EV industry challenges

Answer

Of the traditional sectors, the mobility sector has seen some of the most rapid change and development in recent years. The conversation we are having this May has moved significantly from the one that we were having this time last year, and the field of electric vehicles (EVs) and its pervasive challenges in relation to legislative deadlines and consumer sentiment have been central to this evolution.

Changing consumer anxiety

Range

One of the most significant challenges facing the EV industry from a consumer perspective has been range anxiety – does the car have enough juice to get you from A to B, and how might unforeseen problems along the way (eg, the inevitable traffic jam) affect the car’s ability to complete the journey? The initial phase of EV development contributed to this anxiety as EVs were limited to a 100-mile range, which is significantly less than their internal combustion engine (ICE) counterparts capable of 250-400 miles. Battery technology has since developed and the current era of EVs entering the market match the 250-400-mile range. Manufacturers such as Mercedes are even developing commercial EVs capable of a 1000-mile range. Ultimately, the modern consumer has a choice – they must weigh up affordability relative to their intended use. Larger batteries and larger ranges inevitably come with greater expense.

Charge points

Current consumer anxiety is driven by the availability and accessibility of charge points. For example, let’s consider the customer that arrives at a motorway service station to find that two of the four charge points are out of action and the two that are operational are currently occupied with a queue of four cars waiting to use them. ICE vehicle owners simply do not face this problem, nor anticipate it. The infrastructure for ICE vehicles is too deeply integrated into the modern transport space. The prevalence of charge points directly correlates to the source of anxiety – the more charge points there are in a geographical location, the less consumers will worry about charging their vehicles. However, the consumer faces another challenge once a charger becomes available, the ease with which the consumer can successfully navigate the maze of apps, providers and payment platforms. The industry faces a complicated challenge in creating a streamlined point of contact for consumers to access chargers and pay for their electricity use.

In response to this criticism, the government has introduced a draft piece of legislation, The Electric Vehicles (Smart Charge Points) Regulations 2021. Submissions by the private sector to the government in relation to this legislation are ongoing, with the majority advocating for legislation that streamlines the non-uniformity of apps and provides standard service-level agreements that providers and pay platforms must meet. Once implemented, these changes will be important in persuading on-the-fence consumers to make the switch by redistributing the perceived risks associated with charging anxiety.

The change in consumer anxiety is representative of the first and second waves of the EV industry. The first wave targeted consumers with off-street parking who had the ability to install charge points at their properties in order to charge their EVs at their convenience. The predominant challenge of the industry in respect of that market was product based – designing and creating attractive EVs that consumers wanted to buy. The second wave is focused on consumers who live in flats or rental properties, who do not have the ability to charge their vehicles at home. How the sector responds to capture these consumers and make the switch brings a different set of infrastructural challenges that the first wave did not have to address.

Public charging

The majority of the topical challenges facing the EV industry today fall within the remit of public charging. The government will play an important role in setting the standards which the industry must meet, and it has the opportunity to make a popular public policy win if it can successfully grow the EV industry to match ever greener public attitudes.

One such challenge is the geographic inequality of public charging across the UK. Logically, there is a strong correlation between charging infrastructure coverage and the concentration of EVs within a particular region. Currently, the South and Southeast are relatively well-served with a widespread network of public charge points, particularly in comparison to Wales, Northern England and the Midlands, where the coverage is patchy and the EV uptake is comparatively low. It is worth noting that Birmingham, Bath, Portsmouth and several other cities across the UK have implemented clean air zones, with the majority of the other large UK cities to follow suit by 2023-2024. But in order to successfully implement and promote clean air zones, the charging infrastructure should be a top priority to motivate consumers to reduce emissions and switch. If geographical inequality persists in respect of charging infrastructure, the natural consequence of such inequality may lead to consumer resentment and a negative impact on the EV industry in EV uptake.

The motoring industry body, the Society of Motor Manufacturers and Traders, recognised this in its new seven-point plan, the goal of which is to ensure that every driver in Britain can benefit from an EV charging network that is affordable, available and accessible. The purpose of the plan is to drive collaboration between government, industry and all other stakeholders in calling for mandated targets for infrastructure rollout. This plan is backed by an independent regulator (Ofcharge) to keep consumers at the heart of planning. Despite the efforts from government, local authorities and the charging sector’s implementation of chargers nationally, the UK has struggled to keep pace with EV demand, which accounts for more than one in six new cars in 2021. Billions of pounds have been invested by car manufacturers who have already brought more than 140 models of plug-in cars to market in the UK, with an additional 55 more to be launched this year. A guarantee on infrastructure provisions will no doubt give consumers the confidence to make the switch in even greater numbers.

Mobility and energy sector comparison – challenges and opportunities 

Both the mobility and energy sectors are undergoing transformative change. Old ways of doing things are being challenged and new societal norms are accelerating these sectors to adapt their business models and products. This brings opportunities for mobility and energy to work together to ensure that the UK can reap the environmental and economic benefits of decarbonising transport.

