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Global EV Transportation Review

Key Regional Markets

United Kingdom

The UK automotive market’s growth trend is shaped by a consistent demand shift in favour of electric vehicles. For good measure, the policy target helped set the narrative. By 2030, the sale of new petrol and diesel vehicle is banned. Further, by 2035, all new cars and vans are expected to be zero emission at the tailpipe. The growth achieved thus far, while impressive, is still behind potential. Much more is required on the supply-side, through enabling incentives for manufacturers and the rapid buildout in charging infrastructure. Securing timely private investments will be the key to realizing opportunities.

GDP (Current Prices) USD (2021)

2,758.87 bn

GDP Growth Forecast (constant prices) (2021-2025)


EV Penetration

16.6% (battery electric) of the total new passenger vehicle registrations in 2022

EV Target

All new vehicles sales (cars and vans) to be zero emission by 2035

Planned Year of Phasing Out ICE Vehicles


GDP Source: IMF, World Economic Outlook

EV Penetration and Trend

*As of January 2023
Source: Zap Map (attributed to SMMT)

The sale of electric vehicles, including battery electric and plug- in hybrid (PHEV), reached record level in the UK by the end of 2022. Such growth contrasted the 2% decline in the total vehicle sales during the year. The automotive industry’s growth is, in effect, led by the transition to electrification. While the supply chain and related issues plague the industry, the electric vehicle sales maintained its pace. It is expected that the supply-side challenges could abate progressively, especially in terms of sourcing of semiconductors. The growth achieved, in such a backdrop, could be an understated one.

*As of January 2023
Source: Zap Map (attributed to SMMT)

While the offtake has risen for both battery and plug-in modes, the trend shows the shift in favour of battery electric drivetrain in the passenger vehicle registrations. Between 2019 and 2022, the share of such vehicles rose 10-fold. Notably, as the estimates from the Society of Motors Manufacturers and Traders (SMMT) indicate, fleets and business buyers play an increasing important role – contributing two- thirds of the registrations in 2022. This could partly explain how electric vehicles sales during 2022 outstripped new diesel vehicles for the first time in the UK. The private purchase of electric vehicles is likely to be under pressure from the continued inflationary pressure and the gradual scaling down of the subsidies. The lag in charging network adds to the private buyers’ doubts.

Though slow, but gradually the pre-owned vehicles’ market is shaping up for the electric transport. In 2021, as the UK government records indicate, about 3% of the pre-owned vehicle transactions were based on hybrid, plug-ins or battery electric transport. With fleet operators contributing to the lion’s share in total vehicle offtake, the rising electric vehicle adoption in transport fleets is likely to feed into the pre-owned vehicle market in successive years.

Charging Infrastructure

Source: Zap Map (attributed to SMMT)

The charging network registered a 30% year-one-year growth by the end of 2022. The step-up in the expansion is coming in at a right time, as the transportation system must adhere to the set targets for zero emission operations. The growth in battery electric passenger vehicles and the incentives on offer gave charging operator companies sufficient impetus for the growth. Yet, getting the scale in time is a challenge alike for the policymakers and network operators. The UK’s multiple local authorities have a scope to add charging points manifold but have been unable to, either for lack of conducive norms or other challenges.

The expansion of the charging infrastructure is progressively favouring the fast-charging segments. As of end-2022, the fast-charging network had a higher year-on-year growth (33%) than the slow ones (24%). The ultra-rapid charging segment reported an 80% growth during the year, though such a spike is reflective of its low initial base. Rapid and ultra-rapid charging points are critical for the en-route locations (motorway service areas, service stations, electric forecourts and ferry terminals). As of January 2023, the share of en-route charging points was just 6% of total installed base, which can be related to the low reach of rapid charging capacity base. In contrast, about half of the public charging capacity constitutes as the destination chargers, referring to those located only in residential streets.

