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Shoosmiths’ Commercial Energy and Mobility partner, Chris Pritchett moderated a panel discussion on the progress towards net zero adoption in passenger vehicles at the recent SMMT International Automotive Summit 2024.

An overarching theme applying to all sessions across the day was the industry roadmap for the transition to net zero.

In her keynote, Anna Westerberg of Volvo Buses presented a calculation for what she called the “E-mob adoption rate”, being:

• Products / services x total cost of ownership x infrastructure x fossil-free energy x supply chain = customer competitiveness and peace of mind.

Panel discussions on net zero adoption in commercial vehicles, zero-emission vehicle manufacturing, and the significance of ESG for businesses and supply chains underscored the day’s agenda. Each session contributed to the goal of customer competitiveness and peace of mind. While the automotive industry controls these aspects, the government’s role is significant, and effective collaboration is vital for a smooth transition to net zero.

The first panel discussion of the day, moderated by Chris, featured Ashley Andrew (President of Hyundai & Genesis UK), Erin Baker (Editorial Director at AutoTrader), Maria Grazia Davino (Group Managing Director at Stellantis UK), Vicky Read (Chief Executive Officer at ChargeUK) and Gerry Ross (Head of Commercial Motor at Allianz and Chair of the ABI Motor Committee).

The panel evaluated the advancements in the adoption of zero emission vehicles, identified their prospects, and the requirements for the UK to realise them. They also examined the pace of market shift and considered strategies to accelerate this, together with measures that could be taken to prepare Britain for powering and sustaining a future fleet of zero emission passenger vehicles. The topics discussed were particularly poignant following an earlier press conference in which Stellantis indicated that it may cease electric vehicle (EV) production in the UK unless the government enhances incentives to boost demand.

Here are some key findings from the session:

• Incentives: with sales of new zero emission vehicles predicted to fall short of the 22% target for 2024, Original Equipment Manufacturers (OEMs) are facing a significant challenge in that the market has not responded to significant levels of investment (both in terms of the technology and the charging infrastructure). The panel discussed the need for the government to accelerate the overall uptake to net zero through the introduction of tailored incentives on the sales of both new and used EVs for private consumers (i.e. half VAT on EVs) and also on vehicle charging (i.e. a harmonisation of VAT for public and private charging). And compared this to the fleet sector which benefits from government support and continues to flourish.

• Consumer confidence: The panel proposed several strategies to boost consumer confidence in buying new and used EVs: (i) government-industry collaboration, (ii) improved OEM battery warranties, and (iii) the use of clear, standardised language. They acknowledged the prevalent consumer uncertainty, whether about range anxiety, charging costs and availability, or general EV market accessibility. The panel unanimously called for reassurance and guidance for consumers undergoing this lifestyle change. They expressed optimism that it’s time for OEMs and the government to take charge of the narrative, address uncertainties, and foster a positive attitude towards the EV transition.

• Myth-busting: the panel emphasised driver education and awareness as a countermeasure to the growing anti-EV sentiment and to speed up the transition to net zero. Misconceptions about EVs, such as fire risks, battery degradation, decreasing range, and unreliability, are prevalent. The panel stressed the need for a comprehensive public information campaign for both new and used EV markets to foster understanding and enthusiasm, ultimately aiding the transition to net zero.

• Charging infrastructure: hot on the heels of consumer confidence and uncertainty, the panel discussed how range anxiety, charging ability and cost remain key concerns to consumers when considering an EV. The SMMT’s Vision 2035 report considers building ahead of demand and the panel assessed how: (i) increasing the number and accessibility of charge points (and the barriers to doing do), (ii) ensuring that these are distributed equitably, (iii) making public charging more affordable through equalising VAT with home charging and reducing standing charges; (iv) adding renewable electricity to the Renewable Transport Fuel Obligation; and (v) providing certainty in respect of investments (private investment and existing charging subsidy schemes), could all help the UK maintain its current 45% year-on-year exponential growth in the number of public charge points.

• Insurance and price parity: The panel’s final points focused on the price parity between EVs and Internal Combustion Engines (ICE) vehicles and reducing high EV insurance premiums. Collaboration among industry segments, including government, insurance, and manufacturers, was suggested as a solution. Although EVs are often newer and more premium, reducing their price and encouraging repair over write-offs post-accident could lower insurance premiums. The panel also suggested government actions, such as reviewing the personal injury discount rate and eliminating the 12% green insurance premium tax.

Other themes emerging from the Summit

Trade

As the UK negotiates a new trade agreement with South Korea and anticipates joining the Trans-Pacific Partnership with Japan’s support, these partnerships are crucial. Despite concerns about the UK’s electrification shift, competitiveness, and potential government change impacts, it’s important to note that automotive support will likely persist regardless of the General Election’s outcome. With global protectionism rising, the UK’s commitment to free trade will be tested as the industry transitions to a net zero future. Thus, maintaining investor confidence is essential.

The future landscape

If the next UK government is serious about growing the economy, the automotive industry can play a pivotal role. Britain’s investment appeal can be enhanced through sustainable energy policies, support for zero-emission vehicle markets, future-proofed jobs, and fair trade relationships. Despite challenges like high energy costs and market volatility, the automotive industry, contributing £16 billion to the UK’s economy and supporting over 800,000 jobs, is a key player in the UK’s prosperity. As we transition towards zero-emission and autonomous vehicles, strategic investments are crucial to maintain the industry’s reputation and ensure a smooth transition to a net zero future.

The Summit unites the entire spectrum of the UK’s automotive industry, including vehicle manufacturers, component manufacturers, and the aftermarket along with government entities, related sectors, and the global press, establishing an essential forum for deliberating on common objectives. Shoosmiths was proud to sponsor its 16th edition.

 

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