Vehicle Technology and Aviation Bill – in a Public Bill Committee at 9:37 am on 14 March 2017.
Q We are now going to hear witness evidence from the National Grid, the UK Electric Vehicle Supply Equipment Association and Quentin Willson, who is a motoring journalist. We have until precisely 11.25 am—one hour from now—for this session. Perhaps the witnesses would kindly introduce themselves for the record.
I am Robert Evans. I am chief executive officer of Cenex, which is a specialist research and technology organisation that has been active for ten years in developing supply chain and markets for low-carbon vehicle technologies, including hybrid, electric, hydrogen and gas. Today, I am also representing the UK Electric Vehicle Supply Equipment Association, which is the association of suppliers of charge points and charge point network operators for the UK.
I am Marcus Stewart. I am head of energy insights at National Grid, the system operator. My role is looking out into the future to determine what the energy future will look like in terms of electricity and gas, how people will use their energy and what capacity on the system is needed to support that energy. Electric vehicles are a big part of the future from where we can see it.
As we discovered in the last session, time disappears very quickly. I ask my colleagues on the Committee, and yourselves, the witnesses, to be brief, to the point, sharp and all those things, to try to get through the quite large number of questions we want to ask you in the hour. I apologise: whoever is speaking at 11.25 am will be told to shut up mid-sentence, if necessary, because we have to stop at 11.25 am sharp. [Interruption.] It is unlikely to be me because I can’t tell myself to shut up.
Q Good morning. Do you think there is too much emphasis in the Bill on the battery as a vector for powering electric cars as opposed to the hydrogen fuel cell? Should there be equivalence in the Bill from the Government, so that every time they compel, for instance, a motorway service station provider to provide a plug-in charge point, they should also compel them to provide hydrogen?
I believe hydrogen is too far away yet to get consumers interested in or excited about it. The costs are always going to be higher as a fuel—it would probably have parity with petrol. I believe for consumers to be interested and to take up wider EV adoption, there has to be a fiscal advantage for them. At the moment, you are asking them for too much concentration. If you put hydrogen as a parallel technology now, I think we might disrupt the really good emphasis we have got on EVs at the moment.
Our view is that the UK has not been very successful in introducing alternative fuels into the transport sector; we need to be extremely successful with electricity and that will pave the way for the introduction of hydrogen. We need to make this transition phase work successfully. My own organisation is involved in hydrogen fuel cell trial activities. It is a pre-commercial phase. It is a strategic insurance option for the motor industry and the energy sector, where we are looking at the decarbonisation pathway. We need to have hydrogen, but it is going to proceed through strategic niche markets, and that is going to take a short while yet. The Bill does at least outline the same basis for the treatment of hydrogen as it does for electricity in terms of reserving the right to take powers, should that be necessary.
Where technology is today, electric vehicles are progressing rapidly, and the focus should be on electric vehicles at this time, including the impact they have on the system and how people get access. We can take advantage of that. The technology in some respects is leading the legislation, so we should tackle it from that point of view. As an organisation, we are fuel-agnostic, so hydrogen, compressed natural gas and other sources of renewable fuels should be part of the long-term mix, but electric vehicles are happening now and there is more choice for consumers in that area, so we should be dealing with that at this point.
Q So all three of you believe that the Government should pick a winner at this stage and put their muscle behind that. Does that not run the risk that in time—as you say, this is a pathway to a fuel cell—we will end up with tonnes of useless copper in the ground within a relatively short space of time as people switch to hydrogen refuelling?
I think you can have parallel technologies. The developments that the OEMs—the car manufacturers—are doing on hydrogen and fuel cells, particularly Mercedes, are good, but everyone in the industry concurs that it is possibly 10 years before we get anything like mass production. The speed of electricity is so fast now. The Government should be aware of developments and track them, and they need to understand that there is a parallel technology, but if I was asked to bet on the two horses, I would say that electric is likely to be the mainstream propulsion force over the next 20 years.
Q Hydrogen cars are of course electric—it is about the storage of the electricity.
That is a very good point. Hydrogen fuel cell vehicles are electric vehicles—they just have a different, alternative powertrain as part of the configuration—so progress with electric vehicles is an aid to progress with hydrogen fuel cell vehicles. I do not believe that the Government are picking winners per se. I think that the industry is taking a view that electric vehicles are the future. You see that in all of their announcements. They are bringing these vehicles to market, so the job of the Government is to help facilitate the introduction of that technology for the benefit of motorists.
Q It is not the entire industry. Toyota are not doing that.
Q The Mirai is a fuel cell car.
