Progress in addressing consumer barriers
7.We were interested in hearing the Departments view on what barriers needed to be overcome to achieve the targets for zero-emission cars. The Department for Transport told us it had undertaken a lot of research into this area, and the two most substantial factors had been price and range anxiety—the range cars can travel without recharging. Other barriers also exist, such as the appeal and acceptance of electric cars for consumers.11 The Department said it has used the Go Ultra Low publicity campaign to understand and assess what factors are influencing people’s choices towards ultra-low emission cars.12
8.The Department told us it has used the plug-in car grant, which reduces the purchase cost of qualifying new cars, to address the price barrier.13 The grant has been incrementally scaled back since 2018, and at the time of our evidence session contributed up to £3,000 off the purchase price of an eligible car worth under £50,000. One week after our session this was reduced, so it now contributes up to £2,500 towards eligible cars priced under £35,000.14 We put our concerns that the cost of ultra-low emission cars are still too high for many to the Department. The Department acknowledged that there is still a price difference between electric and petrol and diesel cars, but informed us that 13 electric vehicles now cost below £30,000 with a couple costing closer to £20,000. The Department argued that the price gap is closing “rapidly” and it is now starting to see critical mass which should enable costs to fall.15
9.Upfront costs are not the only element making electric cars costly.16 We were concerned about the cost of replacing batteries, especially for second-hand cars, and asked the Departments to explain how this is going to be managed. The largest part of the cost of an electric vehicle is the battery, but the Department for Transport believes that costs are falling as the technology develops and manufacturing scale increases. It believes that early concerns of battery degradation have not materialised. The Department for Business, Energy & Industrial Strategy pointed out that the cost of running an electric car would be “significantly cheaper” than a petrol vehicle, with the Department for Transport estimating it costs, on average, around 1p per mile to run a zero-emission vehicle in comparison to 10p per mile for a petrol or diesel car.17
10.We asked what the Departments were planning to do about the higher cost of charging on the public network compared to home charging.18 A National Audit Office analysis of public data suggests that charging at home can cost between 59% and 78% less than charging on the public network.19 The Department for Transport told us it expects there to be more competition in the market and innovation which may benefit consumers in terms of the price paid for electricity. It also suggested that electric cars might, for example, act as energy stores when plugged in at home to feed back to the grid at peak time and recharge at times were there is lower demand and cost. It thinks rapid charging in public, however, will always be more expensive than charging overnight at home.20
11.The Department for Transport acknowledged range anxiety as a barrier to take-up and is providing investment for infrastructure, specifically focusing on public and rapid charging. However, it told us that because 99% of all journeys are under 100 miles, electric cars are suitable for many journeys. It accepted that there had been scepticism about the technology for a number of years, including around range, but cited improvements to charging times and suggested that charging on longer journeys will cease to be an issue.21 The government has announced £1.3 billion in the Spending Review to help improve the availability of chargers.22
12.There is regional variation in the uptake of ultra-low emission cars in the UK, for example high levels of take-up in southern England, and we have been concerned about whether some locations, including rural areas, are missing out on the transition.23 The Department for Transport told us it has not targeted specific locations, instead taking a location-neutral approach to investment, and early take-up has been greatest in places with a higher density of traffic, where there are more charge-points and also affluence. Whilst there have been some targeted investments, such as through pilot schemes in places like Bristol and Milton Keynes, the Department told us it wants to make interventions on a UK-wide basis.24 It acknowledged though the need to work with local authorities to understand obstacles in specific areas and provide support so they can provide charging infrastructure.25