The mobility sector has mobilised at a terrific rate to meet the 2030 pledge by the UK government when the sale of ICE vehicles will stop. As a result of the industry’s innovation, the conversation has changed from products to that of infrastructure. Comparatively, the energy sector must accelerate its trajectory towards cleaner energy and its development of a more digitalised and decentralised system, one that needs to be more connected and customer centric. The opportunity to use EVs as participants in the energy system through technologies (eg, smart charging and vehicle-to-grid (V2G)) represents an innovative opportunity for the energy sector.

The traditional centralised energy system in the UK comprises a simple one-way energy flow (ie, power plant – transmission – distribution system operators – homes) with a dependence on large fossil fuel power plants. A decentralised energy system has multiple inputs, storage capabilities and management mechanisms to deliver energy where it is most needed in the network. It permits opportunities for new low carbon technologies, such as developing a smart grid, integrating wind, solar and CHP directly into the distribution network or installing intelligent energy storage systems, while the demand side participation of EV charging and V2G capabilities bring opportunities for increased consumer engagement.

The National Grid FES Steady Progression Scenario in 2019 predicted that EVs will increase the overall annual demand for electricity by up to 15%. Increased demand for electricity at peak times will need to be managed to prevent the engagement of fossil-fuelled power stations. Despite this, EVs are a potentially flexible energy resource as charging can be turned up or down centrally in a smart system while dually having the ability to provide mobile electricity storage that can be used to provide V2G energy services. The same study predicted that EV charging could add 20% to peak energy demand by 2050. If left unmanaged, distribution networks would need significant investment to upgrade the transmission and distribution system, the cost of which will likely be passed on to consumers through their energy bill. These impacts can be reduced if EV charging is managed by routinely charging cars when demand is low, when excess renewable energy is available through smart charging and by putting energy stored in car batteries back on to the grid to help meet demand via V2G.

Despite a general awareness of the potential benefits of smart charging and V2G, the technical, regulatory and commercial elements required to establish it are not in place. Currently only a few models are V2G compatible such as the Nissan Leaf and Mitsubishi Outlander. However, V2G’s infancy comes from the lack of a market mechanism for selling energy back to the grid in this way. Technical trials are underway to attempt to quantify the commercial benefits of selling energy back to the network, most notably by the green energy disruptor Octopus Energy. Technical challenges are also faced in the degradation of batteries by frequent two-way energy transfers that may potentially diminish the value of customers’ vehicles. Nevertheless, the benefits of an intelligent and pervasive V2G network are promising in combatting the increased energy demands of the UK as the EV market share grows.

What does the future of charging look like?

Looking to the future, there are some exciting ideas and opportunities to meet the challenge of a comprehensive public charging network.

Judging by the pace at which autonomous vehicles have been developed – in some jurisdictions and cities they are already legalised, such as in Milton Keynes or most notably in California, where their inception and development is headquartered – it is clear that by the end of the decade autonomous vehicles will be on the road. One idea associated with autonomous vehicles is the Common Charging Port (CCP). A CCP is a hub where EVs can dock and charge with the benefits of smart charging technology and act as a collective V2G storage centre. The idea is that your autonomous EV will arrive at your door at the agreed time from the CCP where it is registered. You then go about your day using your autonomous EV and once you no longer have need of it, you send it back to the CCP until you require it once again.

Another alternative to traditional EV charging is the fit out of underground car parks with charging robots. This idea centres on the fact that a lot of people who live in cities live in blocks of flats that contain underground parking. The mobile charging robot will enable these people to charge their cars without any human interaction required. The robot will communicate either directly to the EV via vehicle-to-everything (otherwise known as V2X) communication or by human commencement via an app. The mobile robot then autonomously drives itself to the vehicle that needs charging, opens the charging socket flap and connects a mobile energy storage device to charge the EV. Upon delivering the desired amount of charge, the robot then moves on to the next EV in the carpark. Is this too futuristic? The answer is no, not really. Although this technology is not widespread, it does exist and a number of private underground car parks across Europe already have this facility. The technology provides an innovative means for second-wave consumers to charge their EVs. The ability to fully automate the process is an exciting possibility for the future.

The electrification of trucks brings its own unique challenges as the electricity required to power heavy goods vehicles is substantial. One proposal is to electrify roads to allow electric HGVs to continuously charge as they are being driven. Although to some this may seem like a vision from the future, manufacturers such as Scania, Volvo and Daimler are working together alongside the governments of Germany, Italy and Sweden to trial a network of electrified roads capable of charging HGVs. While on the electrified motorways, HGVs will enter the eHighway lane, raise their pantograph (similar to a tram) and connect to the contact line. Energy will then transfer directly to the electric motor. The conclusions from these projects could see electric roads as one of several promising technologies that can give long-haul transport a sustainable future.

Tom Atkin-Willoughby is a trainee solicitor at Shoosmiths.