The world is rapidly changing, and so is our approach to transportation.
Reaching Net Zero carbon emissions by 2050 is a top priority for the Government. To reach this ambitious target, we have taken decisive steps. After consideration, the Government has decided that by 2035 rather than 2030, the sale of new petrol and diesel cars and vans will be phased out and by 2040, all new cars and vans must be zero emission at the tailpipe. It is important such a transition is fair and pragmatic. This extension will allow families to take advantage of falling prices over the coming decade as the cost of electric vehicles decrease. The 2035 end of sale date also puts the UK in line with other major global economies, including France, Germany, Sweden and Canada.
During my time as Chair of the Transport Select Committee, we held an inquiry into Zero Emissions Vehicles (ZEVs). Our inquiry looked over a range of different issues relating to the transition to electric, from how to boost the new and second-hand ZEV car markets, to how we ensure we have the charging infrastructure we need. I am pleased that some of our recommendations, including the ZEV mandate, which I write about below, were taken forward by Government.
Boosting the number of new EVs being sold
In 2011, the Government introduced the plug-in car grant to create a mature market for ultra-low emission vehicles. Over £1.4 billion has been invested in this initiative, leading to the purchase of nearly half a million clean vehicles. The grant has now been adapted to ensure effective use of taxpayer funds, with £300 million in grant funding now refocused towards extending plug-in grants to boost sales of plug-in taxis, motorcycles, vans and trucks and wheelchair accessible vehicles.
These policies have seen transformative growth in the industry. We have seen an increase in the number of EVs bought from 1,000 in 2011, to 267,000 new electric cars sold in 2022; marking an increase of 76,273 from the year before, and a massive 158,795 from 2020. For new car registrations EV’s represented 22.9% of the market share. Of these, just 6.3% were plug in hybrids, meaning the majority (16.6%) were fully electric. This represents real progress from 2016, where the market share of new vehicles was just 0.4%. This also bucked the wider trend of new car sales in the UK in 2022, that declined by 2% from the previous year.
While new EV sales are steadily increasing, the used EV market is also experiencing substantial growth. In 2022, 71,071 second-hand EVs were sold—an impressive 37.5% increase from the previous year. Electric hybrids and plug-in hybrids also saw growth in 2022, of 8.6% and nearly 4% respectively. Despite this growth, market share of EV’s in UK used car market stands at 4.1%, up from 3.3% in 2021. However, there is room for optimism as used petrol and diesel car sales are declining by 7.7% and 11.8%, respectively.
Infrastructure
Infrastructure and production capacity must keep pace with the surge in EV sales. To this end, the Government is investing £3.5 billion to support the automotive sector and consumers in the transition to zero-emission vehicles. This includes £1 billion of Government investment to support the electrification of UK vehicles and their supply chains; £620 million for targeted electric vehicle grants and infrastructure; and £275 million to extend support for charge point installation at homes, workplaces and on-street locations. The Government is also investing a further £381 million through launch of the Local Electric Vehicle Infrastructure scheme.
Further, I want to assure you that the Government is putting in place the infrastructure to facilitate the accelerated transition to electric vehicles. So far, Government funding, alongside private sector investment, has supported the installation of more than 48,000 public electric vehicle charging devices, including over 8,000 rapid chargepoints - one of the largest networks in Europe.
Further, to support this transition, the Government is committed to installing 300,000 public EV chargepoints —nearly five times the current number of fuel pumps on our roads. But there is much more to do; therefore, by adjusting the date of the ban of petrol and diesel cars will ensure that the UK has the necessary infrastructure for a decarbonised economy. As a part of this soon customers will be able to compare costs across charging networks in a recognisable format similar to pence per litre for fuel and there will be new standards to ensure reliable charging for electric vehicle drivers. This infrastructure expansion will ensure that charging your EV is as convenient as filling up your gas tank today.
By the end of 2023, I know that Ministers aim to have six rapid chargepoints at every motorway service area in England. To support this goal, I am told that the Government will invest £950 million in the Rapid Charging Fund which will future-proof electrical capacity at motorway and major A road service areas, dashing any anxiety around long journeys and making charging as easy as refuelling a petrol or diesel car.
And further, new homes and buildings such as supermarkets and workplaces, as well as those undergoing major renovation, will be required to install electric vehicle charge points from next year under new legislation. This will mean that people can buy new properties which are ready for an EV future, while ensuring charge points are readily available at new shops and workplaces across the UK – making it as easy as refuelling a petrol or diesel car today.
Zero Emission Vehicle Mandate
One of the key ways of boosting the number of EVs on our roads is the ambitious ZEV mandate.
The mandate requires 80% of new cars and 70% of new vans sold in Britain to be zero emission by 2030, increasing to 100% by 2035. The move provides certainty for manufacturers and will help families make the switch to electric by providing more time for the second-hand EV market to grow and charging to roll out more widely across the country.
The mandate sets minimum annual targets, starting with a requirement for 22% of new cars sold in 2024 to be zero emission, as originally proposed. This will rise each year up to 100% by 2035, although some manufacturers already plan to reach 100% sooner. The UK’s ambition has already triggered investments in gigafactories and EV manufacturing, with over £6 billion in private sector chargepoint funding also ready to be unleashed. Today the government is confirming the trajectory to 2030.
Battery production
The Government has a long-standing programme of support to maintain the competitiveness of the UK automotive sector. Through the Automotive Sector Deal, it is working with the industry to develop world-leading battery technologies. In addition, the Government is keen to create a circular economy for all electric vehicle batteries and it will achieve this by supporting the innovation, infrastructure and regulatory environment for a UK battery recycling industry.
The £541 million Faraday Battery Challenge is playing a leading role in promoting the reuse and recycling of battery components. It is creating the research, innovation and commercialisation pathways and ecosystems that are establishing Britain as a battery science superpower, growing innovative companies and attracting large scale battery manufacturing to the UK. This includes the Government's investment in the UK Battery Industrialisation Centre, a unique open access facility.
In July 2023, Tata Group confirmed the UK had secured one of the largest ever investments into the British auto industry. A new gigafactory will secure UK-produced batteries for Jaguar Land Rover, as well as other British and European manufacturers. The factory will create up to 4,000 highly skilled jobs, as well as thousands of further jobs in the wider supply chain for battery materials and critical minerals. With an initial output of 40GWh it will also provide almost half of the battery production that the Faraday Institution estimates the British automotive sector will need by 2030.
Similarly, in July 2021, Nissan announced significant investment into their Sunderland plant and a partnership with their battery supplier, Envision AESC, and Sunderland City Council to create a North East electric vehicle manufacturing hub. As Nissan’s second global electric vehicle manufacturing hub, Sunderland will produce battery electric vehicles at scale from 2024 with projected volumes of 100,000 each year. This constitutes a transformational investment not just for the North East of England but for the UK, as we move towards a fully electrified future and deliver on the UK's net zero ambitions.
As you may be aware, Britishvolt entered into administration. This is a regrettable situation. The Government remains committed to the future of the automotive industry and promoting EV capability. As I understand it, the Government offered significant support to Britishvolt through the ATF on the condition that key milestones, including private sector investment commitments, were met. Unfortunately, the company was unable to meet these conditions and as a result no ATF funds were paid out. Britishvolt has been successfully acquired. I look forward to learning more about the Recharge Industries plans, and Ministers continue to work closely with the local authority to ensure the best outcome for the site.
The transition to electric vehicles is not just a matter of policy; it's a journey toward a cleaner and more sustainable future. The Government is committed to supporting this transition, ensuring that the UK remains at the forefront of the electric vehicle revolution.