The rise of electric vehicles is an opportunity to be seized

COMMENT: There has been much excitement about driverless cars, drone delivery and travel and, for a number of years, electric vehicles (EVs). With the announcement that the UK will bring forward the date set to bring an end to the sale of new petrol and diesel vehicles, including hybrids, to 2035, it’s time to wake up to EVs and the charging infrastructure that supports them. Where are we now? The uptake of EVs so far has been small, but it is expanding year on year. Despite an increase in uptake, only 2% of new car sales in the UK are purely electric vehicles, which means that a significant shift in consumer behaviour will be required to prepare for the 2035 target. Obstacles to purchasing EVs, such as “range anxiety” – the distrust in EVs to capably travel from A to B – have had a negative effect on sales. Additionally, the availability of charging points has contributed to worries over EV supporting equipment. In recognition of this, last year the UK government pledged nearly £40m to the development of EV charging technology. Where are we going? More and more manufacturers are contributing to the EV market, which gives consumers the much-desired variety of choice and, in theory, price. Sustainability has become a buzzword for modern living as countries aim to tackle the effects of climate change. The UK, for example, is committed to being net carbon zero by 2050 (with the EU set to follow suit), and part of this is the revised 2035 end date for new petrol, diesel and hybrid car sales. This means a change not only in vehicle type but, more importantly, in the infrastructure that surrounds the vehicles. The number of charging points will have to increase to meet the growth of, and indeed mandate for, EV usage. On 21 January, the UK government announced double funding for the installation of EV charging points on residential streets. More innovative is the £3.4m trial of wireless charging technology announced on 17 January, which will see a partnership between universities, local government and business. The trial tests superfast wireless street-level charging pads under taxi ranks, which will enable taxis to charge while they wait for customers and will bring new opportunities for mobility, access and, importantly, real estate. How will all of this affect real estate? The decarbonisation of society will bring with it ramifications for the built environment. While sustainability has for some time been a factor for new buildings, the transition from petrol and diesel vehicles to EVs will have an impact on landlords, tenants and planners. The UK wireless charging trial could provide an indication of options available for the industry. If, for example, the charging pads yield the desired outcomes, this could free up real estate that houses the “traditional” wired up charging points. Property owners can become involved in the push to provide charging infrastructure for EVs. The UK will develop regulations that require charging points to be built into new developments that fulfil certain criteria. Beyond legal obligation, landlords could benefit economically, for example from the collection of user fees, increased footfall and the adoption of different tariffs to cater to different users. Local authorities, electricity companies and private landlords will all be involved in the locating, funding, construction and operation of such charging spaces. Whether charging pad or wire charging, infrastructure around the demand for EV charging will bring about a wealth of opportunities. By providing tenant charging facilities, landlords will look to future-proof their portfolios for the inevitable need for charging points. The trial for charging pads is one example of increased government interest in EVs and the charging infrastructure necessary to meet sustainability goals. Government action will help to reduce the risk of fragmented development and provide the resources for the construction of charging points and the necessary electricity network changes. Private enterprise in the development of charging technologies, as with EVs themselves, will be crucial in finding solutions to the immense demand as transport becomes cleaner. Landowners and those involved in real estate will be faced with opportunities to develop, contribute to and benefit economically from a cleaner environment in which to live and work. Daniel Norris is a partner at Hogan Lovells