Q This is my final question. There are some countries who disagree with that. The Dutch are spending a lot of money on a hydrogen fuel network across their whole country, as are the Germans.
The Dutch are not spending as much on hydrogen as they are on electric vehicle infrastructure.
The Dutch are spending considerably more on battery electric vehicles than they are on hydrogen fuel cell vehicles. Governments are spending money on hydrogen fuel cells, but they view it really as a strategic option play. In order to have it available for you in the system, you cannot just start from a standing start. You have to have a level of activity, a level of supply chain development and a level of familiarisation, but that is not to be confused with it being something that will make a significant impact within the next five years, for example. We should track international trends and watch what is going on in projects. We should be supportive, but right now there are some bigger issues to be addressed with electric vehicles. I think we are in good health with hydrogen.
Thank you, Chair. If the Government were to pick a winner at this stage, do we not run the risk of skewing future research and development investment by saying to developers, “The traditional battery is the route we are going down”? If hydrogen is 10 years away, we run the risk of it becoming further away because we are not putting the investment into it now to ensure that technology is comparable in the futureQ .
That is a hard question to answer. If you look at the price of the Toyota Mirai, which is a hydrogen car, it is £60,000. Volume and economies of scale make it an enormously difficult task to get that to a consumer level of £15,000. I think the OEMs will find it very tough to find this fuel technology at a cheap enough price point to make it viable. In terms of commercial vehicles and buses, I think it has a greater resonance, but in terms of consumers, if I were sitting at the board table of BMW, Mercedes, Audi or VW, I would be looking at electrification rather than putting all my eggs on hydrogen.
Q I think that you just hit on the nub of the matter. A board director has major capital investments to protect, which means that they are inclined to stay within trammels once a technology is established. That is very much the point that my hon. Friend the Member for North West Hampshire has been making: there is a danger that we could end up choosing the wrong technology because a whole system of incentives sets up people to stick with electric.
The brutal fact of the matter is that getting hydrogen from point A to point B requires pipework. You can have static hydrogen stations that manufacture it, but they will be the size of shipping containers. If you look down the road, creating infrastructure and points, keeping it cheap and making it not a by-product of refining chlorine are all barriers to entry that are much greater than for electrification, which is simple and understandable; it is a currency that we are familiar with now, and we have the electric network. These are the major barriers to hydrogen uptake.
To follow up on that point, Innovate UK and the Advanced Propulsion Centre are funding research and development projects involving hydrogen fuel cells, and they have done so throughout the period of the low-carbon vehicle innovation platform. The Office for Low Emission Vehicles recently put forward funding for both hydrogen stations and vehicles in deployment.
I think the challenge at the moment is that you could put a very large amount of money on the table and say, “Here’s the money; will you bring the vehicles?”, but the supply of vehicles is very limited. Quantities are still small, as has been explained, and they are very expensive, so the car industry is not looking to flood the market with these vehicles. What we are doing in the UK is being ready for the time when the vehicles will come in larger volumes. We will have a receptive market, and we have infrastructure here in London. What London has done is really positive progress that is viewed as a beacon for how the rest of the UK could be ready to deploy hydrogen fuel cell vehicles when they are ready and cost-effective, and when the supply comes to the UK.
I have a few questions from a pre-selected list. It is probably best to ask about electric charging, to follow on from the discussion. The Government say that electric charging infrastructure makes more sense just now, and that hydrogen is still a wee way off. Can the panel advise what has been learnt today about the required structure of the charging network needed? Will the Bill and the current regime ensure that there will be adequate numbers of charging points in each part of the country?Q
On Second Reading we heard about the gathering of statistics on the current variance in the number of charging points. Orkney, for example, has many more charging points than some big towns in England. Also, is there a need for a uniform way to access charging points? Is the legislation as proposed sufficient for that? I rolled quite a few questions into one.
I am happy to make a start. The first thing to say is that the UK Electric Vehicle Supply Equipment Association and the industry support the progress of the Bill and believe that it is an appropriate set of powers for the Government to seek. As the industry views it, the Bill effectively says that the deployment of electric vehicle infrastructure into the market is progressing. The market is working, and it is likely to deliver the solutions for motorists to access those charge points easily, and for those charge points to become a sustainable asset on which businesses can be built. What the Bill recognises is that there is a stage by which the Government will step away from some of the seeding activities that they have done, in terms of creating different schemes such as Plugged-in Places, national infrastructure programmes and funding that it has put in, and let the market progress.
