Electric Vehicles: Transition by 2030

Alex Sobel Excerpts

Thursday 9th December 2021 Westminster Hall

[Alex Sobel (Leeds North West) (Lab/Co-op)]

It is a pleasure to serve under you in the Chair, Mr Twigg. I refer to my entry in the Register of Members’ Financial Interests. I thank the hon. Member for Bath (Wera Hobhouse) for securing this important debate in our transition to net zero.

I want to start by talking about a significant zero-emissions capability. When defining that capability, the Government must look to the spirit of their decision to phase out the sale of new petrol and diesel vehicles from 2030. Any vehicle that does not have the ability to run continuously, creating zero emissions, for a meaningful range is predominantly an internal combustion engine vehicle. To continue to allow the sale of such vehicles after 2030 is contrary to the Government’s own decision. Therefore, only vehicles with a chargeable battery and a plug should be included, not mild hybrids.

The only suitable metric to measure that is miles of continuous zero-emission range, which should be set at a minimum of 100 miles, to ensure that consumers realistically make journeys on electric miles. There is no fundamental technological barrier that impedes plug-in hybrids from delivering higher ranges today. It is merely how to optimise the battery size of a plug-in hybrid electric vehicle—or PHEV—to comply with today’s CO₂ regulations.

We also need a zero-emission vehicle mandate, which is a target placed on car manufacturers to ensure a certain percentage of vehicles are zero-emission vehicles. Of course, the definition of that mandate is extremely important. California has had a working version of such a mandate and has in fact had a ratchet mechanism to get more lower carbon vehicles on to the road since 1990.

In the pure form of a ZEV, only vehicles capable of zero-tailpipe emissions should be included, so battery electric or hydrogen fuel cell vehicles, but, from a more pragmatic standpoint, plug-in hybrid vehicles could be included, but given a value reflective of how far they can drive on zero emissions. California includes BEVs—battery electric vehicles—PHEVs and hydrogen fuel cell vehicles. If 20% of a vehicle’s stated range is electric, it should be a awarded a 20% value. That would be a reasonable level in the mandate.

How should that work in the UK? In simple terms, there is a crediting system within a ZEV mandate that attributes different credit values to different types of vehicles and, for the longest range vehicles, a super credit. The California mandate and the China mandate offer four times and six times for the longest range electric vehicles. As the UK looks at the design, we should learn from the others and not use super credits, as large super credits just lead to a surplus of credits and a dilution of the targets and therefore vehicles on the road.

There should, of course, be a reward for innovation that drives longer range and more efficient vehicles—the hon. Member for Rushcliffe (Ruth Edwards) explained that better than I could—and we need to ensure that vehicles produced have a meaningful range so people will want to replace their diesel or petrol cars with an electric one. However, we should cap the maximum credit value at more than one credit but not as high as two credits. The average EV should receive one credit, which today is around 250 miles. That average can be recalculated annually, to reflect the state of the market and to manage credits.

The Government have announced that the ZEV mandate will start in 2024. Any target will need to be ambitious, yet achievable. Looking at the industry’s own projections, SMMT figures for its high uptake scenario for 2024 are around 35% of zero-emissions vehicle sales in that year. The industry could meet that target, but it needs incentives. Funnily enough, it happens to roughly correlate to the Climate Change Committee’s figure for 2024. That Committee recommends that 50% of new sales should be zero-emissions vehicles in 2025, meaning a steep gradient in the Government’s mandate.

A zero-emissions vehicle mandate is a supply-side tool, but a fleet mandate is the demand-side tool. The Government could look to create a fleet mandate to ensure that there are targets for fleet vehicles. The sector is around 55% of the marketplace in the UK and provides an important feeder to the second and third-hand market. Given that there is a favourable taxation treatment for this marketplace, a mandate could help drive uptake. The fleet mandate would need to be significantly higher than the zero-emissions vehicle mandate. We need to remember that fleet vehicles enter the used-vehicle market three to five years after becoming fleet. It will mean affordable, zero-emissions vehicles by 2030. My hon. Friend the Member for Vauxhall (Florence Eshalomi) touched on affordability. Everybody should be able to afford a zero-emissions vehicle by 2030.

On charging infrastructure, the Government have announced some significant funding to remove the barrier of connection costs. The charging points all need to work, though. This £950 million rapid charging fund is for strategic roads and motorway service stations, but it has yet to be rolled out. Connection costs is an issue at these locations, but the same issues exist everywhere. The Government can do more. For example, more can be done with our existing policy mechanisms without further grants from Government. One example is the renewable transport fuel obligation. The UK is falling behind other European nations when it comes to using this policy to drive down transport emissions.

The renewable transport fuel obligation seeks to reduce emissions from transport fuels and many other countries have already reformed their versions to provide revenue generation for a struggling charging sector. European nations have their versions of the RTFO, and California has a similar instrument called the low carbon fuel standard. The key difference is that Holland, Germany and soon the whole of Europe allow renewable electricity use in vehicles to count towards these reduction targets, as does the low carbon fuel standard. I call for the Minister to look at changing the RTFO, because it will drive that infrastructure through to renewable electricity production.

I will finish by talking about plug-in grants. The price gap between zero-emissions vehicles and internal combustion engines continues to reduce, but there is still a significant differential. Many people are asking for an extension to the plug-in car grant. I would support that, but I ask the Government to also look at an alternative: the bonus-malus. The operation of a malus or levy is placed on the purchase of new fossil-fuel vehicles, and this is used to fund a bonus or grant for zero-emissions vehicles, meaning that it is neutral for the Government and does not require state funding.