LowCVP Conference 2018: the Road to Zero

LowCVP Conference 2018

The government’s Road to Zero publication was released shortly before the 2018 LowCVP Conference, so the event examined how the Road to Zero strategy – containing 46 policy proposals – could best be achieved: by people, policy or product? The discussion was assisted by Bob Moran, the ‘architect’ of the Road to Zero, being one of the speakers at the event.

Setting the scene: The ‘people, product, policy’ conundrum

Natasha Patel, Associate Director and Christoph Domke, Director, Mobility 2030 team, KPMG

KPMG came up with an interesting prediction: There are 27 large automotive OEMs at the moment, but that number will halve in the next 10 years – ie. half will be taken over or merged. There will also be at least two successful entries of Chinese brands into the UK market in the next two and a half years. From now on, collaboration will be key.

Consumers, consumer behaviour, ULEVs and low carbon fuels? Priorities for progress

Prof Jillian Anable, Institute for Transport Studies, Leeds University

Jillian started off by saying that people, policy or product is not a realistic separation, as consumers do not have the responsibility: “we can’t rely on them to do what we think they should do”. It’s policy that leads to products. And policy makers might think that consumers would make rational decisions based on eg. low whole-life costs, but consumers ‘don’t do the maths’, and they make decisions based on a lot of other reasons apart from cost – many of them emotional. And environmental considerations are not top of the list either. What is important is whether a car helps us to run our lives. As a reflection of this, PHEV registrations are up 28% year to date, but pure EVs are down 9%.

Where are ‘Mr & Mrs mainstream motorist’ on ULEVs, future mobility?

Edmund King OBE, President, Automobile Association (UK)

Including AA Populus survey results, commissioned for the event

Edmund King presented the findings from the recent AA Populus survey. Most people see too many barriers to the early adoption of EVs; the barriers could be myths – but if people think they’re a barrier, they need to be overcome. Perceived barriers about EVs include:

Can’t go far enough on a single charge? 76% agree

Too expensive? 76% agree

Take too long to charge? 67% agree

Not enough charging points? 85% agree

Not enough choice of models? 67% agree

Yet despite the above, 31% would like to have an EV. What would make more people switch?: a real world range of at least 250 miles.

View from the motoring media

Ian Plummer, Director, Auto Trader

Ian confirmed what Green Car Guide is well aware of: when buying a car, motorists are now confused about what to do. The result of confusion is inaction. Indecision isn’t good for consumers or the industry. And when consumers do take decisions, they’re based on personal factors not societal ones such as environmental issues. Cost is the main factor for car buyers; half of motorists won’t consider EVs due to the high upfront cost – diesel and petrol will give better value for money. As a result, new BEV sales are still at less than 1%.

Who holds the keys to progress? Will we go on buying vehicles, or mobility?

Fleet/leasing perspective: Barriers and opportunities to ULEV uptake

Jay Parmar, Policy Director, British Vehicle Rental and Leasing Association

Perhaps not surprisingly, with around 1 in 3 plug-in cars operated by BVRLA members, Jay Parmar claimed that car ownership is on its way out. Jay also made the point that company car tax is not helping the sector, resulting in a petrol Astra currently having a lower tax rate than an all-electric Nissan LEAF. BIK for EVs needs to be reduced now, and commitments need to be in place for five years ahead.

Lorna McAtear, Head of Supply and Internal Accounts, Royal Mail

Lorna explained that the Royal Mail – which is 502 years old – has 48,000 vehicles. It collects from 115,000 post boxes and delivers to 27 million homes. The Royal Mail will have to work within the forthcoming Clean Air Zones around the UK. Lorna also quoted the ‘ICE ban’ in the UK in 2040, but this may happen earlier in Scotland, in 2032. Lorna understandably asked for consistency with such initiatives around the UK, and a clear understanding of exactly what vehicles are allowed where. She also made the point that there are currently very few low emission HGV alternatives from manufacturers, so the Royal Mail is likely to have no choice but to pick up fines. There was also a plea for one standard charging system, and the acknowledgement that charging large numbers of commercial vehicles may need new substations – along with the associated costs. Interestingly, the Royal Mail now can’t use bicycles due to health and safety reasons.