The Bill gives the Government an insurance policy, which is that they can act if the market does not deliver in any particular important aspect that starts to stall the uptake of electric vehicles. The view is that the market is progressing well, and these are reserve powers that the Government might wish to take later. Therein will lie the detail about what the particular nub of a problem might be on which the Government will need to intervene. At the moment we have 11,000 charge points in the UK; we have a lot of private sector finance investment interested in investing in the commercial operation of charge point networks and the further deployment of charge points. That is to be commended. At this stage the Government just need to have this insurance policy in the Bill so that they can act should they need to, but they should expect that the market will deliver.
The critical thing is the availability of rapid chargers. Rapid chargers are the game changer. You can charge your car within 30 minutes to 80% of its battery life. Therefore, you can do multiple charges in a day, bringing the feasible range from this notional 130 miles for a Nissan LEAF to as much as 300 miles. I did a journey from Birmingham to Milton Keynes and back, charged twice at a rapid charger and arrived at Milton Keynes with 90 miles still on my battery range. So the Bill must make sure that these rapid chargers are rolled out much more and we see many more at motorway service stations and at key points within cities, because they will enable people to believe that their range is much wider than they are led to believe.
I have a follow-up question on the infrastructure for charging points. Does more consideration need to be given in the Bill to connecting with different modes of transport—an intermodal approach? Or is it sufficient just to say, “There shall be charging pointsQ ”?
For example, electric vehicles being able to connect with hubs at airports, railways, ports and so forth. Is enough thought being given to how the network will develop?
We need some intelligence on where these peak points are likely to be. It needs to be spread as widely as possible. Ultimately, the superordinate goal is wireless charging in the roads and as you park. The Bill needs to be aware of that as well. That is a technology that would revolutionise the whole EV market, but it is still some time away. There needs to be a charger in as many places as possible where there is public access—supermarkets, schools, businesses—especially in rural areas.
The evidence we submitted focused on the impact on the electricity system, in terms of capacity and the role of smart charging, and rapid chargers help in that because they help people charge away from peak times. If you have rapid chargers at motorway service stations or supermarkets, where people can charge during the day, rather than charging in the evening at home, that smooths out the impact of the demand for energy. It makes for much more efficient usage of the energy system that we already have and allows us to accommodate more electrical vehicles.
Charging at train stations is a very good idea, because the vehicle is parked there and they can start to be used for managed charging applications—vehicle to grid and the like. That is a very positive trend. There has been national infrastructure funding for railway stations, and that is an appropriate use. With airports, it depends. For long duration, if you are parked for two weeks while away on holiday, it is less of an issue. The rapid charger becomes a more useful item when you pick up your car, quickly fill with electricity and then move on. So more charge points in motorway service areas is definitely a good thing, and more dwell points that aid inter-modal transport, so you take your electric vehicle and get on the train, for example, rather than adding to congestion in a city centre.
I want to ask about the effect of demand on the grid. You dealt with it after I signalled my intention to ask the question, but further to that, does the industry need to think a bit about how it could incentivise people charging at different points? There is a history of this, with Economy 7 and all kinds of other things. Are there ways in which the industry could respond by encouraging people to charge in the way you describe? On the point about the distribution of infrastructure, what about rural areas? The Bill provides powers for the Government to do more. Have we done enough or could we do more to ensure the spread of infrastructure? It is fine to have these things in supermarkets and at motorway service stations, but that does not really help my constituents in Surfleet Seas End or Gedney Drove End, who are a very long way from either. What do you think?Q
Rural charging is an issue that we should look at very hard, because otherwise we will have a disconnected electric community and there will be the connected and the unconnected. Scotland has been extremely good at this—Scottish Enterprise has financed quite a bit of it. We need to look at these rural areas, decide what the best place is and give a concerted route through rural areas where you have rapid chargers so that those communities can run electric cars with the same benefits as people in conurbations.
Going back to the point about how the energy industry can respond, the industry has experience. I am a system operator, but the supply side can offer different tariffs for charging at different times. That is quite a popular approach. You mentioned Economy 7. I know people who have electric vehicles who use the Economy 7 meter to get a cheaper charge by charging their vehicle at a time when the system is under less stress. There are options like that.
Looking further into the future, when you have many more people using electric vehicles, there will be an opportunity for electric vehicles themselves, through some sort of consolidation, to provide services back to the system to enable balancing—“vehicle to grid” is a term that is used. There could be opportunities for suppliers to offer different tariffs to allow people to participate. There are lots of options there. We would say that the technology in the chargers needs to be smart enough to be able to do that. That allows you to optimise the value of the charging system and the car to the consumer, and also the overall cost to the total energy system. If you can optimise that, the total cost will be lower than it would be if you had effectively unabated charging.
