Vehicle electrification: the infrastructure tipping point

Collaboration is needed to accelerate the pace of change in vehicle infrastructure provision With the 2030 vehicle electrification date fast approaching, the hot topic is whether the infrastructure to support the switch to electric vehicles is being developed at a sufficient pace, and if not, why not? There have been a number of major developments in EV charging infrastructure in the UK as of late. Take Gridserve’s upgrade and expansion of the electric highway and the roll-out of its Electric Forecourt model, for example, or Pod Point’s network of destination chargers, installed across Tesco stores, and BP Pulse’s growing network of rapid and destination chargers.  Barriers to adoption Despite these success stories, the UK still lacks the comprehensive infrastructure network needed to support general EV adoption. Even in large towns, whether you can access working EV charging infrastructure can be hit and miss. The majority of EV drivers rely heavily on home charging, community charging, or certain businesses which have decided to offer charging as a value-add service to customers and employees. One of the biggest barriers to the development of EV charging infrastructure is demand. Wait times for new vehicles, perceptions around cost (particularly given cost-of-living pressures) and issues around charging infrastructure connectivity across different charge point operators are affecting uptake. Demand also has an affect on the availability of funding as well as the lack of predictable revenue streams, which presents a real obstacle to unlocking the debt funding needed for widespread deployment. While this might paint a relatively bleak future for EV charging in the UK, the market has been moving forward despite these challenges. Infrastructure is being developed in anticipation of future demand and/or as part of future-proofing business models such as in the context of destination charging. Innovators are creating new funding models – from utilisation-linked loans to more bespoke models that once proven will be replicated. In fact, according to Zap-Map, at the end of December 2022 there were 37,261 EV charging points across the UK. This is a 31% increase in the total number of charging devices since December 2021. However, the UK could be at a tipping point as it tries to achieve energy security and weather the cost-of-living crisis. Competing priorities could see the development of EV charging infrastructure drop down the priority list.  Finding a solution The question, therefore, is what measures are needed to stop this from happening? There is no one simple solution – regulation, central government, local authorities and businesses all have a part to play. ESG is at the top of the agenda and is driving a rise in green buildings. In turn, landlords and investors are under pressure from businesses to support green infrastructure. Despite this, a major survey of EV drivers carried out by the Department for Business, Energy and Industrial Strategy found only 19% of respondents currently use a dedicated chargepoint owned by their workplace, while 37% said the reason they do not use workplace charging is because their workplace does not have a charging facility. There is a real opportunity here for businesses to take the lead and play a pivotal role in increasing the availability of EV charging.  While the capex investment might be offputting to some, this can be balanced by the business positives, including increased demand and green premium rents for landlords and investors, and increased market opportunities alongside employee retention and attraction for tenants.  The EV charging requirements which came into force in England as of June 2022 (as part of the overhaul of the country’s building regulations) were designed to ensure adequate EV charging infrastructure is provided as part of new office developments and through retrofitting existing commercial buildings. However, with a minimum requirement (where there are more than 10 parking spaces) of one charge point and cable routes for one in five spaces (and no requirement to install active charge points into covered car parks) it could be argued the regulations do not go far enough.  While many property developers will see the growing demand for green buildings with green infrastructure as an incentive to exceed minimum requirements, the question is by how much? And will this delivery then increase the EV infrastructure we need? If we are to become a nation of EV drivers, then shouldn’t every parking space have a charge point? Should that be the baseline for new and retrofit buildings, which is then reflected in regulations?  Local authorities also have a vital role to play in deploying EV infrastructure in towns and cities. However, the pressures of budgets, time constraints and the need for specialist knowledge has meant development has been slow to progress. In an effort to boost the market, £10m was awarded to nine local authorities as part of the Local Electric Vehicle Infrastructure pilot scheme, but deployment is still not at the level needed. To truly upscale, alongside mechanisms like the LEVI scheme, further private and public sector collaboration is needed to bridge the skills and knowledge gap and bring the additional private sector funding to the table, which will enable the development of those large-scale charging schemes.  Collaboration is a big part of solving the EV charging infrastructure challenge; collaboration to get the right regulation and legislation in place to drive a change of pace in deployment, to unlock funding models, to bring together expertise and knowledge, and to create truly accessible infrastructure. However, alongside collaboration there is the need for education and myth-busting, as well as a change of mindset to help increase consumer (and with it, investor) appetite. If we can achieve this, it won’t be long before the environmental, practical, security and economic advantages of EVs will drive a full-scale transition away from internal combustion engine cars and their legacy infrastructure.  Matthew Grimwood is a partner at TLT LLP Image © Kindel Media/Pexels