Global EV Transportation Review

In March 2022, the UK government committed £1.6 billion under its ‘Taking Charge’ strategy. About £450 million worth of outlay was set aside for the LEVI fund, with an initial £10 million pilot scheme and £50 million for staff funding. There is also a £950 million Rapid Charging Fund to support the roll-out of planned 6,000 odd fast-charging network points across motorways by 2035.

In January 2023, the government and the energy regulatory authority issued a plan to develop and facilitate smart charging as a key sub-segment. The aim is to enable and unlock the potential benefits from smart charging systems, such as allowing stored energy of the vehicles to power the homes, or disparate electric discharging units such as a lamppost to be capable of charging and selling the power back to grid at appropriate pricing. To this end, a £16 million funding allocation was done to promote innovative smart charging projects.

A new regulatory framework will be rolled out, to build upon the previous directive (as of July 2022) for all new private charging points to incorporate smart charging capabilities. The launch of the plan document also saw funding extended to entities for notable projects including Otaski Energy Solutions (£229,000 for smart streetlights), V2X-Flex (£220,000 for prototype software and business model involving bi-directional chargers), and BEVScan (£165,000 for tool monitoring the battery degradation and suggesting optimization).

The funding extended to various demonstration projects is based on the overall outlay available under the £1 billion Net Zero Innovation Portfolio. Over £3.2 million will be disbursed through the first phase of V2X Innovation programme to develop hardware, software, and the business models critical for the smart charging systems.

The government’s planned ban on sale of new petrol and diesel vehicles by 2030 acts as a major push for reinforcing the business case for electric vehicles. For heavy goods vehicles, the timeline is 2040. For automotive manufacturers, there is a visible anticipated demand scenario. Added support is there from select policy initiatives. There is, for instance, a £600 million backing from the UK Export Finance to facilitate expansion of Ford Motor’s electric vehicle product range at Essex and Merseyside plants. Notably, for the year ending 2022, the UK’s automotive industry’s electric vehicle production was at a record high and contrasted against the slump in overall production statistics.

Most of the opportunity in electric vehicle market is also dependent on getting the charging network in place. With stated policy support, private investment has a key role in expanding the charging network reach. Some of the major enterprises have thus made significant commitments to tap into the opportunity. In March 2022, the oil and gas product major BP announced £1 billion investment in the UK’s charging infrastructure space. The planned investment is to be undertaken under the venture of BP Pulse, part of BP’s Integrated UK Business portfolio. Other entities are similarly directing investments, especially for the rapid charging sub-segment.

A promising but nascent and untested sub-segment of electric vehicle charging realm is the wireless or inductive charging technology. Barring isolated and limited-scale tests, the technology remains at a demonstrative and proof-of-concept stage. In the UK, one such trial started in October 2021, at Marlow, Buckinghamshire, involving charging operator (Char.gy), car rental network (hiyacar), Milton Keynes Council, Buckinghamshire Council and the Open University. The results of the ongoing study could potentially set the stage of next round of investments.

Gigafactory investment in the UK has somewhat lagged behind other leading global markets of the US and European region. Presently, there is one 38GWh plant in the pipeline, by Britishvolt, for a planned investment of £3.8 billion. In 2022, the project had £100 million worth of government backing, to be disbursed upon construction progress. As of November 2022, the company announced securing short-term private funding support to sustain its development activities. The latest round of fundraising was of critical importance for this venture, as rising interest rates and an anticipated slowdown impacted most of the fundraisings.

Additional local battery capacity could come onstream through expansion underway. The Automotive Energy Supply Corporation (AESC) – a joint venture between Nissan Motor, NEC Corporation, and NEC Tokin Corporation, is in the process of expanding its existing 2GWh capacity at Sunderland to 6GWh by 2030. Separately, AESC also commenced development work for a 12GWh plant at the same location, aiming a commissioning schedule of 2025.

At a policy level, the UK government is seeking at ways to improve the investor sentiment for battery manufacturing and related technology development. In October 2022, the government committed to £211 million of funding towards battery research and innovation, to be valid till 2025. The proposed funding will be under the ‘Faraday Battery Challenge’ scheme that was introduced in 2018. Notably, the Faraday Institution suggested a requirement of seven Gigafactories by 2040.