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What should the EV sector do now?
The latest news from the world of EVs
Good morning, I’m Tom Riley and welcome back to The Fast Charge, a British EV newsletter.
The top story in today’s edition… Following the PM’s announcement last week, what’s the next move for the EV sector? Elsewhere… A turnaround guru joins Arrival’s board, and why don’t we have more ‘auto charging’.
To flag, there will be no Fast Charge next Tuesday as I’ll be at the Conservative Party Conference. If you’re going, do drop me a message. As ever, if you have any thoughts or comments, please do get in touch. My contact details are here or simply reply to this email.
What should the EV sector do now?
Background: As I’m sure everyone and their mum will have seen last week, the Prime Minister announced in an address that the 2030 date for banning new petrol and diesel vehicles would be pushed to 2035. The reason given was that “the upfront costs for families are still high” and therefore the transition was brought into line with countries “like Germany and France”.
Reaction: The response to last week’s news has been huge, with pretty much the whole automotive, energy, and EV sector coming out swinging against the decision. The main criticism from the EV sector is that this move will scare off investment and consumer demand – right when it’s needed. It also appears to have been totally out of the blue – with no pre-warning to industry figures. In one instance, I’m told Whitehall officials were sitting with businesses at the same time BBC news alerts went off about the impending change. Seemingly being blindsided by Downing Street.
Why? This is a political positioning move, plain and simple. Back in the Summer, I mentioned that the Tories were using the break to undertake wide-ranging polling across many issues, including on net zero commitments. While I was told very strongly by a Conservative source that they were keen to support net zero and keep the 2030 date, one assumes the polling came back much further in the opposite direction than they first thought. If it’s any indication, last week a YouGov poll said that 50% of people support pushing the deadline back - against 34% who opposed it.
The reality… Rishi Sunak is the leader of a party that’s been in power for 13 years. He has no political capital to burn, all he can do now is take the path of least resistance – and highest reward. By making this move, he’s backed campaigns run by the Daily Mail and News UK titles - which will win him some favours. And he’s also managed to force out Labour’s position on net zero – as they responded to the news by promising to reverse the date to 2030. This is just before their party conference where they discuss policies like this together.
Legal status: What’s ironic about Sunak’s decision is that by Thursday it became public that the Zero Emission Vehicle mandate would still require carmakers to produce 22% electric from next year, and 80% by 2030. Given most carmakers – especially those with smaller model lineups – can’t exactly break their production up 80:20, that means the vast majority will still be all-electric by 2030 anyway. Note, the industry is still waiting for the ZEV mandate to be published.
Impact: By keeping robust targets for manufacturers to sell EVs, meanwhile saying to drivers they can in essence ignore all the EV guff until 2035, what the government has set in motion is a crunch point. Aka. We could get to the moment where supply is much higher than demand. Sunak, being a free market chap, may quite like this scenario as it might mean carmakers have to battle on price - much like how Tesla dropped its prices earlier this year to keep market share. However, that’s a very big risk with a lot of big money - especially as the EU, US, and China continue to pump state money into their new industries.
What next? The Prime Minister has undoubtedly been what my father would call a ‘prat’ this past week – a perfect example of bad stakeholder engagement. However, for the industry to just dig in and move forward as before I believe would be a rookie error. What this pushback reveals is the majority of the public are still not sold or ready for EVs. Across the industry and government, more therefore should be done collectively to advocate and demystify the transition.
One solution… I’ve heard many in the sector call for (especially carmakers) is that the government needs to bring back better incentives. However, that seems unlikely to me given the cost squeeze on the Treasury and Sunak’s direction of travel. It’s also questionable whether cash incentives actually help normal drivers - or in fact just give a free bonus to the Waitrose loyalty club.
Alternative solution? A couple of industry folk I’ve heard from since last week have offered up a different idea. It’s to encourage the government to initiate a long-term EV marketing campaign. Previously, there was the ‘Go Ultra Low’ campaign which was supported by OZEV and the auto and energy sectors. But, in 2021, after running for seven years, its funding was cut. Perhaps restarting it could go some way to boosting demand, myth-busting from the center (not the sides), and all without the Treasury having to offer up new grants. Would that be enough?
Arrival appoints turnaround expert to board
Background: Over the past few weeks, electric van start-up Arrival has seemingly been teetering on the verge of going under. But, in the past week it’s had some welcome news. Firstly, the firm reached an agreement to pay off an unknown lender who had been disputing an exit fee – the company agreed to pay them $7.4 million. And, secondly, they have appointed Alexandre Zyngier as a non-executive director.
Who? Zyngier is the founder of Batuta Capital Advisors, which is a company that is focused specifically on turnarounds. Naturally, it confirms that Arrival is fully in the soup, though this appointment does raise some hope that all (or part) of the firm will make it through. The stock is currently trading at it’s lowest level – around $1.20. The only way is up…
If you haven’t already, check out my recent deep dive into how Arrival got to this point 👇 It’s now one of my most popular stories.
Other top EV news…
🙏 Despite the pushback of the 2030 ban, Nissan has vowed to go all-electric by 2030. The CEO said there was ‘no turning back’. Read more.
📅 As we march forward towards Christmas, carmakers in Europe have again called on the EU to “act now” to delay the planned tariffs on EV exports due to come in from January 2024. Read more.
🔌 It appears that over the weekend Gridserve’s chargers suffered payment issues – which were only fixed on Monday. This resulted in several complaints online. However, it also has sparked a question… why aren’t more networks moving to ‘auto charge’? Which, in short, is when you put a plug into your car and there’s no need to fiddle about with a machine. Currently, only Tesla and Fastned seem to do it in the UK. Yesterday, Gridserve said they were “working on Autocharge” but that they don’t have a timeline.
⏲️ As a side note on the above, on TikTok, I’m currently doing a charger review series. The first challenge is seeing ‘how long it takes to start charging an EV’ on different networks. So far I’ve done ESB and Shell – the desire for auto charging comes up in a lot of comments. Next on the list is InstaVolt and MFG with others to follow.
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🏡 A new report, Rightmove, revealed the number of homes listed for sale that mentioned EV chargers was up 40% on last year and 592% since 2019. Read more.
🚗 According to Auto Trader research, the average price of second-hand electric cars in the UK has fallen by 21.4% to £32,463 in the past year. Read more.
By Tom Riley | Check my Linktree for LinkedIn, Twitter and TikTok