But will Mobility as a Service change the game?

Chris Perry, Country Lead, MaaS Global

Chris Perry described how Mobility as a Service aims to bring all mobility needs together in one place – such as via an app. The ‘Whim’ service, launched in Helsinki, has helped to reduce private car use from 40% to 20%. There are three options: Pay as you go, Urban, and Unlimited. The Unlimited service claims to provide all the transport that anyone would need – for 499 euros per month. However most people opt for Pay as you go. The service is also due to start in the UK, in the West Midlands, where the Unlimited service costs £349.

Policy backdrop

Dr Bob Moran, Head of Environment Strategy, Department for Transport

Bob Moran presented about the Road to Zero, and his opening headline was that we’ll need more collaboration to get things done. Bob also made the point that it’s possible to improve the UK’s economy AND reduce vehicle CO2 emissions.

The Road to Zero confirms the government’s long-term ambition – ie. all new car and van sales to be ‘effectively’ zero emission by 2040, with this being the case for 50-70% of new car sales by 2030. Plug-in car sales are at around 2% today, so we rapidly need to increase the rate of change in the coming years. There is still work to be done on definitions of different terminology, along with aiming for consistency between local initiatives for different areas of the UK, but the aim is for an ‘effectively’ zero emission vehicle to have a minimum 50 mile continuous zero emission range.

The Road to Zero document covers a wide variety of areas ranging from consumer incentives for EVs to initiatives that form part of the Industrial Strategy – ie. providing a vision of the future so that the UK automotive industry can rise to the challenge.

The Road too Zero strategy also aims for every new home to have a charge point, lamp posts to have charge points, and the Automated and Electric Vehicles Bill has now gone through Parliament resulting in smart chargers being mandated.

A Road Transport Emissions Advice Group is also being set up – a roundtable involving OLEV and the LowCVP, in order to engage and communicate effectively about a range of issues relating to ultra-low emission vehicles.

Putting policy into practice – environmental perspective

Greg Archer, Director, Clean Vehicles, Transport & Environment (T&E)

Greg made the point that change isn’t always incremental; cars largely replaced horses in New York in just 13 years between 1900 and 1913. We have the potential to make such a shift with EVs; the good news is that there has been a 74% reduction in battery costs, but the bad news is that at the moment the supply of EVs is constrained, with little choice. There’s also a problem with the way that EVs are sold – car sales people are not incentivised to sell EVs, and a significant reduction in servicing revenue is a factor in this.

There’s also virtually no marketing of EVs; just 1.5% of manufacturers’ advertising spend is on EVs, and 1.5% is on PHEVs. Regulation will soon (2020/21) start to ensure that OEMs will have to sell more EVs (OEMs will earn ‘super credits’ through the double counting of EVs to meet the goals), and when the industry turns its marketing and advertising skills to EVs, Greg believes there will be a transformation. In 2022 10% of vehicles will need to emit 50g/km CO2 or less, and so there will be a rush of EVs; we’ll move from 20-30 BEVs now to 40 next year, 60 in 2020, and over 100 in 2022.

An issue raised by Greg was that the UK may drop out of the European car CO2 regulations due to Brexit, therefore there will be less incentive for European manufacturers to sell EVs in the UK as they won’t count towards their targets.

Putting policy into practice – motor industry perspective

Paul Buckett, Head of Group Corporate and Public Relations, Volkswagen Group UK

Paul Buckett predicted that there would be more change in the automotive industry in the next five years than in the last 50 years. The Volkswagen Group will have 80 new EVs by 2025, and 300 by 2030. This will happen by scaling from new platforms. Initially Volkswagen will make a loss from this; it’s likely to take 5-7 years to reach a breakeven point. Volkswagen, like other OEMs, will need economies of scale.

Paul made a plea to the UK government for uniformity across national and regional policy, and stability in grants, giving the example of withdrawal of grants in the Netherlands, which stalled the market.

Volkswagen is currently having a push to ensure all dealers are focused on EVs – even though there is a temporary shortage of supply in the Volkswagen range – the reason given by Paul being that it’s challenging to match supply and demand, and they’ve had more demand than expected.

