Capitalising on the growing surge in EV adoption
By David Savage, vice president, UK and Ireland, Geotab
Sales of electric vehicles are well and truly on a roll. In 2021, more than 190,000 new battery electric vehicles (BEVs) joined Britain’s roads – up three-quarters from 2020 and accounting for more than the previous five years combined. Across Europe and Britain, sales of EVs outpaced that of diesel vehicles for the first time ever in December 2021, with 176,000 sold compared to 160,000 diesel cars.
While the EV sales figures are encouraging to see as we strive towards lowering total CO₂ emissions, the past year also saw new challenges rear their head, with the potential to jeopardise the progress made to date.
Rising electricity costs
Unfortunately, electricity prices have followed a similar upwards trajectory to EV sales over the past year. Europe, as a whole, is enduring an energy crisis, with a shortage of electricity and gas deemed widespread. This situation has forced countries to hike energy rates, pushing electricity prices to their highest level in recent years.
In the current climate, Geotab’s advanced Electric Vehicle Suitability Assessment (EVSA) system is well-placed to assist fleet owners in determining the suitability and potential costs associated with a switch to all-electric vehicles. The EVSA analyses a given fleet’s telematics data before providing recommendations based on EV availability, weather conditions and performance as well as the fleet’s driving patterns.
For perspective, the average price per kilowatt-hour (kWh) of electricity in the UK was around 18p back in 2019 and 2020. However, this figure is widely expected to go up with the release of 2021 figures – with certain bills jumping as high as 34.64p per kWh. As a result, it spells trouble for private and commercial adoption of EVs, with the rising charging costs potentially deterring those considering the switch.
At the very least, the cost benefits of EVs should match, if not hugely exceed what’s being offered by traditional internal combustion-engined vehicles. The issue is compounded for operators of electric fleets, with companies having to foot higher charging costs across their entire vehicle range.
Repercussions of withdrawn subsidies
To intensify the situation, the UK government has twice downsized the value of EV grants in the past year, falling to £1,500 – half the sum available to buyers at the start of 2021. Additional restrictions on eligibility for the scheme were also introduced, with grants now only available for EVs up to a value of £32,000.
The decision, which is a further disincentive to purchase an EVs, also risks the UK falling behind other European countries in terms of both electrification and wider carbon reduction targets.
The move could force carmakers to instead focus their efforts on more cost-effective countries such as Germany and France, where subsidies are up to three times higher. In Germany, for example, buyers receive £5,000 more on average compared to those in the UK.
Overcoming new challenges
If the UK is to realise its ambitious goal of ending new petrol and diesel car sales by 2030, new and/or different strategies will be needed to overcome the two-pronged risk of rising electricity costs and falling incentives. For policy-makers, this means reevaluating premature cuts to EV grant funding and adopting a cohesive approach to stimulating carbon reduction, for example encouraging homeowners to power their vehicles by installing solar power solutions.
For businesses and consumers, it's important to keep in mind that while electricity costs are rising, fuel prices are also certain to increase as we approach their eventual phasing out. Powerful new tools are also now at hand from technology providers, such as our efforts at Geotab to manage smart-charging – utilising electricity at off-peak times to lower recharging costs. For governments, businesses and consumers alike, it’s imperative we do all we can to advance EV adoption, innovation and growth.
