Overlay
Sector trends

Charging ahead or lagging behind?

The transition to electric vehicles is motoring ahead at pace, but is the infrastructure required to support these new vehicles keeping up? The Future Mobility Group discusses.

 By our reckoning, there are 25 entirely new BEVs due out this year in the UK alone. That doesn’t include derivatives or replacements of existing electric cars, high-performance supercars and the like, but entirely new cars that can be used in the real world.

The shift to electric is inexorable. And it’s not just cars that are seeing the shift: commercial vehicles are increasingly being launched with an electric variant, with around 10 newly added models on sale this year, driving choice and availability in an underserved market.

Range anxiety versus charging anxiety

Despite this growth, there is a view that early adopters of electric vehicles (EVs) are pioneers battling against the odds. Often this is due to concerns about the mileage range of vehicles and the infrastructure that supports them – so-called range anxiety. Our contention is that this is less about range anxiety than it is about charging anxiety – the fear that we will not be able to find somewhere to recharge our EV. Indeed, according to a recent survey by Cenex, a research organisation and consultancy specialising in low-emission transport, 33% of people would like an EV but won’t buy one until there are more places to charge it.

Before we investigate further the idea of range versus charging anxiety, let’s consider a few facts and figures about how cars are used. Cars are only on the move 4% of the time; the rest of the time they are parked, either at home or elsewhere. The average journey is 8.4 miles, and only 5% of journeys are more 25 miles. Even for fleet vehicles (which are higher mileage), less than 6% of daily journeys total over 200 miles, with cars in the UK travelling an average of 142 miles per week.

If we compare these statistics with the real-world range of a variety of vehicles (see graph below), the chances of doing a journey that exceeds the range of today’s BEVs is slim. Nearly all of the vehicles currently on the market have a range that exceeds the average weekly number of miles travelled.

If you live in a home that has off-street parking, the issue is therefore more of a concern about charging on the go than those very infrequent long trips – charging anxiety rather than range anxiety.

If you are one of those with no off-street parking, it is still about your ability to charge on the go, but this presents a more frequent challenge and one that is likely to involve your employer or the public infrastructure network. Again, this is a question of charging confidence rather than concerns about range.

The public network

Currently, about 25% of all charging sessions take place on the public network, either at a destination, like a car park, or en route at a service station. What is preventing this number from growing, and also potentially delaying the speed of transition to EVs, is uncertainty. Is there a charger on my journey? Will the charger work? Will I have to queue? Will I be able to pay?

These are all valid questions for using the public charging network, and right now there are no easy solutions, but let’s explore the possible answers to these concerns one by one.

Is there a charger on my journey? There are more than 22,000 public chargepoints on the network, of which around 4,200 are rapid or ultra-rapid. This compares to just over 8,000 petrol stations. In the Budget, the government announced £950m of funding to support connections to the grid for rapid and ultra-rapid chargepoints. This will accelerate the viability of charging business models, especially for ultra-rapid chargers that can add up to 100 miles of charge in 10 minutes. We see the investment in these happening now with BP aiming to increase its network of ultra-fast chargers more than ten-fold to 700 by 2025, Ecotricity investing to upgrade its motorway charging estate, and the Motor Fuel Group committing £400m to building 50 ultra-rapid charging hubs per year from 2022, to name a few.

• Will the charger work? In August 2019, 8% of public chargepoints were out of service, according to the Office for Zero Emissions Vehicles. Although this is an improvement on the two years previous to 2019, reliability is still an adoption barrier, with 43% of EV drivers rating reliability as ‘bad’ or ‘very bad’ in a recent survey by Cenex. The issue has been recognised by the government, which is consulting on customer experience for public charging, citing a goal of 99% reliability across the infrastructure. It has the legislative framework to force this via the Automated and Electric Vehicles Act 2018. As BEV adoption increases and charging competition grows, reliability improvement trends will no doubt continue as a point of provider differentiation.

• Will I have to queue? According to LeasePlan’s European EV Readiness Index, the UK has the third most mature charging network behind the Netherlands and Norway. Nonetheless, rapid and ultra-rapid density is lagging, although we can see the investments playing out. They will need to, given the pace of BEV take-up in the UK, if we are to prevent a disconnect between vehicle miles and the public network becoming a crunch issue.

