Electric vehicle (EV) adoption is the single biggest disruptor of the automotive market for decades, and will continue to shape it for years to come.

EVs are rapidly becoming more appealing due to their lower running costs, reduced maintenance expenses and rising fuel prices, with nearly one in five cars sold in 2023 being electric.

Yet, most EV vehicles are still too expensive to purchase, hindering any serious plans for further widescale adoption.

The good, the bad and the electric

Indeed, while prices are partially coming down due to increased competition from Korean and Chinese manufacturers, future growth rates have been revised downward from prior annual expectations. This drop is likely due to a combination of the removal of country-based subsidies, persistently high costs for vehicle acquisition and the relaxing of phase out timescales for conventional ICE (Internal combustion engine) cars. Additionally, persistent challenges such as faster depreciation vehicle rates, limited range of distance compared to diesel cars, battery lifespan concerns, the cost of installing home charging points, longer charging times, complex repairs, higher insurance premiums and fluctuating electricity prices also hinder adoption.

To truly turn the tide, or the steering wheel in this case, both the industry and government need to play their role. Despite organisational initiatives, like Uber stepping in to offer grants to drivers, the responsibility of making EVs affordable falls squarely on the Government. While the onus of solving some of these problems lies with the manufacturers, such as battery lifespan and depreciation rates, the high investment costs in research and development (R&D), new technologies and infrastructure investments mean that natural market forces would struggle to make EVs affordable for mainstream adoption without assistance.

Change from above

 While the Government has already started down this path by planning to establish 300,000 charging points by 2030, questions remain about whether this will be sufficient to keep up with the increasing demand, despite the above challenges.

The Government has already shown strong commitment by allocating significant funds to support the expansion of the charging infrastructure. For instance, the Office for Zero Emission Vehicles (OZEV) has various grant schemes in place. Significant progress has been made with 62,536 electric vehicle charging points across the UK, across 32,992 charging locations by the end of 2024. Nevertheless, as strong of a start as it is, it might not be enough to meet the ambitious target of 300,000 public charging points.

 To effectively support the transition to electric vehicles, the new Government needs to prioritise EV charging infrastructure in cities and large urban populations where pollution and congestion are highest. For example, encouraging public-private partnerships and incentivising private sector investment in charging infrastructure, and speeding up the approval process for new charging points. Additionally, deploying energy storage solutions, such as batteries and other technologies, can help manage demand peaks and provide backup power for charging stations – making infrastructure plans and execution more manageable.

Leveraging existing policies, like London’s Ultra Low Emission Zone (ULEZ), can set timeframes for full EV adoption in major cities with minimal adjustments. ULEZ has already demonstrated success in reducing pollution by forcing vehicles that do not meet stringent emissions standards to pay a fee to drive within the zone. Expanding such frameworks to other major cities can accelerate the transition to EVs without the need for entirely new legislative measures.

Local and national policies supporting the installation of charging points in new buildings and public spaces will also help meet the target. The Government needs to overcome challenges such as substantial coordination, local planning, site selection and construction required for the physical installation of charging points. In less densely populated areas, incentives and subsidies may be necessary to encourage the build out.

In short, if the government can entice private sector investment and create the right conditions for a sustainable and dynamic market space by promoting easy and transparent planning permissions, it will significantly help. However, to meet the ambitious targets, additional subsidies for less densely populated areas may still be required.

Paving the road ahead

The jury is out on whether full battery EVs will become the dominant power source. While EVs are currently the natural front-runner for sustainable transport, governments and key players in the industry should be open to all kinds of clean alternatives, including hydro power and clean fuels. The evolution of the free market over the next few decades will shed light on what consumers prefer – which must be protected by government.

Regardless, collaboration between automotive manufacturers, technology companies, and government bodies will be crucial in driving innovation and creating an environment where EVs or other alternatives can thrive. By fostering an ecosystem that supports technological advancements and infrastructure development, the UK can lead the way in the global transition to sustainable transportation.