New research reveals how UK can become an EV world leader
The UK government and industry must work together to accelerate the development of the EV industry, in particular on charging infrastructure and a manufacturing base for batteries.
The findings come from the inaugural EY EV Country Readiness Index, which saw the UK rank fourth against 10 leading auto markets globally* – accounting for 75% of the global light-vehicle market – on the basis of supply, demand and regulation.
Developed by the accounting and consultancy giant, the EV Index provides insights into how countries can develop robust and successful EV markets in line with global decarbonisation efforts.
The first edition of the EY EV Country Readiness Index shows that the largest markets are preparing for an acceleration in e-mobility adoption, but with varying degrees of ambition and urgency.
China, Sweden and Germany are currently leading the rankings because of key EV market strengths such as original equipment manufacturer (OEM) presence, policy support and battery supply. The UK has ranked fourth overall, but is in the top three for the categories of regulatory and demand readiness, ahead of Sweden and Germany. While the UK has some elements of real strength, its supply ecosystem will require further development if this market is to become a world leader.
David Borland, EY UK & Ireland automotive leader, commented: “While consumer demand for EVs is strong, continued support for the development of battery technology, products and supply chain – and greater investment in the nation’s fragmented charging infrastructure – are key to the UK’s progress. With the right industry partners, corporates and policymakers, the UK can hope to de-risk EV investment and rise up the index rankings.”
When the EV index results are broken down into the individual categories, the UK is in the top three in terms of demand, as measured by factors including consumer awareness and knowledge, current EV penetration rates, fleet demand, and total cost of ownership.
The UK’s position in the rankings has also been boosted by a supportive regulatory environment that has already been used to stimulate EV demand and, increasingly, supply. As a result, the UK is part of a leader band of three countries under the regulatory pillar of the index, ahead of second-placed overall market leader Sweden.
David Borland continued: “The UK Government’s Ten Point Plan for a Green Industrial Revolution, for example, suggests using £12bn of government funds in sectors such as zero-carbon vehicles to unlock private investment and boost green jobs. In other areas, stringent emissions regulations and a firm commitment to phase out combustion engines have been balanced by support for local battery manufacturing, development of charging infrastructure and consumer incentives, such as charger grants and parking perks.”
As well as strengthening and expanding the UK’s existing charging infrastructure, the research says localising battery manufacturing could help boost the EV market, so the development of deep and local manufacturing capabilities will be essential for the leading countries in this market.
In 2020, UK battery manufacturing capacity was around two gigawatt hours – just 4% of European capacity. However, plans are in development to boost this capacity. Last year saw the Government say that it’s actively pursuing investment in a gigafactory and has made up to £500m funding available.
Since then, Nissan has announced plans for a £1bn EV hub at its Sunderland plant, including a gigafactory, while a planning application for a gigafactory at Coventry Airport has been submitted by joint venture partners, Coventry City Council and Coventry Airport.
And in the last month lithium-ion battery start-up Britishvolt has started construction of the UK’s first gigafactory in Northumberland.
The report also found that while the UK is fairly competitive among peers in terms of EV demand, it is comparatively low on consumer perception parameters, such as behaviour towards charging infrastructure availability and intention to purchase an EV as a next vehicle.
EY added that public and private sector coordination and integrated planning will be necessary to boost the UK into the ‘leader’ band of the EY EV Country Readiness Index. However, the Government has a clear role to play in signalling commitment and direction to give the necessary confidence to the private sector.
Maria Bengtsson, partner and UK&I electric vehicle lead at EY, said: “The need to foster and support the EV ecosystem across these sectors is clear if the UK is to become a global leader in this industry. For policymakers, this means continuing to provide consistent, joined-up structures, targets and roadmaps. For corporates, finding the most attractive value pools and business models to maximise return on investment will be key.
“With the right industry partners, corporates and policymakers can play a significant role in de-risking the EV investment outlook helping the UK to become one of the global leaders of the EV transition.”
To access the inaugural EY EV Country Readiness Index, click here.
* China, Sweden, Germany, the UK, South Korea, US, Japan, Canada, Italy and India