Electric vehicles strategy: Environment and Climate Change Committee report

Approximate read time: 10 minutes

On 16 October 2024, the House of Lords is due to debate the report of the House of Lords Environment and Climate Change Committee, ‘EV strategy: Rapid recharge needed’, published in February 2024. In April 2024, the previous Conservative government published a response to the report.

1. Committee conclusions and recommendations

The committee said that the transition to EVs was “essential” if the UK is to meet its net zero emissions target by 2050. It said that surface transport was the UK’s highest emitting sector, with passenger cars responsible for “over half” of the sector’s emissions in 2021.^[1] The report stated that EVs could provide “dramatic reductions” in emissions, in addition to improved air quality. However, it said that with EVs only making up 3% of all cars currently on UK roads, “concerted government action” to encourage the adoption of EVs was “needed urgently”.

The committee acknowledged that there had been “some progress” in transitioning to EVs. The previous Conservative government legislated to end the sale of new petrol and diesel vehicles by 2035. There had also been progress in the rollout of charging infrastructure and the previous government had “published strategies to enhance innovation in battery technologies” and strengthen the UK’s car making industry. However, the committee concluded that progress was “not happening fast enough” and significant barriers remained.

To address those barriers, the report made a series of recommendations on the following topics:

• communication and political messaging
• upfront costs of acquiring an EV
• charging infrastructure and affordability
• electricity grid decarbonisation and recycling of EVs

On the importance of communication and political messaging, the committee said that “consumer confidence [in EVs] is critical” to secure a successful transition. It said the government “must do more to convey a positive vision” of EVs and to counter misinformation about the technology.

The committee was critical of the September 2023 speech by former prime minister Rishi Sunak in which he had pushed back the petrol and diesel phase-out date from 2030 to 2035.^[2] The committee said that when Mr Sunak told the public that achieving net zero “is going to be hard”, he had emphasised the “costs while failing to stress the benefits” of EVs transition. The committee said the government must “develop a communications strategy in collaboration with industry and consumer organisations” to provide clear and authoritative public information about EVs.

The committee said the up-front costs of EVs were a “significant barrier to consumer adoption”. It said that EVs were often more expensive than their petrol and diesel equivalents and there was an “insufficient range” of affordable EVs. The report recommended that the government should explore “targeted grants to incentivise the purchase” of EVs. It said that any such grants should be “tapered as the prices of EVs fall and approach parity” with petrol and diesel vehicles.

The committee said the government needed to “turbo charge” the rollout of charging points. It said that “up to 40%” of households do not have off-street parking and are reliant on public charging. The report said the availability of public charge points around the country was “highly variable”, and that the government had “missed its targets for motorway charge points”. The committee recommended that the government must “urgently review outdated and disproportionate planning regulations which are a major block to the rollout”. It also recommended that central government support for local authorities to install charge points, for example through the local electric vehicle (LEVI) fund, should be protected and expanded.^[3] The report said this was necessary because local authorities currently faced “major funding challenges”.

On the affordability of charging, the committee said that charging infrastructure must be “reasonably priced, convenient, and reliable”. The report noted that VAT on domestic electricity was 5%, whereas VAT on public charge points was 20%. The committee said this was “unfair for drivers without access to off-street parking”. It recommended the equalisation of VAT rates for domestic and public charging.

The committee said that to ensure the transition to EVs eliminated greenhouse gas emissions, it was necessary to decarbonise the electricity used for charging. The report recommended that projects to upgrade the electricity grid “must prioritise low-carbon generation” and grid upgrades for charge point installations should be designating “nationally critical infrastructure”. The report also said that the government must “urgently review and progress options” to invest in EV and battery recycling facilities. This would ensure that recycling is undertaken by responsible operators and that as many of the critical materials contained in EV batteries as possible can be reused for domestic production.

2. Conservative government response to the committee’s report

In April 2024, Rishi Sunak’s government published a response to the committee’s report.^[4] It welcomed the report, and it acknowledged the importance of transitioning to EVs to meet the UK’s net zero targets.

The government said it had provided £2bn to support the transition to EVs, which had been focused on:

Reducing barriers to the adoption of such vehicles, including offsetting their higher upfront cost, and accelerating the rollout of charge point infrastructure.^[5]

The government also said it had legislated to ban the sale of new petrol and diesel vehicles from 2035. It said that this was the “largest carbon saving measure across government and the most ambitious regulatory framework of its kind, in any country”. It claimed that this provided “policy certainty for investors, manufacturers and consumers”.

