs down, and we hope to see this increase as the year progresses.?

6. Accessibility

Accessibility will also remain a key area of focus for the industry, particularly charge point operators. Earlier this year, industry groups and other bodies, such as Motability Foundation , worked alongside the Government to publish specifications for the accessibility of charge points, to ensure that no one is left behind in the EV transition. This should create a step change in accessibility for chargers from next year.?