Electric vehicle uptake: clearing the road blocks

The UK Government’s targets for emission reduction put electric vehicles (EVs) at the heart of the strategy to reduce transport emissions, yet EV sales are struggling to achieve the growth needed to deliver the Government’s targets, so what is needed to make the transition a reality?

In our previous two articles in this series Madano has identified a growing gap in the UK between consideration of electric vehicles and actual purchase, and that there has been a recent decrease in pure-electric (non-hybrid) vehicle registrations despite a substantial increase in hybrid-electric vehicle registrations. Lower emissions, high torque, charging at home and silent operation ought to appeal to consumers, but in the year to end March 2018 pure EVs (excluding hybrids) accounted for less than 1% of new registrations. So how can uptake of EVs increase and what are the challenges to overcome?

Barriers to uptake: real or perceived?

Industry research consistently identifies recharging infrastructure, vehicle range, cost of ownership, availability of information and limited vehicle choice as the key to barriers to EV uptake[1]. Yet these barriers are eroding rapidly, without EV uptake rapidly accelerating. So why is that?

Firstly perception lags behind reality, requiring significant investment in communication to shift perception. Secondly, there’s reluctance to be the early adopter, requiring significant investment to promote trial and early uptake. Thirdly, systemic barriers – the hidden barriers to addressing the apparent barriers – require clear focus on wider stakeholder engagement.

Availability of information - room for improvement

So important to the UK Government is the provision of information on EVs that it directly supports the Go Ultra Low information service alongside a limited range of industry operators: Audi, Hyundai, Kia, Mercedes-Benz, Nissan, Toyota, Volkswagen, the Society of Motor Manufacturers & Traders (SMMT), and the Government’s own Office for Low Emission Vehicles (OLEV).

A recent study reported by the BBC into car dealers in 126 dealerships across 15 cities in Scandinavia and Iceland indicated the dealers perceived EVs as less profitable, lacked technical knowledge and believed that EVs took longer to sell[2]. There is anecdotal evidence the UK is similar.

It’s this alleged reluctance to promote EVs that has led some to argue there’s a key systemic barrier; that key industry players are holding back in the absence of a strong motivation to accelerate the change. With the huge cost of new technology and new model development, billions of dollars invested in conventional drive-trains, vast investment to persuade a hesitant market, and investors keen to harvest the return on sunk capital, why rush? Governments having to step in to accelerate EV development and EV uptake is not necessarily a good sign either; this wasn’t necessary to propel the smart phone in to every household.

Vehicle choice - wider than you might imagine

The choice of EVs has expanded significantly in recent years and is growing rapidly. A recent report by the SMMT[3] identified that there are now 8 fully-electric cars offered by SMMT members to the UK market. This excludes 4 offered by Tesla, which is not an SMMT member. In addition the SMMT identified over 20 plug-in hybrid-electric vehicles. Although clearly not as extensive a range as available with conventional engines, this range includes some of the best-selling models on the market. A senior executive from BMW has subsequently confirmed that all future BMW models will be available with an electric drive-train, and Jaguar has launched its first pure EV; the I-PACE.

Despite this, sales data suggests the range is failing to excite. That’s probably because there’s something reassuring about at technology that’s been refined over 100 years. There’s something tactile in the noise and feel of a conventional engine. And when new leasing pricing models have enabled wider ownership of premium brands – themselves some of the slowest to move into electrification - what’s the incentive to change?

Recharging infrastructure - better than you might think

Public charging connections for UK EVs number about 1 per 8 electric vehicles. In comparison conventional fuel pumps number about 1 per 400 conventionally-fuelled vehicles.[4] While conventional fuel stations dispense energy at a substantially faster rate than electric chargers, the EV recharging network is increasingly able to service demand. And in addition of course, it’s really home-charging that is likely to deliver the bulk of EV recharging, and the domestic grid offers huge untapped potential to supply EVs, although not without immense technical and engineering challenges.

The key issue with home recharging is that around 40% per cent of British households do not have access to off-street parking[5]. The Government’s new ‘Road to Zero’ strategy will help address building regulations to mandate external charge-points in new builds, add charging capability to new street lights, and trial wireless charging. Achieving this and extending charging to older domestic infrastructure will require better engagement between local authorities, householders, property owners and utilities.

Vehicle range - further than you probably need

EVs now have range capability vastly in excess of most consumers’ requirements, yet ‘range anxiety’ remains a concern for many potential EV adopters.

According to Go Ultra Low, two of the UK’s most popular fully-electric vehicles – the VW e-Golf and Nissan Leaf – have a range of 186 miles and 168 miles respectively. Yet according to the 2016 National Travel Survey the average trip made by a person in a household with a car was just 7.2 miles, and even in the peak mileage age group (aged 50-59) average daily mileage was just 19 miles. EVs therefore are particularly suitable for urban locations.

Industry claims risk being undermined by inconsistent measures and unclear messages. The e-Golf and Leaf ranges are measured using two different cycles which are not directly comparable. Tested-range will differ from real-world range due to variations in driving style and conditions, including vehicle load and operating temperature. While vehicles tend to be purchased for the maximum journey distance likely, drivers will tend to take a break, and the range capability between stops is key to meeting most driving requirements.

Cost of ownership - less than you might expect

The purchase and lease cost of EVs has declined to levels within 10-20% of comparable conventional vehicles, and the lifecycle total cost of ownership is less for high-mileage EVs than for conventional vehicles, yet the perception and threat of higher cost lingers.