You raised two points. The first was about rural areas. At this stage, infrastructure follows the deployment of vehicles. The more vehicles there are, the more there is a case to deploy electric vehicle infrastructure to support them. In rural areas, we have a situation where you often have to travel a long distance to get to a petrol station, because there are fewer and fewer in those areas. That is an example of how charging your electric vehicle at home and occasionally using public charging makes an electric vehicle quite a virtuous vehicle to drive.
On your point about incentivisation on the grid management side—smart charging—we have a progression: the benefit of smart and managed charging is that it mitigates investments that the distribution network operator has to make in copper in the ground, for example. We need to work out how the incentives travel from the beneficiary—the reduced investment on the part of the DNO—through tariffs to the EV driver so that the EV driver is effectively part of the smart charging proposition and we do not have a situation where the smart charging proposition occurs without them being involved in the loop.
Q The essence of your point is that the Bill and the debate that it stimulates will encourage innovation and catalyse the demand management tools that you describe.
The Bill gives the Office for Low Emission Vehicles and other parts of the Government the ability to keep pushing forward discussion and dialogue between the motor industry and the energy sector to ensure that smart charging is part of our future, because it explicitly expresses a desire to regulate should smart charging not proceed. There is a desire to explore this, but the Bill gives the Government powers to help set an agenda that brings the groups together and moves forward the smart charging agenda.
Work is being done in America, notably by Tesla, where consumers charge their cars at smart times and then, when the grid is out of balance, that electricity is sold back to the power companies. These millions of electric cars become energy storage devices. This is another very important cycle of change that we need to look at. Any imbalance would be negated. Also, a lot of electricity is produced by renewables—wind and solar. In the UK, 41% of the electricity dragged from the grid on Christmas day was from renewables.
IfQ , over the next five years, 10% of new vehicles were electric and each of them, on average, did 10,000 km a year, 10,000,000 km per year would be driven in electric vehicles. This is a question for Mr Stewart. What is that as a percentage of UK electricity generation at the moment? You may not be able to reply today, but perhaps you will tell us. I am a bit worried that you will encourage all these electric vehicles and then the grid falls over, so I need to get some idea of proportionality.
I will give you an example. If you have 1 million electric vehicles—you don’t need to worry too much about how many miles they are doing; when they are charging is what is really important, because that is what impacts on the supply and demand balance—and you charge them on a 7 kW charger, in theory that could give you 7 GW of demand, and 7 GW is two and a bit very large nuclear power stations.
Q What percentage is that of total UK demand?
Q That is 12% or 13% of total electricity generation.
If everyone charged at exactly the same time. Studies have shown that behaviours are such that around about 20% charge at the same time. You immediately, without incentivising people, just with normal behaviour, reduce that down to 1.5 GW. If you then apply smart charging incentives, you can reduce that by a further 84%, and that—
Q Hang on—but we still have to generate the electricity. For shorthand, this is just a kind of Economy 7 approach to the issue.
Let’s just look at peak for the moment, and then I will talk about annuals. So you move from 7 GW down to 1.5 GW and to around 400. You can see that, very rapidly, the total system has to deliver a lot less when it is under stress, if you move to a smart world. The system is designed to meet those peaks, so you end up with generation outside those peaks being available. That generation is there to meet the demand you have moved from 6 o’clock in the evening to 8 o’clock in the evening, 10 o’clock or whenever. The electricity system from a pipes point of view and a capacity point of view is designed to meet those very high peaks.
By applying smart charging, you can accommodate a lot of electrical vehicles without necessarily having to increase that overall total capacity at a total system level. If you have clusters of demand at a local level, you would expect there to be local reinforcement to accommodate that—fast charging, for example, can provide heavy loads at certain points on a system, but you would connect that to a slightly higher voltage tier to ensure sufficient capacity. The system has the capability to deal with it if the type of charging is smart. The provisions put forward in the Bill make total sense to us.
Q Do you think that the market will handle it, in terms of a tariff regime that incentivises midnight charging, or do you think that there needs to be regulatory intervention by the legislator—to spread that load, literally?
We have seen in the past that people respond to the incentives of charging tariffs—these natural behaviours where people would plug in—but in the first instance the capability needs to be there. The market then has the opportunity to provide the incentives to do that. I do not think it needs to be fully legislated that you must plug in—
Q No, it is not that. I am saying that one way of doing it is regulation over the power supply and to say that you have got to make these incentives available for midnight charging. Should that be regulatory, to bring it about, or do you think the market will do that?
