Figures signpost a fast-growing market
Cooling sales growth and negative media stories have combined to leave the electric vehicle market in a somewhat beleaguered state.
The sales dip is unsurprising, says investor Muge Ponte, considering that higher inflation and interest rates have affected every aspect of EV ownership cost – from the vehicle cost and financing to fuel and ongoing maintenance.
Ponte, the former Head of Corporate Development at Chargepoint, believes electrification momentum will resume as interest rates subside. Meanwhile, she notes that 15 to 25% of new vehicles hitting the road globally are electric: “These are really amazing figures.”
As for the UK position, the incoming Labour government has pledged to restore the ban on new petrol and diesel vehicle sales to 2030, after the previous administration pushed it back to 2035.
Even under the 2035 plan, OEMs had still been obliged to increase the annual percentage of new electric vehicles, on pain of financial penalties.
“Already this is kick-starting activity for the OEMs to further drive the penetration of EVs in the UK and across Europe,” says Ian Johnston, CEO of Osprey Charging.
“In the last few months we’ve seen a number of OEMs launching or returning to 0% finance for new electric vehicles,” he adds. Despite the headlines, he says, “the facts are very positive”.
Tech advances to counter charge anxiety
Received wisdom suggests ‘range anxiety’ is another factor limiting the embrace of EVs. However, Sai Shivareddy, CEO at Nyobolt, points out that range is not a consideration for petrol or diesel drivers, even if they set out with a near-empty tank.
Shivareddy prefers the term ‘charge anxiety’. His company aims to address this by finding ways to improve the rate at which EV batteries can be charged, without encountering problems of degradation and safety.
“The way we address that is by designing new materials that do not degrade as you put a lot of power in,” he says.
“Smaller, higher power batteries allow you to get slightly more range, but also address the sort of experience people need to have. And that behavior change, I believe, is actually one of the biggest barriers to adoption.”
“Smaller, higher power batteries allow you to get slightly more range, but also address the sort of experience people need to have.”
Sai Shivareddy, CEO, Nyobolt
Reducing battery size is important too, says Shivareddy, since current battery sizes demand a disproportionate amount of mining energy. He believes governments should incentivize efficiency in battery technology.
UK’s charging infrastructure is flourishing
There is another big reason for charge anxiety to be on the wane. The UK’s public charging infrastructure is now much more widespread, having increased by 47% over the past year.
Quality and reliability has also improved, as early adopters have been replaced by major businesses, says Johnston. “There’s a real ramp-up in deployment now,” he says. “Compared to two years ago, it’s a different universe, in terms of the provision and the risk of charge anxiety out in the UK today.”
Commercial vehicles are also making big headway towards electrification. First Bus, for example, has accelerated its investment in electrification, with 800 vehicles – 18% of its fleet – set to be EV over the next two years.
By building out its in-house capacity, the company is not only transforming its own operations, but setting up partnerships to allow other companies, such as DPD and Openreach, to charge their own vehicles. It has also opened up its Cornwall charging facility to public use.
“Four years ago we were a bus company operating diesel buses,” says Managing Director, Janette Bell. “Now we’re a B2B and B2C charger, we’re in a joint venture looking at batteries, and we’re out there thinking about how we’re going to play a part in the EV value chain.”
“Four years ago we were a bus company operating diesel buses. Now we’re out there thinking about how we’re going to play a part in the EV value chain.”
Janette Bell, First Bus Managing Director, FirstGroup plc
Software mastery is among keys to success
Software is a critical element of the developing space, particularly for public charging spaces.
Standardized protocols are rapidly enabling a more seamless experience for drivers as they find a car park, log on and make payments, says Ponte: “When you look at investments in the EV charging software space, you find a disaggregation of softwares that are getting together as we go along.”
“When you look at investments in the EV charging software space, you find a disaggregation of softwares that are getting together as we go along.”
Muge Ponte, Investor and former Chargepoint Head of Corporate Development
Osprey Charging has invested in its own software platform, which is now providing up to half of its weekly revenues, says Johnston.
“That means whether you’re in a Tesla or a Volkswagen, or whether you’re using a fleet card or your credit card, we can take your money, we can transact and serve you,” he says.
Technology expertise, together with the ability to deliver grid connections and provide good customer service, will determine the winners in the developing UK charging infrastructure network, Johnston believes.
He sees huge opportunity for investors too: “The market for electric cars is growing 40% year on year. So despite all the hard work so far, we’re just at the beginning,” he says. “From an investment perspective, there’s so much opportunity still to be had.”
“Despite all the hard work so far, we’re just at the beginning. From an investment perspective, there’s so much opportunity still to be had.”
Ian Johnston, CEO, Osprey Charging
