Policy gaps stifling profitability of digital revolution for clean transport
A new report from think tank The Green Alliance has warned that policy gaps and the uncertainty of Brexit is halting investment from manufacturers into the "new competitiveness frontier" of smart technology for electric vehicles (EVs), which risks pushing the UK's net-zero emissions goal out of reach.
The Green Alliance’s Tech Task Force has published the first in a series of industrial sector studies exploring how technology can create profitability as part of the low-carbon transition.
The first report, focusing on EVs, warns that gaps in transport policy have seen other European nations and China surge ahead in creating economic boons from the “new competitiveness frontier” of digital technologies. Coupled with Brexit uncertainty, this is pushing manufacturers to take their investment elsewhere.
The Green Alliance’s senior policy analyst Caterina Brandmayr said: “If the UK is to avoid losing the edge in the clean transport market, the government must act urgently to support the uptake of EVs and low carbon mobility.
“It has invested considerable resources in research and development in this area but this is only one side of the equation: there’s limited policy yet to help this innovation translate into greener, more efficient transport systems across the UK or global opportunities for UK businesses.”
With global sales of EVs set to increase 14-fold by 2030, mobility services and tech solutions that streamline operations and manufacturing in the sector are a key area of development. In fact, profits from new mobility services are predicted to overtake those from car sales by 80% by 2030.
The report notes that technologies such as smart sensors and big data will enable EVs to integrate better with existing infrastructure and public transport, cutting traffic and improving air quality as a result. Predictive maintenance data and tests will also help to maximise vehicle use and extend their life, as well as optimising fleet management.
It also added that technology can help future-proof UK supply chains to EV manufacturing, noting that material input prices rose by 80% between 2004 and 2018. This would largely focus on digital EV battery reprocessing, which would create a second life for EV components. Up to half of UK cobalt demand, for example, could be met from used EV batteries.
However, the report calls for more ambitious policies to be introduced, both in the UK and across Europe, to act as market signals that boost uptake. An earlier ban across EU countries on petrol and diesel vehicles, for example, could spur demand for more than eight million EVs, according to the report.
“Funding for R&D alone is not enough,” the report states. “To make the UK a world leader in the future of mobility, the government needs to…accelerate uptake of EVs and realising their value to a smart energy system. This should include policy to actively support EV and battery manufacturing in the UK and a zero-emissions-vehicle mandate, with sales targets rising to all vehicle sales by 2030; policy to promote digitally enabled battery reprocessing; and new regulation so EVs can provide flexibility to the grid.”
The demand for EVs is seemingly strong, with almost nine in ten UK fleet managers planning to switch the majority of their diesel and petrol vehicles with fully electric or hybrid EVs before 2028.
However, the Department for Transport has identified a lack of charging infrastructure, distance travelled per charge and vehicle cost as the three biggest barriers to EV adoption in the UK.