Q Mr Evans in an earlier answer described the purpose of the Bill being to take reserve powers to allow stepping in to stimulate the right kind of infrastructure where the market does not provide it already. May I press you a little more on what that is, and on whether the Bill is hitting the right target? The stress within the Bill is on the provision of charging infrastructure by what it describes as “large fuel retailers.”
A lot of the discussion we have had so far has been about the importance of having rapid availability of charging points, and sometimes smart charging points, in a much more dispersed area than what might be described as large fuel retailers—typically, the motorway service areas. Is the emphasis on that right? If it is not the right emphasis, do those powers need to be applied more broadly? If those reserved powers are applied more broadly, what safeguards need to be in the Bill to ensure that unreasonable regulatory requirements are not put on a whole dispersed range of potential electricity suppliers?
That is a good point. The powers that we are looking at are primarily around the provision of information to the user, the ability to have smart charging should you need it, and the interoperability. Those sorts of questions are dealt with in the Bill and are key topic areas for the industry. On the question of where infrastructure is located, supermarkets are an interesting one. We have a situation in which not everybody has off-street parking. When one comes to a place such as London, it is not practical to put charging all down London streets. Supermarkets become an extremely practical, pragmatic place for charging to be accessible, along with retail shopping centres, in a crowded city such as London. The consideration of that, along with motorway service areas, which is about allowing people to travel distances across the UK, are two strategic priorities. That is not to say that there are not other areas. The Government have provided incentives for the deployment of infrastructure in other locations and have obviously taken a view that maybe the market can deliver in those locations.
However, technology does exist that would allow you to charge at a street lamp post, although admittedly that could be for slow charging at night. For people who do not have parking within their house and have to rely on the street, this facility could be available on every single lamp post in the UK.
The whole discussion has been predicated on the basis of saving the planet. What about reducing emissions? In the context of automated vehicles and vehicles generally, it is all about their obsolescence, not about sustainability. Given that we have talked about the updating of automated vehicles and the relationship of manufacturers with the end user throughout the duration, are we missing a trick here? Though there is nothing in the Bill that requires software updates, necessarily there will be that relationship.
Should we not be thinking about a new way of using automated and electric vehicles across the piece? Should we be having people owning vehicles, or should we be making the offer for that relationship to be maintained so that it is a sustainable product that can be revisited? At the moment there is going to be an obligation to keep in touch with these automated vehicles for their lifetime. We heard in earlier evidence that there will come a point where that is cut off. Are we talking about an opportunity for a whole new way of using the services provided by an independent, personal mode of transport?
This is the big cycle of change now, like televisions, aeroplanes and the internet. We will see car ownership decline and will be buying or leasing vehicles as a service, not a product. The long-term vision is that this is going to be based largely on electricity and some on fuel-cell, and that we will be calling driverless vehicles on our phones to come and collect us. They will then drive to our destinations in what is known as a green wav; they will be hooked up and connected to junctions, to the road system and to traffic lights. These zero-emission, automated, self-driving cars will drive in platoons and, it is hoped, eliminate congestion and pollution. That is the superordinate goal, which perhaps is as near as 2040. But it will always be powered by electricity. The whole structure of who owns what is changing. As we are seeing with consumer habits now, they are buying cars on personal contract plans; they do not own things anymore. That is what the long-term future looks like.
Beginning with Quentin Willson, we are aware of the 2050 date that the Government have for all cars and vans to be zero-emission. My understanding for why that date was picked is that it is linked to the need to decarbonise the UK. To what extent do you think the legal issues that the United Kingdom is having with air quality at the moment mean that there might be a case for revisiting the speed with which we try to electrify the market? At the same time, I would be interested in your comments on what is happening internationally. I mentioned Norway and China earlier. There are different models and approaches that may not be suitable for the United Kingdom, but I would be interested if you could speak to air quality and the international perspective on these issues.
I had a meeting with the Secretary of State for Transport in January to tell him exactly this. The brutal fact of the matter is that possibly only 10% of consumers in the UK have driven an electric car; the vast majority are still hanging on to what I call the Clarkson effect—all that baggage about electric cars being slow, hopeless and driven by people who read The Guardian and hug trees. That has set the whole electrification of UK roads back enormously. We do not have a way of connecting with consumers when it comes to electric cars. We are informed, and the respondents to the consultation are informed, but I have been talking to groups of consumers for the past five years at test-drive events, and you would be surprised how few of them have actually even sat in an electric car.
