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  1. Analysis
March 3, 2020

The new EV target needs joined-up thinking and a clear direction of travel

By Asena Degirmenci

On 4 February, UK Prime Minister Boris Johnson announced plans to bring forward the ban on petrol and diesel cars by 15 years to 2035. Ragi Singh, partner and head of the electric vehicle group at international law firm Gowling WLG, reviews the ban.

Due to the environment being high on everyone’s agenda, the 2035 target is welcome; however the government needs a clear roadmap to how the industry will get there.

This will be a challenging target to meet, and there needs to be much more joined-up thinking in policy, and a clear direction of travel. As Andy Palmer of Aston Martin noted, if you’re doing a ‘moonshot’ you need NASA to get there. At the moment we do not have that in terms of institutions and policies. In fact, government policy is, at the moment, pretty disjointed. Parts of government have been encouraging the nation to go electric, while the Treasury has been cutting – quite prematurely – subsidies for EVs. The latter has come at a time when countries like Germany are increasing such support.

2020 is essentially ‘year zero’ for EV take-up in Europe. Tough new European emissions regulations mean that carmakers will start pushing EVs in a big way, as they will get a ‘super credit’ for every EV they sell in terms of calculating their overall fleet emission level.

But while EVs are cheap to run, up-front costs remain high. As battery costs and range improve, we should expect there to be a tipping point in the early to mid-2020s when EV take-up will really take off. Cutting subsidies prematurely will not aid this process.

More broadly, the UK is lagging in terms of superfast charging infrastructure, and we need to learn lessons from the likes of Norway, which has gone electric in a big way. Around 50% of new car sales in Norway are EVs, and the country has had a clear and consistent set of policies to make this happen. That includes tax breaks for EVs and support to make them usable in everyday life. The charging infrastructure is better and EV drivers can often drive in bus lanes and get reduced-cost parking and ferries to help their journeys. It is this holistic, joined-up approach that we need here if 2035 is going to work.

Industrial Strategy

More broadly, the UK needs an industrial strategy to help manufacturers and the supply chain shift over, with support for workers to retrain and gain the needed skill set. The first pressing need is for a gigafactory in the UK to make batteries at scale and very cheaply, in order to anchor EV production in the UK. The UK is currently lagging behind in this aspect; there is big investment going into various European countries, while the UK has only limited battery production capability.

Brexit also plays a part here. While the UK is participating in the EU’s emissions reduction programme this year, it is not clear what this will look like beyond 2020. Without a similar approach in the UK, car firms will not have an incentive to sell EVs into the UK as the cars will not count towards their fleet emission averages. That could see them switch EV sales to EU countries. Some sort of coordination with the EU will be required going forward to ensure success.

Ultimately, it would help all industries, not just the car industry, if a roadmap was published by the government – as the European Commission has done – which sets out what the Government intends to do and by when.

by Ragi Singh

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