Source: Department of Transport, UK government

The network reach is also unevenly distributed, with most of the charging operators and other entities choosing the most appropriate locations for installation. While the average network reach for the UK as a whole is 55 per 100,000, the same for London and Scotland is 131 and 69 respectively. The lowest charging provision is found in Northern Ireland (19 per 100,000), followed by the North West (31) and Yorkshire and the Humber (36). The inference about the skewed network must be done in the context of the ownership mode followed. The charging infrastructure growth in the UK has been largely funded by private investment, aided with grants from the Office for Zero Emission Vehicles (OZEV). While the government too has been part of this, its share has been a minimal one.

Policy Regulation

The country’s policy and regulatory framework of incentivizing the passenger electric vehicles ended by mid-June 2022. This was effective for the newly purchased passenger vehicles, even as applications received before this date stand eligible for the subsidy support. The policy reasoning is that the sales of the vehicles have grown despite successive rationalization of subsidies, which is indicative of resilient market demand. The emphasis is thus on re-orienting subsidies towards other areas such as charging, among others. At the same time, the subsidy budget (around £300 million) continues to be available for the purchase of electric vans, taxis and motorbikes.

For the charging infrastructure, policy-level funding (to supplement private funding) has been directed through various mechanisms and channels. Under the Electric Vehicle Chargepoint Grant (EVCG), 75% of the charging point installation cost in domestic properties is made available. Since April 2022, EVCG replaced the Electric Vehicle Homecharge Scheme. Then, there is On-street Residential Chargepoint Scheme (ORCS) for grant-based funding to local authorities to install the on-street residential charging points. A voucher-based scheme is available under the Workplace Charging Scheme (WCS) for upfront costs associated with purchase and installation. WCS is meant for eligible businesses, charities and public sector organizations. Lastly, there is the Local Electric Vehicle Infrastructure (LEVI) to facilitate the charging infrastructure projects undertaken by the local authorities that could help secure private investments for network expansion.

Company Planned Investment
Shell 5,000 rapid and ultra-rapid electric vehicle charging points on forecourts by 2025
Motor Fuel Group £400 million for installing 2,800 high-powered (150kW and 350 kW) charging points at 500 locations by 2030
InstaVolt 5,000 charging points by 2024/25 and 10,000 by 2030
GRIDSERVE 5,000 high-powered charging points by 2025. Over £1 billion investment planned across its Electric Hub and Electric Forecourt sites
Osprey £75 million for installation of 150 high-powered charging hubs by 2025
Pivot Power National network of Energy Superhubs. First such project at Oxford will provide up to 50 charging points
Source: UK Government (Infrastructure Strategy, March 2022)

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.

Market Opportunity

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 (, 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.


The policy target of zero emission new vehicle sales (cars and vans) by 2035 involves several interim milestones – such as implementing new regulatory regime in 2024 related to zero emission vehicles for manufacturers, government vehicle fleet to be zero emission by 2027, and ceasing the sale of new petrol and diesel vehicles by 2030. Battery electric and plug-in hybrid vehicles are integral, if not the most important part, of the emerging policy and regulatory framework.

Having placed ambitious goals in transport electrification, the phasing out of the subsidy support may not have been timed appropriately. With such a move, the UK market may stand out as the only one in the European region as bereft of any policy support for the electric drivetrain. The challenges of a high inflationary environment together with supply chain issues restrict the scope of having multiple vehicle models at attractive price points, thus keeping the retail demand subdued.

The country’s electric vehicles and battery manufacturing landscape is not in the reckoning among the top global markets. This was evident in the select few episodes of annulment of major investments, that led to setting up of a government enquiry panel. The near absence of major Gigafactory players is a discernible factor of comparison. The challenges might just get compounded with the enactment of recent US legislation offering upfront incentives for domestic battery and other manufacturing. It will thus be pertinent that the policy framework is re-aligned to set a different narrative, especially one that provides a visibility of the business opportunity ahead.