Fix our woeful rollout of EV charging to rescue our car industry

Times

20 hours ago

Cyclists can drive motorists round the bend. Small wonder then that car bosses were peeved when Rachel Reeves gave them £400 million to build electric vehicle chargers in last week's spending review, compared to the £616 million grant to maintain cycle lanes.
To be fair, once you add in benefits across other ongoing government schemes, a total of £1.4 billion has been earmarked to support uptake of zero-emission vehicles. Not that this stopped the car industry complaining.
Senior figures in the industry were quick to demand 'more substantive measures to incentivise private consumer demand' if our EV targets are to be met. The obvious complaint is that a shortage of subsidies is holding back motorists' full-throttle embrace of electric vehicles.
Yes, Britain's car industry is in the grip of a net-zero-infused crisis. Production is languishing at 70-year lows — with the exception of the Covid paralysis in 2020 — and the blame has been placed squarely at EV production quotas.
So what's the answer? How about a return to lavish incentives to jumpstart demand, as the likes of Ford and Nissan have advocated? The government has resisted thus far — and rightly so.
There has been much debate over the decision to outlaw the sale of most new petrol or diesel-powered cars at the end of the decade. Boris Johnson introduced the 2030 ban; Rishi Sunak pushed it back to 2035; Sir Keir Starmer has dragged it forward to 2030 again.
But the time for flip-flopping is over. Britain has charted its course for EVs. Now we must stick to it.
Achieving this goal — five years ahead of the EU, we should remember — rightly requires carrots and sticks.
In terms of carrots, the primary incentive is that workers buying a company car benefit from tax incentives through a salary-sacrifice scheme that is so generous, it accounts for the lion's share of new EV registrations.
As for sticks, supply is being forced up by the government's controversial Zero Emission Vehicle (ZEV) mandate. Under this, car manufacturers must sell a certain percentage of EVs each year. This started at 22 per cent in 2024, and will be 28 per cent this year, ratcheting up to 80 per cent in 2030 and 100 per cent by 2035. Manufacturers will be allowed to sell new hybrid vehicles from 2030-35.
Until recently, failing to hit the quota would have resulted in carmakers being slapped with a £15,000-per-car penalty. They escaped these fines last year by discounting heavily to stimulate demand, costing them an estimated £4 billion. Some might argue that the scheme is working perfectly, then.
Nevertheless, Starmer has now agreed to reduce the per-car penalty to £12,000, alongside other flexible measures that could mean the fines are reduced further or negated completely.
The introduction of grants to subsidise new EVs beyond company car schemes might, on the face of it, make sense, however. The No 1 barrier to purchasing an EV is that they are more expensive than petrol or diesel-powered alternatives, according to polling by YouGov from last August.
Crucially, though, we may not be so far from parity. An EV was 51 per cent costlier than a petrol or diesel equivalent in 2018; this fell to 18 per cent in 2024, according to analysis by JATO Dynamics.
That gap could soon disappear as a tidal wave of cheaper Chinese EVs floods the UK market. We will need to park the geopolitics of this, but it's hard to see how this isn't good for consumers from a purely financial perspective.
Which brings us to what we should be concentrating on: charging points.
That same YouGov poll — in which, by the way, 49 per cent of respondents said they would never buy an EV — revealed that the second-biggest barrier to going electric was a 'lack of charging infrastructure'.
Yes, there are roughly 80,000 EV chargers in the UK, but the pace at which they are being installed is slowing. The compound growth rate between 2021 and 2024 was 37.5 per cent; in the first five months of this year, the number has increased by only 10 per cent.
The slowdown counted its first casualty last week. Pod Point, which listed on the London Stock Exchange in 2021 at a £350 million valuation, was rescued by French energy firm EDF in a deal worth little more than £10 million.
The £400 million that Reeves has set aside in the Comprehensive Spending Review for charging is an important first step. But money alone is not the answer.
State aid might be best reserved for funding chargers in locations where the operation is wholly uneconomic.
Yet talk to those in the EV charging industry and they will tell you that receiving timely planning permission and access to the electricity grid capacity are as important, if not more important than taxpayer handouts.
One senior executive recently recounted the tale of a company behind a prospective charging site near Gatwick airport, which was told by officials that it would not be hooked up to the grid until 2037. 'We don't want grants — we want certainty,' said another.
Then there is the inverse relationship between wealth and the cost of running an EV. An estimated 40 per cent of Britons live in a home without off-street parking, forcing them to charge their car at public chargers, which attract VAT at a rate of 20 per cent. Those with off-street parking, likely to be better off, can charge using their home supply, upon which VAT is levied at 5 per cent. For a Labour government seeking to champion 'working people', this discrepancy seems bonkers — but the Treasury may not see it that way.
Crucial to driving the car industry out of its current malaise is a renewed focus on charging. Otherwise, the danger is that drivers will be running out of power left, right and centre.
Which might anger them more than cyclists.
Oliver Shah is away