PANEL DISCUSSION

People, Policy or Product: How far can consumers take the drive to zero emissions?

Chair: Ed Gillespie, Co-founder, Futerra

Paul Clarke, Managing Director, Automotive Comms and Founder/Editor of GreenCarGuide.co.uk

Ted Foster, Centre Manager, EV Experience Centre

Dustin Benton, Policy Director, Green Alliance

Susie Seldon, Senior Marketing Manager, Go Ultra Low

Dr Ben Lane, Director and Co-owner, Zap-Map

Green Car Guide’s Editor, Paul Clarke, was on the panel for the final discussion of the day. Each panel member was asked to propose some action points for taking this agenda forward, along with ideas about a ‘Blue Planet’ moment for EVs. Here are Paul Clarke’s thoughts…

Desirability

Thankfully we’ve moved on from the G-Wiz, the only main EV that was on sale when Green Car Guide was founded in 2006 – a vehicle that could have destroyed the image of EVs in many people’s minds for years. We’ve now got cars such as the Jaguar I-PACE that are genuinely desirable – in terms of design, the driving experience and practicality – however we’re still not completely there yet. And why do media such as the BBC still use photos of the G-Wiz to accompany EV news stories?

Policies to help EV owners save money

Initiatives such as Go Ultra Low Nottingham’s ULEV Experience – a project which offers loans of EVs to Nottingham organisations so that people can experience EVs themselves – show that businesses, the main buyers of EVs, have one key driver: saving money. Linked in with this, incentives such as BIK really need to be sorted out; the BIK for EVs has gone up to 13% this year, it will rise to 16% next year, and then it goes back down to 2% in 2020 – therefore the Chancellor is not helping with the uptake of ULEVs – we need more of a joined-up approach from government.

Convenience

People don’t know what’s available in terms of the latest cars – but it’s much worse with charging; people without EVs have little idea how to charge, and even people with EVs have challenges – we need to make charging easy to avoid business users travelling around the country in EVs needing 10 different charging network RFID cards. People need to be able to turn up with a credit card to pay to charge their car. This is due to improve with government legislation such as the Automated and Electric Vehicles Bill – but it’s not happening fast enough.

Communication

We have to make communication about EVs engaging. By doing communication properly, the Electric Nation smart charging trial had over 3,000 applications for 700 spaces. Too many projects focus on technical or engineering aspects, and completely forget about the need for communication. So a plea to anyone who needs to manage a project to move EVs forward in some way – please include communication in your project plan.

‘Blue Planet’ moment:

At last week’s Oxford EV Summit – based around the focus of Oxford introducing a zero emission zone – a key message was that pollution from petrol and diesel vehicles is having an adverse impact on our health, and young children are the most vulnerable group; in fact air pollution stunts the growth of children’s lungs. Based on this information alone, when this makes the front pages of newspapers, it’s difficult to see how any politicians will support petrol and diesel cars going forward.

Summary

Policy drives products, and more products will allow more people to buy EVs. One policy action that could be taken immediately is to change the crazy situation of BIK rates for EVs being at 13% this year, rising to 16% next year, and then dropping to 2% in 2020. So a note to the Chancellor: if the government is genuinely serious about encouraging the adoption of EVs, reduce EV BIK to 2% now.

There was an excellent range of speakers at the 2018 LowCVP Conference, but the only speaker that communicated the business point of view – from the front line – was Lorna McAtear from the Royal Mail. The Road to Zero is an important document, but many questions remain about how businesses such as the Royal Mail – and thousands of other organisations – will find solutions to the need to switch to ultra-low emission vehicles. This event showed that the availability of plug-in cars is terrible at the moment – but it’s even worse for vans and heavier commercial vehicles. However any challenge represents an opportunity, so who is going to provide a solution to the lack of ultra-low emission commercial vehicles?

The LowCVP’s Managing Director Andy Eastlake loves alliteration – we’re told that Andy was behind the ‘people, policy or product’ theme for this event – so we’re going to leave Andy with our summary of the actions needed from the 2018 LowCVP Conference and from the Road to Zero in similar language: Collaboration and Communication. We’re here to assist when you’re ready.

Paul Clarke