I believe that there is potential here for the Government, and that is what I told Chris Grayling. I believe that there is potential for us to have national test-drive events whereby people can go to supermarkets, drive electric cars and undergo what I call the transformational moment, the damascene moment, when they get into the car with all their accumulated baggage about how bad it is and how unfeasible for their lifestyle, and then they come out as a completely converted person, who goes on to convert other people. It must be an extremely important part of the Government’s strategy to talk to the consumers out there who have little or no faith in the electric car industry and obsess about charging and infrastructure, when actually 90% of all EV drivers charge at home. We must not miss this essential point to move forward and to engage people with the process of electric cars.
Q I think your thesis is a sound one, but may I press you first on the date and secondly on the international question?
We will probably make 2050 if we really pull our finger out. Norway has put incentives behind this and really pushed, but there is a different culture there—there is a culture that embraces change and environmental issues more than we have. Selling electric cars on the basis of environmental issues has not worked in the UK—people are interested only in fiscal benefits. Ours is a different model, and we really need to bring the public with us. If we do that and we make special provision to do this, we will make 2050. If we don’t, we won’t.
Q Mr Stewart, did you want to come in?
You talked about carbon emissions, but the other benefit of electric vehicles is in relation to NOx emissions, which have moved much higher up the public agenda. These vehicles offer a solution for cities. That is something that in my mind would accelerate the deployment of electric vehicles, particularly with city Mayors taking a view about what transport should or should not be in their city. We could see 1 million vehicles by the early 2020s, according to our latest set of scenarios, and about 10 million by 2040, if there is the support and the infrastructure and if, as Quentin said, the value proposition for the consumer continues in the direction it is going. I think it is continuing—
Q May I just press you on the numbers? I am very interested that you refer to 1 million vehicles by the early 2020s. Last September, we had 87,000 ultra low electric vehicles on our roads, so it is quite a leap to 1 million in four or five years’ time.
There are two points I would like to make. The first one is from an industry perspective. We have been pressing the Government to have near-term targets for the increased deployment of electric vehicles. In business, we all work to having three-year plans and having an idea about what happens in the short term—about what is a good aspiration for electric vehicle roll-out. Our infrastructure follows the vehicles at this stage, so we are particularly keen that the Government should set near-term targets for electric vehicle roll-out.
Q What is your near-term target for, say, 2020?
Q It is quite confusing to talk about percentages of new car sales. What is that in numbers of vehicles on the roads?
There are two points here. First, it is easier to set targets for new vehicle sales. Secondly, to return to the air quality point, we want to have electric vehicles in our city centres—be they hydrogen fuel cell or battery electric—because they are zero emissions at point of source. We also need to do something about the vehicles that are already out there with petrol and diesel engines.
There is a subtlety in the Bill, which I would be keen to explore, that relates to vehicle testing. At the moment in the UK we have a regime where vehicles are tested thoroughly and certified to initial standards, but thereafter our inspection and maintenance regime is quite lax, in that it is of a static vehicle with an engine probe up the exhaust.
No particulates. In other countries, such as Australia and the US, they have a much tighter regime on inspection and maintenance. They have particular tests where the vehicle is put under dynamic load and its emissions are measured—one test is called the I/M 240. I want to be sure that in the testing section there is carry-over, so that you retain the power, perhaps under proposed section 65B(3) in part 4 of the Bill, to revisit the nature of emissions testing in service, inspection and maintenance in the UK. You should also look at the MOT for electric vehicles, because what happens as the vehicles get a bit older has yet to be fully formalised. That is a request to the Committee to consider those two points.
In the MOT test, the MOT inspector will tell you that, for a car to fail on particulate emissions, it must be impossible to see out of the back window because of the smoke—I am not kidding. This is something that we could really do to help to clean the roads of these very, very smoky old cars.
To try to get a more rapid pace of development towards meeting the 2050 target, we have talked about infrastructure as part of that mix and about tackling anxiety—Quentin referred to that—and trying to ensure that consumers are not scared about electric vehicles, which can be good to drive. The third element is, in a sense, disincentives to drive other than ultra low or zero emissions vehicles through beefing up the MOT test and whatever.Q
The other thing is the carrot that goes with that stick. What are the right consumer incentives that could be put in place to encourage the take-up of electric vehicles? Let us face it: at the moment, they are pricey, so many buyers—certainly private buyers—will not be able to afford an electric or other ultra low emissions vehicle. What do you think about the changes there have been in Government policy on that, where measures such as the plug-in car grant have come down rather than gone up?
On pricing, the general consensus is that an electric car is probably double the price of a conventional car. That is not broadly the case. What we are not doing enough is incentivising and telling people about used electric cars. Your seven-month-old Nissan LEAF, which started with a list price of £25,000 after the grant, is now available for £13,000. All these electric cars are coming off company fleets and going into the market, and consumers do not realise that that is a really effective way of getting an EV at a low price. If you buy a Nissan LEAF or a Renault ZOE for £6,000, which is possible, that investment is paid back within three years in terms of fuel, maintenance and road tax. It is a really compelling proposition.