Where direct comparison is enabled by similar models with alternative drivetrains, EVs are comparing favourably. The comparable recommended on-the-road price of a VW Golf in June 2018, after applying the Plug-in Car Grant (PGC), was lower for a fully-electric model than for a comparable petrol hybrid (Figure 1), although conventional diesel and petrol models were available more cheaply (perhaps being discounted). With hybrid sales rapidly increasing, this suggests it may not be the actual price that’s the barrier; it may be the perceived price combined with reluctance to be the early adopter.

Figure 1: VW Golf Recommended On The Road Retail Prices

Extending cost comparison beyond cost-of-purchase to include the total cost of ownership indicates fully-electric vehicles in the UK cost around 10% to 20% less than for comparable vehicles due to the lower cost of energy and depreciation[6] (Figure 2).

Figure 2: Total Annual Cost Of Vehicle Ownership

Cost comparison for EVs has been aided by relatively low energy prices, including the availability in some areas of free charging. However, fuel duty currently accounts for c.£28bn of UK tax income (3.9% of total receipts)[7]. If petrol and diesel sales are replaced by electric charging, it seems likely the Government will seek to cover the income gap with either road pricing or increased duty on electricity for vehicle charging.

Clearing the road blocks

Addressing these barriers to EV adoption presents a number of communication challenges for the key players in the sector:

Government:

  • Providing relevant but impartial information and support that’s consistent with competition law and state-funding rules.
  • Communicating the longevity of fiscal incentives and taxation regimes to underpin consumer and business confidence in EV acquisition and leasing.
  • Providing clarity of policy, and building long term support and confidence to the sector.

Car companies:

  • Building awareness, understanding, trust, favourability and above all passion among consumers and business buyers.
  • Providing information on EVs in accessible, user-friendly, technologically relevant ways, and training and engaging dealership staff to sell EVs alongside conventional models.
  • Communicating the real range capability of vehicles, not just the projected range, in meaningful ways that build consumer trust.
  • Communicating the true lifetime costs of EVs including realistic maintenance, servicing and parts-replacement costs.
  • With the charging suppliers, communicating the extent and availability of the recharging network, and the process for installing domestic recharging.
  • Communicating the extent of the recharging network and the process for installing domestic recharging in order to improve air quality.
  • Helping businesses and consumers navigate charging networks with different connection and charging capabilities.
  • Communicating charge-point availability and accessibility in real time though digital media directly to the driver in order to secure EV-owner usage and brand loyalty.
  • Communicating the domestic and on-road choices and services available to build network strength and consumer loyalty.
  • Communicating energy pricing and potential future pricing scenarios.
  • Align the interests and resources of the sector to deliver what needs to be an integrated interchangeable recharging system.

Suppliers to car companies:

  • Communicating the impact of new technologies, services and supply-chains on EV efficiency, optimisation and lifecycle costs.

Vehicle rental and leasing companies:

  • Communicating the expected range of vehicles in meaningful ways that build consumer trust to hire an EV.
  • Building understanding of the EV range and its benefits among consumers and business buyers, and clarifying options through the decision-making process.

Local authorities:

  • Communicating the extent of the recharging network and the process for installing domestic recharging in order to improve air quality.
  • Helping business and consumers navigate charging networks with different connection and charging capabilities.

Electricity and charging network suppliers:

  • Communicating charge-point availability and accessibility in real time though digital media directly to the driver in order to secure EV-owner usage and brand loyalty.
  • Communicating the domestic and on-road choices and services available to build network strength and consumer loyalty.
  • Communicating energy pricing and potential future pricing scenarios.

Business and domestic customers:

  • Developing engagement with company fleet drivers to build trial, use and appropriate operation of EVs.
  • Developing and communicating the company sustainability, emissions and fleet strategy, and developing staff and stakeholder engagement.
  • Understanding the growing range and available information, digesting this, and presenting it to consumers in an accessible form.

The transport sector as a whole:

  • Align the interests and resources of the sector to deliver what needs to be an integrated interchangeable recharging system.

Electric vehicles can transform our transport and air quality over the next 20 years but market uptake remains low. Addressing the key barriers to EV uptake has the attention of manufacturers, suppliers, infrastructure providers and policy makers, but now so much of the practical technology exists it also needs the attention of communicators. Capturing the enormous benefits potentially offered by electric vehicles will be enabled by the communicators who can clarify benefits, simplify choice, excite passion and make the change happen.


References

[1] European Automobile Manufacturers Association, 2018; European Joint Research Centre, 2017; UK Department for Transport, 2016.

[2] ‘Car dealer tactics stall electric car sales’, Matt McGrath, Environment correspondent, BBC.

24 May 2018. https://www.bbc.co.uk/news/sci...

[3] SMMT Sustainability Report, 2018

[4] Based on c.6,000 EV charging locations with nearly 17,000 charging connectors, including over 3,600 rapid connectors (Zap Map data) serving 142,000 plug-in light-duty vehicles, of which around 40,000 are pure-electric (DfT data), compared to 8,400 conventional fuel stations (Petroleum Retailers Association data) with approximately 67,000 pumps (assuming 8 pumps per station) serving a fleet of over 30 million vehicles.

[5] “43 per cent of British households do not have access to off-street parking, according to estimates by National Grid, operator of the country’s electricity system”. FT, 27/12/17. https://www.ft.com/content/b9c...

[6] Palmer, K, et al, 2018, Journal Applied Energy

[7] Institute for Fiscal Studies, 2016: Survey of the UK tax system, IFS Briefing Note BN09, T. Pope and T. Waters