EVs need to be easier.

The market for Electric Vehicles is here. The ability to supply them needs government intervention. I am assuming we can all accept greener cars are a good thing, so I am talking about the issue we need to address is meeting demand, making them easy to own and investing to ensure the UK gets a share in this future market.

I won’t go into the whole 'are they really as green as they purport' argument. Or my personal favourite, 'battery charging is only the interim step until we can all pop a hydrogen cell under the bonnet.' This is about investing in what is available now before it is too late.

Every conversation I have with friends and colleagues about cars quickly moves to their next choice an Electric Vehicle (EV), despite January 2023 bringing challenging news for greener cars.

The month’s bad EV vibe started during a slow news timeline leaving every corner of the popular press castigating the shortage of charging points. From Jeremy Vine’s shows to the Daily Mail, we learned the horror stories of how hard it was to find a charging point. Long queues at motorway services and cars running out of power all adds up to long journeys becoming, well, even longer.

As the month progressed we started to see green shoots of hope for the category, albeit hidden in the devastating news that the UK is producing cars at its lowest level since 1956. We found out EVs are a large share of what is being made. With supply chain issues including the global shortage of semiconductor chips blamed as the cause, manufacturers are assigning precious production capacity to EV cars.

The EV market continues to grow, almost a third of new cars produced in the UK are fully electric or hybrid. There couldn’t be better evidence that UK consumers are ready to move to green transit.

Car Wow market insight reinforces this. As one of the UK’s fastest growing online car vendors, their data shows that the number of people interested in EVs continues to increase. Since peaking in the last quarter of 2021 with almost 1 in 3 enquiries being for an electric-powered car, the level of interest has been steady for the last four quarters at 1 in 5 enquiries.

Nothing reinforces demand growth more than the market leader’s performance. Tesla is currently seeing orders at almost twice the rate they can make them at. It is clearly a wake up call for Elon Musk's team as BMW, Mercedes and Toyota accelerate their ranges and production to meet Tesla’s unmet demand.

To turn around Tesla’s now infamous poor shareholder performance of the last 12 months, they are investing US$3.6 billion in production near an existing production site in Nevada, USA to make more batteries and a new SUV to meet their demand challenge.

Let’s pause and recap. There is more demand for EVs and Hybrids than can be met, keeping prices high. Owning them isn’t the best experience for consumers thanks to fewer chargers than required. Despite all of this, manufacturers are investing to make more of them.

2023 will be seen as the EV inflection point

If demand isn’t met and they don’t become easier to own, the move to greener cars could stall and we all know the impact of that on our environment.

The first culprit must be the planning system. I know planning is the frequent whipping boy for all business ills. However, with a third of car enquires and actual cars rolling off the production line (as we used to say in the seventies), why aren’t charging points mandatory for all new homes and high density apartment blocks? The same for the places we take our cars to, like work, shopping and service stations.

Secondly, the government confirmed last week that it has worked “at pace” with the Chinese-owned British Steel to establish a solution to ensure the company’s long term future. A solution in the shape of a ￡300m donation of public money. Oh, and an identical package of funding for Indian-owned, Tata Steel, the biggest steelmaker in Britain. Yet, the collapsed UK battery company Britishvolt and its plans to construct a large plant in northern England received little more than promises if the firm could do all the heavy lifting itself.

It’s exciting to see an Australian firm is in talks to resurrect Britishvolts plans, but the big question remains, why is the government subsidising old dirty industries like steel to the expense of giving a leg up to the next generation industry? It has to be better to create a UK champion for the EV supply chain.

Finally, the UK and EU must develop a joint response to the USA’s Inflation Reduction Act (IRA).

The IRA is $369bn of subsidies for green technologies aimed at luring inward investment to the US. For example, the new Act features a US$7,500 subsidy for purchases of EVs but is restricted to greener cars substantially made and assembled in North America. Where would you invest to build EVs in the US where your consumers can access subsidies like that, or in the UK where your consumers can’t even access a charger?

The market for Electric Vehicles is here. The ability of the UK to supply them is not.