Q Is that not a double-edged one? For the market in new electric vehicles to take off, the fleet market will be important to that, and one thing that will be important to it is some certainty over residual values. Therefore, the low residual values at the moment, which might be an incentive to the private car buyer, are a disincentive to the big take-up of new EVs by fleets. Is that fair?
But if we have volume, the manufacturers’ prices will come down, and they are coming down. If you look at a Mitsubishi Outlander plug-in hybrid electric vehicle compared with a diesel hybrid one, they are the same price. Residuals on things like Teslas and Renault ZOEs are quite good. The market is levelling off, and we will find that prices and residual values start to firm up. Price guides and the motor industry still do not value electric cars properly. We will see a strengthening of residuals as demand increases and a lowering of prices as manufacturers get their volume and their supply up.
Q Perhaps you could answer a question about the idea of Government action on consumer incentives. Is there more that could be done? What should be the targets?
There are simple things like free on-street parking everywhere in the UK for electric vehicles, use of bus lanes and some form of priority. The Americans have had huge success with priority lanes for electric vehicles. We need to think about the stuff that you cannot buy, the things that give people an advantage in city centres if they drive an ultra low emission or electric vehicle.
The other alternative is low emission zones, and we could do that. London’s low emission zone, followed by an ultra low emission zone, is the direction of travel that a lot of cities would like to take. They want to do it in a staged format, working to national guidance as to what constitutes the standards you would set for access, so that a motorist travelling in the UK can know whether they can gain access to the low emission zone and the ultra low emission zone as they move from city to city. That is a particularly important activity. It is not covered in the scope of this Bill as such, but low and ultra low emission zones are one of the key ways of incentivising the right kind of behaviour. The second-hand market is incredibly important, and it makes those vehicles more accessible.
Company car taxation is a particular favourite that helps to drive electric vehicles into a market where others would not. The lightbulb has gone on with fleets. Previously, they would operate a diesel-only policy. “You never got sacked for buying IBM,” was the traditional term, then, “You never got sacked for buying diesel,” and that has now switched. They can see that the motor industry is not going to support that in the long term and that they need to make a change. They are now embracing what they can see is the future that they need to have in their fleet.
Q Forgive me; in relation to the cycles that we are talking about in introducing new technology, as you correctly identified Quentin, the way we are going is towards transport as a service rather than as an item. If that is so, then presumably automatic vehicles will, rather like those vacuum cleaners you get in homes, be able to drive themselves to a car park somewhere, charge themselves up during the downtime and come back out again, at which point we are talking about investing an enormous amount of public money into an infrastructure system that will, within 20 years—you were referring to 2040—be redundant. That is quite a short timescale for large-scale infrastructure investment to be redundant.
Q But presumably they will be plugging themselves in, rather than the current vehicles that require somebody to get up, pick up a wire and stick it into a vehicle.
Q I am not sure that is necessarily to come. It is not beyond the wit of man to imagine that a car pulls up into a dock, and a little arm goes out. That is not the structure that we are intending to build right now.
That is further away than you think. We would have to have a commonality of autonomous cars, and somebody will own these autonomous cars and there will be charging stations. They will broadly resemble the ones that we are lobbying for now. This vision of the arm that comes out and charges your pod, if you like, is still some way away.
Inductive charging has been referenced today: charging along the motorway as a form of dynamic inductive charging. Static inductive charging is when you drive over a pad and that pad is then able to charge your vehicle. The groundworks for all the current charge points can potentially be adapted to deploy inductive charging, as that starts to come through into the market. I do not think that is so much of an issue. We do not assume that what we deploy as charge points now will be as is in a 20 or 30-year timeframe; they are going to be updated over time as suits the vehicles coming to market.
Q What would you change in the Bill to make sure that that level of infrastructure change is more active?
I do not think it is necessary to change the Bill, in the sense that as the vehicles start to come forward, the charge point infrastructure suppliers will start to bring forward commercially available inductor charging. At the moment, we talk about people having that in their garage for particular vehicles, but at the moment those are not inductive vehicles, other than, say, for some bus operations and the like. It is early pre-commercial.
Q Is the technology used to operate autonomous vehicles safe and reliable at present?
That is a difficult question. Where do we begin? There have been some very successful trials of autonomous vehicles in America and Europe, and they have collectively driven many millions of miles with an infinitesimal amount of accidents. Significantly, they have driven in traffic. In Los Angeles, Nissan, Toyota, Lexus and Volvo have had great success in driving autonomous cars in traffic, which have mixed in successfully.
