Lloyds Banking Group has released its Future of Transport report, which detailed the successes and challenges in the UK electric vehicle (EV) landscape.
The report recognised the progress made in the EV sector over the last year, citing that October 2023 saw the 50,000th charging point opened in Weston-Super-Mare, as well as January marking the millionth fully electric car on UK roads.
Nevertheless, the transportation sector remains the largest emitter of UK greenhouse gases. As highlighted in the report, over a quarter of all UK emissions came from transport in 2021 alone, and the number grew in 2022, according to figures from The Office of National Statistics.
The facts and figures
One of the first topics raised was the prime minister’s decision to delay the zero-emission vehicle (ZEV) mandate, which will ban the sale of petrol and diesel cars from 2030 to 2035.
Lloyds’ research indicated that the delay has not had a net negative impact on consumers’ desire for EVs.
Approximately a third of the 1,214 private drivers surveyed said they were now more likely to switch to electric, while 20% said they were less likely, and just over half claimed they were not changing their plans.
This delay, however, has not been the only barrier to electrification. Almost 60% of participants cited the expense of an EV as the main factor preventing them from switching.
More than half mentioned the availability of charging points as a major factor, with just over 40% pointing towards logistics and the cost of installing charging infrastructure at home.
This concern over a lack of charging infrastructure is not unprecedented, considering the government’s target of at least six rapid or ultra-rapid chargepoints installed at every motorway service area in England by the close of 2023 was missed by 61%.
Research by the RAC revealed that just 46 of the 119 motorway services it reviewed on Zapmap have a target number of EV (electric vehicle) chargers above 50kW.
Fleets remain dominant in new EV registrations, as is reflected in the report; of the 100 UK fleet managers who took part in our survey, 86% said they had either maintained or increased the number of vehicles in their fleet over the past year – up 66% from the last survey.
However, Lloyds’ survey suggests fleet operators do not have sufficient support throughout their transition to electric.
According to the report, just 45% of those surveyed said they felt they had the information they needed to decide if EVs were the correct choice for their fleets and a third expect leasing providers to provide better information on switching.
Policy suggestions
Lloyds Group concluded by analysing the surveyed answers compiled in the report and identifying some policy suggestions for the government.
They include prioritising the rapid and fair rollout of charging infrastructure, including addressing the disparity that means that anyone using public charging points pays 20% VAT on electricity, compared with 5% for those charging at home.
This disparity, also known as the ‘pavement tax’, has been raised as an issue multiple times before, most recently in an open letter to the government from FairCharge and EV industry members ahead of the 2024 Spring Budget.
Lloyds also suggested that the government should remain committed to the essential incentives needed to encourage drivers to make the switch, including extending benefit-in-kind rates beyond 2028, as well as considering the future of EV maintenance and consumer information.
Finally, the group suggested the introduction of a national battery strategy to support the development of the UK battery manufacturing industry.