On communication, the government agreed with the committee that it was important to promote the uptake of EVs. It said that the ‘Plan for drivers’, published in October 2023, had included a commitment to “champion the transition to zero-emission vehicles”. The government also said that in February 2024 it had published guidance which provided information on EV costs, charging and infrastructure.^[6]

On the up-front costs of EVs, the government disagreed with the recommendation to provide grants to incentivise the purchase of EVs. It said that there had previously been a grant—the plug-in car grant—which had been in place for “over a decade”, but it was closed to new orders in June 2022.^[7] The government said that a review of this grant had concluded that it had “less of an effect on demand than other existing price incentives, such as company car tax”. The government also said that some forecasts had predicted that the price of EVs would reach parity with petrol and diesel cars “by the end of the 2020s”. The government said that it had a responsibility to only provide grants that were the “best value to the taxpayer”.

On charging infrastructure, the government agreed that accelerating the rollout was important, but it also defended its record in providing charge points. It said that since 2023 there had been a 47% increase in the number of charge points across the UK, totalling 57,000 by March 2024. In addition, the government listed the following measures it had taken to support further rollout:^[8]

• The £381mn LEVI fund, supporting local authorities in England to deliver a step change in the number of on-street charge points.
• The £70mn rapid charging fund pilot to facilitate the delivery of charge points at motorway service areas.
• The introduction of the Public Charge Point Regulations 2023. These will improve consumer experience by ensuring that pricing information and payment methods are simplified, charge points are reliable, and public charge point data is freely available.
• The workplace charging scheme and electric vehicle infrastructure grants continue to support schools, businesses, charities, flat owners, renters and landlords [to install charge points].

On charging affordability, the government disagreed with the recommendation to equalise VAT on domestic and public charging. It said that “expanding the VAT relief already available would impose additional pressure on the public finances to which VAT makes a significant contribution”.^[9]

On decarbonisation of the grid, the government said that accelerating network connections for low-carbon generation projects was a “top priority”.^[10] It said actions were “already underway to release network capacity and allow more advanced projects, whether EV charge points or other infrastructure, to connect faster”. The government disagreed that grid upgrades for charge points should be designated nationally critical infrastructure. It said there were “no powers in legislation to prioritise [electricity] connections for specific sectors”, such as transport, over others.^[11]

On recycling EVs, the government said it was “exploring ways to incentivise reuse, repurposing, and domestic recycling infrastructure for batteries and other products containing critical minerals”. It said that government action, such as through the automotive transformation fund, had “supported several critical mineral projects to mine, process, and recycle battery minerals required for electric vehicle production”.

3. Labour government position

Prior to the 2024 general election, the Labour Party published a policy paper on its plan for the UK’s automotive sector.^[12] It said that “years of neglect by the Conservatives risk leaving the UK automotive industry being lapped by competitor countries”. It criticised the Conservative government’s decision to “water down” the 2030 phase out of petrol and diesel vehicles, and committed to reintroducing the ban from 2030.

The plan included measures on:

• increasing battery manufacturing capacity (part-funded by a new national wealth fund)
• improving skills in the automotive and battery-making sectors (for example, through reform of the apprenticeship levy)
• supporting demand for EVs (through the rollout of charging infrastructure and positive consumer messaging)
• lower energy costs and a “zero-carbon electricity system by 2030”

Labour’s 2024 general election manifesto reiterated some of these commitments. It said a Labour government would:

Support the transition to electric vehicles by accelerating the roll out of charge points, giving certainty to manufacturers by restoring the phase-out date of 2030 for new cars with internal combustion engines, and supporting buyers of second-hand electric cars by standardising the information supplied on the condition of batteries.^[13]

At the time of writing, the new Labour government had made few policy announcements directly related to electric vehicles.

On 14 September 2024, the Telegraph reported that the government was planning to “back away” from its commitment to ban the sale of all new petrol and diesel vehicles.^[14] The article claimed that the government was considering allowing the sale of new hybrid vehicles, which use a petrol or diesel engine in conjunction with a battery, until 2035. However, the article also quoted a government spokesperson who claimed that the policy had not changed. The spokesperson said:

This government’s policy has always been to revert to the original 2030 phase out date for the sale of new vehicles with pure internal combustion engines. The original phase out date included the provision for some hybrid vehicle sales between 2030 and 2035. We will set out further details on this in due course.^[15]

The Guardian also reported that the government had confirmed that the sale of new hybrid vehicles would be allowed until 2035.^[16]

On 17 September 2024, the Department for Business and Trade announced that £88mn had been awarded to 46 projects to “boost zero emission vehicle” technology.^[17] The announcement stated that the joint funding, from industry and the government, had been awarded to projects including the “development of electric trucks for the NHS and Royal Mail, e-motorcycles and wireless charging solutions”.

4. Read more

• House of Commons Library, ‘Electric vehicles’, 16 July 2024
• House of Commons Library, ‘Electric vehicles and infrastructure’, 12 July 2024
• House of Lords Library, ‘King’s Speech 2024: Transport’, 10 July 2024
• House of Lords Library, ‘King’s Speech 2024: Energy security, net zero, environment and agriculture’, 11 July 2024

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Cover image by Michael Fousert on Unsplash