25 February 2022
Richard Bartlett-Rawlings, partner and automotive manufacturing specialist at RSM UK, comments: ‘Despite UK car production falling by 20.1 per cent in January 2022 in comparison to January 2021, the 37.6 per cent uplift in electric vehicle production is promising, with this latest surge demonstrating the direction of travel for automotive manufacturers and consumers.
‘However, despite ambitious UK net zero targets, the sector is still facing a chicken and egg situation. Demand will drive commercial investment but without incentives and significant investment in widespread infrastructure to allay range anxiety, then many consumers won’t take the leap to EVs.
‘In addition, the government has removed subsidies to encourage consumers to go electric and is relying on tax benefits to drive behaviour; but salary sacrifice is a luxury for higher earners – making EVs less attainable for all.
‘Particularly when the high-speed charging points are few and far between in certain areas of the UK, so people need to charge their vehicles at home. Soaring energy costs, on-street parking and limited public charging points near properties all pose a serious barrier for consumers. Plus, ongoing price inflation as manufacturers need to offset rising input costs from materials, energy and staff may price a lot of consumers out of this market.
‘It will be interesting to see if the Chancellor uses the Spring Budget to announce the government’s commitment to a comprehensive charging infrastructure rollout and much-needed reform of the current incentive model to bridge the gap, so consumers and manufacturers can fully commit to EVs.
‘The move towards EVs does pose an interesting question. When consumers’ heating, household appliances and cars all rely on electricity, what happens if the lights go out? Soaring energy prices, global political instability and a move towards renewable energy all highlight the vulnerability of putting all our eggs in one basket.’