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Fuelling EV growth

Professor Nigel Berkeley, director of the Research Centre is Sustainable Regeneration department of Coventry University outlines some key throughts in how electric vehicles can jump from the niche and into the mass market

 

Despite encouraging signs in 2012, demand for EVs in the UK remains stubbornly sluggish despite a raft of policies and programs designed to promote their uptake. The government has introduced supply-side initiatives, such as demonstrator trials, deployment of charging infrastructure and investment in R&D, yet the major stumbling block remains consumer demand. Attempts to stimulate this much-needed demand include the plug-in car grant, offering up to £5,000 off the up-front purchase cost; exemption from annual circulation and company car tax schemes; and in London, exemption from congestion charging. However, to date the effect of these incentives has been disappointing. Although take up of the plug-in grant increased by 20% in the first half of 2012, the overall total of 1,700 claims made by June 2012 represents a fraction of the potential figure given the £300 million budget to 2015.

Barriers to demand are numerous. Price, in respect of the upfront purchase cost, remains the major obstacle, alongside issues such as range anxiety, battery life, charging infrastructure, vehicle performance and a comparative lack of choice. Generally, the public’s perception of EVs remains one of conservative caution, a situation not aided by the realization that such vehicles are only as environmentally friendly as the production techniques and power generation of electricity used to fuel them.

Whilst such a lack of demand is playing a key role in ensuring that producers are understandably reluctant to fully invest in the wider manufacture and roll-out of EVs, this situation is further reinforced by continuous improvements in the performance and efficiency of IC engines. And while many manufacturers are developing a wide range of suitable technologies, there is a natural tendency to wait for the market to mature before fully committing more substantial resources. 

Three factors
So what more can be done to stimulate demand? Industry analysts and experts agree that there is a need for a greater political drive to push the demand for low carbon vehicles. There are three factors that need to be considered, and taken together, these factors can form part of a holistic and sustainable longer-term solution:

The first is a more holistic incentive package. A logical short-term solution is to increase subsidies to incentivize uptake. Whilst high levels of subsidy are neither sustainable nor desirable both politically and economically, in the short term they can help significantly, particularly if delivered in the right way and the right mix. The Norwegian government typifies the political desire required, introducing a package of ten incentives (guaranteed until 2018), that includes free public parking; exemption from toll-road and congestion charges; access to bus/car pool lanes; discounted annual road tax; free public EV charging; exemption from VAT and car purchase tax and a 50% discount on company car tax; but interestingly no direct purchase grant. Yet this mix of subsidies, alongside the installation of 3,500 charging stations, has worked to stimulate demand, significantly reducing the life-cost of EVs in a country where petrol costs are amongst the highest in the world. Over 5,000 EV’s are now registered in Norway, the highest take-up per capita in the world.

An alternative approach with this regard is to disincentivise conventional car use through penalties, an option than can generate revenue to offset subsidy costs, but can also be damaging to both the car market and the automotive industry. France operates a ‘feebate’ (Bonus-Malus) scheme that levies a purchase fee on vehicles exceeding 160g/km of CO2, but at the same time offering a rebate to for vehicles with emissions less than 130g/km of CO2. The effect of the scheme has been to dramatically increase the number of lower polluting vehicles on the road, but this has been so successful it has cost the government some €300m.

The second factor to take into consideration is better information and education. Also key to stimulating demand for EVs is consumer perception in terms of range, capacity, performance and recharging. In part, EVs suffer by comparison with their counterparts of yesteryear, cars that arrived amid much fanfare but quickly disappeared. Moreover, whilst low carbon vehicle technologies might be new, the automobile is not. People are perhaps not wedded to petrol as a fuel source, but they’re more taken with personal mobility, style and comfort that modern motoring affords. Education and myth busting surrounding EVs is therefore important and must be accompanied by efforts to ensure standards and norms are quickly adopted. The installation of sufficient charging points is also crucial. EV trials in the UK have found that the presence of charging points is more important than their actual use. This suggests that commitment to further developing the charging network will help increase consumer confidence.

Issues of range anxiety and load capacity are only relevant for certain types of journeys and motorists. EV trials highlighted that, in line with the national average, the majority of journeys undertaken are less than 40km (well below the maximum distance achievable on a full charge) and by the driver travelling alone. Most trial drivers expressed satisfaction and recommended EVs as ideal vehicles for short journeys. It is crucial that findings from vehicle trials are fully disseminated by government and that the suitability of EVs to meet certain journey requirements is better promoted.

The third and final factor centers upon flexibility of ownership and integrated journeys. Linked to the latter, perhaps what is ultimately required is a change of mindset about how we engage in personal transportation. After over a century of private motoring, established patterns of travel, vehicle ownership and vehicle use are changing. Schemes abound in cities and rural areas promoting journey specific car hire through community car clubs could become crucial, providing vehicles on a pay-as-you-drive basis. Such schemes provide a natural opportunity to showcase and integrate EVs into the wider fleet and can offer significant savings to drivers. Evidence suggests that a growing number of car clubs in the UK are adding EVs to their fleets, although upfront purchase costs remain a significant barrier. Support from government in terms of subsidies can clearly help this process going forward, especially given the fact that the lack of uptake of the plug-in car grant in respect of the budget available. Manufacturers can also help either in providing vehicles to community car clubs or in launching their own initiatives. Peugeot, for example, operates its own car club Mu, offering its full fleet choice for hire, including its electric vehicle option, the Ion. At the same time the wider concept of vehicle hiring should be promoted and encouraged. Ultimately EVs have the potential to provide an adequate solution for most drivers’ daily needs alongside the facility to hire an IC engine vehicle for irregular trips beyond the range/capacity of the EV.

A more sustainable solution is to invest in smarter, more integrated private and public transport networks enabling EV drivers to effortlessly switch between transport modes, thus making longer journeys more viable and practical. As well as pushing the infrastructure to make this happen, information and education is a priority to convince drivers that private/public transport integration can work effectively. Given that the desire for personal mobility, freedom and ownership remains strong, especially amongst older generations, this shift in mindset will not happen overnight but is, along with the other solutions presented here, part of a package that given the necessary will and push from government could have the desired effect.

 

13 September 2012



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