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Carbon Neutral Economy

In a bid to become a ‘carbon neutral economy’ by 2030, we must ask ourselves:

Is the UK going to be ready for a non combustion engine, new car market in just 10 years?

Despite all our views and opinions, the UK and its Automotive Industry are set to undergo a radical set of changes; the banning of selling new petrol and diesel cars by 2030.

The Government has stated that the ban on the sale of new combustion engine cars will be banned by 2030, an advance on their previous promise of 2040; bringing them in-line with France and progressing ahead of Germany in the bid to radically reduce the use of fossil fuels in the UK. However, the Society of Motor Manufacturers and Traders reported that less than 7% of all new cars bought in the last month were electric, which may be due to a number of factors: such as the lack of infrastructure to support electric vehicles, the price of said vehicles and perhaps most importantly, their range.

In order to captivate the petrolhead to move over to the electric market, we have seen the likes of the exciting Porsche Taycan from VW Group and the Polestar further afield, from ZGH (who also own Volvo). However, the mileage of all electric cars is more in question than anything. According to EDF Energy, the £185,000 Tesla Roadster is capable of over 600 miles, which seems more than sufficient for the average daily 2.6 mile school journey. However, not all of us have access to super fast-charging electric cars and, the further we delve down into the electric car market, the lower these numbers become. Nimblefins and Newmotion claim that the average range of an electric car is between 188-193 miles. This is perfectly fine for inner-city travel where faster chargers (7-22KW) are generally more available, but in less urbanised areas, owners only have the option to (slowly) charge their car at home or at supermarkets for example, and for long distance journeys can only charge at a few service stops which clearly displays an infrastructure problem of both fast chargers and chargers nationwide. This is shown by London having the highest number of charging devices per 100,000 people and Yorkshire having the lowest. The regional wage is higher in London than Yorkshire; meaning that Electric Vehicles or EV’s are more price elastic when it comes to the Yorkshire population, meaning that the Government will have to create incentives to truly lower the use of fossil fuels in the UK as long as EV cars stay priced as they are.

In comparison to combustion engined cars, EV’s are expensive. Even at the lowest price point, a second hand EV is around £10,000 and a new Nissan Leaf starts from £23,00. This creates a clear price disparity between used combustion engine cars and EVs which may discourage possible clientele. However, this is partially due to the fact that a lower number of produced EV’s means that the market allows for higher prices in comparison to combustion engines; of which there are an excess amount. This is also due to R&D and new fixed costs (battery plants) by each manufacturer which are factored into the RRP. As a result, as production increases, the cost of both used and new EV’s should decrease to the point where, by 2030, they are much more affordable and in higher supply.

In our industry, we believe that the aftersales sector in particular will thrive. Due to the phasing out of combustion engine cars, manufacturers will inevitably need to service and maintain cars bought before the deadline. This means that technicians will be required to knowledge of both electric and combustion vehicles; which also begs the question; will we need more technicians to be cope with the demand of new and old under one roof.

Apart from Tesla, who have the ability to fully supercharge or charge with 250KW within an hour, all other electric cars can only take up to a 60KW in charge and take around 35 minutes to charge to 100 miles; comparatively much slower than Tesla’s 20 minutes. The best way to accommodate a carbon neutral economy is to increase the number of fast charging stations nationwide, rather than just in major cities and slower charges in less urban or populated areas.

In 2019, Accenture projected that by 2025 there could be one million electric cars in the UK, rising to 11m by 2040 and the advancement of the engine ban to 2030 could further increase the number of electric cars. The UK has already made significant infrastructural progress: in total, there are 35,000 public chargers spread over 12,000 locations within the UK. Add this onto the introduction and eventual roll out of Hydrogen-powered cars and the number of private overnight-home chargers, we can be argue that the UK is ramping up the infrastructure needed to support the transition to a carbon-neutral economy.

Author: Vik