• Will I be able to pay? The final question of payment is a real frustration for current EV drivers and especially for fleet vehicles. All rapid chargepoints installed since spring 2020 should have a contactless payment option, and this market-led model has created a plethora of apps and accounts needed to access the entire network. There has been an increase in network coordination, such as the Octopus Electric Juice Network, which will help fleet drivers pay for charging across multiple operators as well as reconcile expense claims, and individual drivers pay alongside their energy bill. This kind of initiative, plus the current government consultation, which includes a 12-month contactless retrofit of existing chargepoints, will make paying for charge as convenient as at the petrol pump.

It’s not just about service stations

According to BP Pulse, it is expected that en-route will account for less than 25% of the total charging by 2030 as battery range increases in newer EVs. Meanwhile, the workplace could become key to the charging network. A well-planned and well-executed infrastructure investment can be differentiating for customers and staff, providing alternative revenue streams as well as being part of corporate action to reduce a business’s carbon footprint.

Businesses can get grants via the Workplace Charging Scheme to reduce the upfront costs. It is also possible that the recently announced super-deduction tax break in the Budget can be applied to the investment spend, reducing the cost further. And by working with a provider that can offer a range of services – including renewable technologies like solar and battery – as well as managing the end-to-end delivery journey, carbon gains can be amplified and costs optimised.

Action by businesses – either through workplace or destination charging – can significantly support the most challenging charging element: on-street provision. Through the On-street Residential Chargepoint Scheme, local authorities can obtain £6,500 of grants for each on-street charger. However, take-up is patchy. This is a concern for fleet, which must consider home charging where the business model is not leave-at-depot. In April 2022, the Office for Zero Emissions Vehicles will refocus its Electric Vehicle Homecharge Scheme to support people in rental and leasehold properties, and it will no longer apply to private homeowners. The public network is improving, but much more needs to be done to improve on-street charging provision.

What about grid capacity?

A question we are frequently asked at the Future Mobility Group is whether there is enough grid capacity to run all these electric vehicles. This is a complex subject, but to access relevant government funding, chargepoints need to be ‘smart’. This enables charging to respond to grid capacity. Combine this with the forecasted increase in power generation from 80GW in 2020 to 150GW in 2030, entirely through renewable sources, and capacity is unlikely to be an issue. However, companies need to think about locally available capacity when looking at charging. Capacity is taken on a first-come-first-served basis, and local constraints can be expensive to resolve. It makes working with the network operator and with a partner that can provide technology solutions essential.

Does the network meet EV driver needs?

Broadly speaking, yes, especially if you can charge off-street at home and/or there is workplace charging. Even if that isn’t the case, the improvement in the public network versus general journey dynamics means an EV in many locations is feasible for individuals and fleets. The picture will improve over time, providing that infrastructure keeps pace with the EV transition that is occurring now. The government is putting money to work broadly in the right areas, although arguably not with the right balance. A greater emphasis on off-street would seem to make some sense.

Each business and individual will need to work through their own transition thinking. While the 2030 ban on pure internal combustion engine (ICE) new car sales seems a long way off, improvements in infrastructure, and the breadth of vehicle choice, is not. Locking in a three- or four-year lease on an ICE vehicle now, on the basis of infrastructure concerns alone, would seem a lost opportunity to accelerate the climate transition.

This material is published by NatWest Group plc (“NatWest Group”), for information purposes only and should not be regarded as providing any specific advice. Recipients should make their own independent evaluation of this information and no action should be taken, solely relying on it. This material should not be reproduced or disclosed without our consent. It is not intended for distribution in any jurisdiction in which this would be prohibited. Whilst this information is believed to be reliable, it has not been independently verified by NatWest Group and NatWest Group makes no representation or warranty (express or implied) of any kind, as regards the accuracy or completeness of this information, nor does it accept any responsibility or liability for any loss or damage arising in any way from any use made of or reliance placed on, this information. Unless otherwise stated, any views, forecasts, or estimates are solely those of the NatWest Group Economics Department, as of this date and are subject to change without notice.

scroll to top