ANALYSIS: Plugging the gap

When the government finally published its UK Electric Vehicle Infrastructure Strategy in March, its target of a minimum of 300,000 public EV chargers by 2030 already sounded challenging, and events since then have only increased the likelihood that it will fail to meet it.

When the report was published sales of EVs were booming – albeit from a very small base – and the report suggested there would be 10 million in the UK by 2030, when the ban on sales of new petrol and diesel cars and vans will be introduced. But fast forward seven months and the UK is facing a two-year recession and last month BEV uptake grew by less than the overall market for the first time since the pandemic, meaning October was the first month to see BEV market share fall year-on-year since May 2021. This suggests that the forecasts for sales of EVs may have to be reduced and therefore a decision to invest in expensive charging equipment will be even more difficult to justify. Given the government’s strategy is that development of the UK’s EV infrastructure will be “market-led”, the ‘market’ may well apply the brakes – not that it is exactly motoring along already.

The latest figures from the Department for Transport showed that the number of publicly available EV chargers in the UK increased by 34% for the year to October 1, rising by 8,710 to 34,637. To meet the 300,000 target there will need to be an average of more than 30,000 new chargers every year.

Darren Briggs, CEO of Ascona, is sceptical the target will be reached. He said: “Personally I don’t think 2030 is achievable. The infrastructure isn’t there, the network grid isn’t there. There’s a big question mark, what is the government going to do about the infrastructure?”

As an example of the problems companies currently face, he cites Ascona’s KDRB of Bush Hill Garage. “We said to Western Power, we want to put two EV chargers in as we want to be seen to be doing the right thing. They said: ‘Yes – but you can’t switch them on.’ Why? ‘All your neighbours down that side of the road won’t have enough power to boil their kettles at 7pm. But if you want to spend £250,000 buying a new sub-station we can do that for you. Then it will work’.’ No! Why would we do that?”

He added: “The financials don’t work out. As it stands now, you would put in two EV chargers at £55,000 each with a simple connection. The payback is currently over 15 years. Why would I do that at the moment? There is no payback. The demand isn’t there.”

There is also the problem that early adopters of EV charging are now realising their chargers are out of date. Briggs said: “We’ve got 60 sites. Ten per cent of our network have the old Instavolt chargers where previous owners of the sites leased parking spaces back to Instavolt. We get £1,500 a year ground rent and a small revenue share, dependent on usage, but usage isn’t there. Plus the fact those chargers are 25kWh. At the moment the bare minimum is 150kWh. There are a lot of challenges around EV. Our strategy at the moment is to sit back and watch what technology is doing. Not only is charging technology getting better but so too is battery storage.”

Location is another issue with chargers, according to Briggs, with urban sites far more likely to attract usage than rural ones. He said: “If you’ve got a site in the city centre, then put in EV chargers without a shadow of a doubt. But when you’ve got sites in North Wales, the demand isn’t there.”

Under threat

EV adoption is also under threat as electricity costs have risen by an average of 140% on last year, according to Quentin Willson, founder of the FairCharge campaign, who believes the government needs to act on charging costs. He said the government needs to cap rises on public chargers, lower VAT and support charge-point operators to build infrastructure.

RAC Charge Watch figures show that a driver exclusively using a rapid or ultra-rapid charger on the public network now pays around 18p per mile for electricity, up from an average of 13p in May. This compares to 19p per mile for a petrol car and 21p per mile for a diesel one, based on someone getting an average of 40mpg.

However, many current EV drivers will predominantly charge at home where electricity is cheaper.

Under the Energy Price Guarantee, the cost per mile for an average-sized EV driven reasonably efficiently is around 9p and the cost to charge a car to 80% at home will be £17.87. But the huge price gap between home and public charging highlights the extent to which drivers who depend on the charging network, including those who can’t charge at home, pay a premium to run EVs.

The RAC is also concerned the relatively high cost of rapid charging on the public network risks putting off drivers from opting for EVs when they next change their vehicles. It says that while the government’s Energy Bill Relief Scheme should help prevent charging costs from spiralling still further, it remains the case that drivers using public chargers unfairly pay 20% in VAT for electricity they buy, compared to charging at home where it’s just 5%. The RAC therefore backs the FairCharge campaign’s call for both rates to be set at 5%, a move that would reduce the cost of an 80% rapid charge by 7.91p to 55.38p per kWh, and an ultra-rapid charge by 7.99p to 55.95p per kWh and would not unfairly penalise those drivers who can’t charge their cars at home.

However, all the calls for government support for EV charging come when public finance is already under intense pressure, and this will only intensify if more motorists adopt EVs and stop paying fuel duty.

This article was written before the Chancellor’s statement, but it seems unlikely that he will be willing to provide more support for the EV sector when that 2030 target seems so far away and he has plenty of more immediate worries to address.

Leading the charge

While many operators are waiting to see how the EV charging market develops, the biggest players are making large investments. BP Pulse is aiming to double the size of its network in the UK to 16,000 chargepoints by 2030 and install a number of rapid charging hubs, while Shell UK has extended and increased its target for installing EV chargers across the UK to 100,000 public EV charge points by 2030, including 11,000 rapid chargers.

Meanwhile, in March 2021, the largest forecourt operator MFG announced plans to operate a dual-fuel strategy – continuing to provide existing fossil fuel infrastructure while rolling out EV charging hubs. It pledged to invest around £400m in ’ultra-rapid’ EV chargers for its UK-network over the next decade. The EV charging investment will see some 3,000 150kW and 350kW EV chargers at around 500 sites by the end of 2030, with the rollout completed to all suitable remaining locations in its network by 2035.

Putney Service Station, MFG’s state-of-the-art flagship EV charging/petrol filling station, convenience retail and valeting centre, was the outright winner at the 2022 Forecourt Trader of the Year Awards.