However, it would not be fair of us to say that there is not a great challenge. Ironically, the challenge comes probably not from autonomous cars themselves but other road users, some of whom may just think, “I’m going to have a go here.” All of the insurance legislation needs to be sorted out, but we need to absolutely understand that there will be a period of some pain. More than that I cannot give you.
It is a tremendous opportunity for the UK motor industry. The industry has sought to progress and be competitive around new technologies, with low-carbon vehicles being one and connecting and autonomous vehicles being another. We have a series of projects in the UK—with both technology development and now with funding set aside in the Budget for demonstration locations—to be able to work through, understand the issues, and test and understand the state of development of the technology. There is something like 1 million lines of software involved in making a vehicle have the artificial intelligence to be able to progress. It is one thing to go down the motorway at high speed with clear lines; it is completely different to go down Fulham Road at 7 o’clock in the evening on a very busy day. There is a lot of work still to be done.
The good thing about the Bill is that it is the first time that automated vehicles have figured in UK legislation. This is the beginning of a process that makes the UK a potential lead market for the deployment of this technology. It will be hugely beneficial for our motor industry if we are able to be receptive and responsive to what we can all see will deliver huge value societally, in terms of reduced accidents or the ability of people to move when they are older or infirm, or younger people who cannot drive vehicles. There could be huge benefits to society, and this at least starts the process of making the UK ecosystem autonomous vehicle-friendly.
Q On roll-out and testing, is further testing suggested? One of the suggestions made on Second Reading was that the vehicles have not been tested in snow conditions yet, and there was a suggestion that different weather variables may need to be looked at. Robert gave the example of a busy Fulham Road at 7 o’clock at night. One example I gave on Second Reading was the single-track roads in Scotland, on which, if two vehicles drive head-on, somebody has to make the decision to back up to the nearest layby. Are there things like that that still need to be robustly looked at?
For connected and autonomous vehicles, there is now funding set aside for a series of demonstrations of different types. Those will reflect the real world as well as the virtual world in which the technology will be speedily developed before being put out into controlled demonstration environments and, ultimately, on to the open road. The UK is well placed, with activities and the announcements in the Budget, to do the preparatory work and the learning to make the UK a receptive environment for these vehicles to be deployed in and to deal with exactly the type of use cases you referenced.
However, it is possible to say that with autonomous vehicles you might even reduce the amount of accidents in the UK, because it is 90% human error. The 2,000 fatalities we have in the UK on our roads a year have plateaued and are due entirely to people making mistakes. If we put this technology in, that death toll could conceivably come down significantly.
Q It is good to hear you make the case for us being pre-eminent in this field. The Government are certainly determined to make this country a world leader. Returning to the issue of infrastructure, what are your views on on-street charging infrastructure? We spoke a bit about petrol stations, service stations, supermarkets and so on. Other places—Paris is a good example—have done quite a lot of work on spreading on-street charging infrastructure quite evenly across the city. What more could Government do on that?
In that spirit, what about the design of these charging points? Governments have not been entirely hopeless in past decades on that—one thinks of the Gilbert Scott telephone box, the Belisha beacon or the post box. In recent years it has perhaps been not so good, but we can do good things. Should we think more about the design of the charging points and what they look like, to make them instantly recognisable, iconic and widely respected and admired as such?
There is a powerful argument for making them iconic as part of this new and very important cycle of change that will make our lives better. In Bordeaux, they have a proliferation of on-street charges because they have a fleet of little electric cars that you can just go up and hire for the day, the hour or the quarter of an hour and then return to a little charging pod. It is a huge investment, but it works extremely well, and of course it limits the amount of traffic coming into cities because those cars are available. It would benefit us hugely if we started to think about urban car club schemes that are just electric cars and the proliferation, as with the Boris bikes, of a recognisable charging pole on the street. It would also help all those people who do not have parking to charge their cars.
Members of the association take the view that they can produce an iconic charge point that is recognisable as their own brand. They have been in that business and have tried to make the best use of their equipment and make it as attractive as it can be. In the UK, we have quite a dynamic market for the supply of infrastructure. We now are learning that the major US supplier, ChargePoint, is looking to bring its technology into the UK market. We have had BluePoint, which is the Bolloré scheme, and others. They will bring what they view as the norm in their markets into our markets.
We could, but I think there would be a resistance among the industry to effectively move to one standard shape of pole. You have a post and you plug into it, but the innovation is occurring in the way you access it. That is more about people using smartphones to input information and say, for example, “I want to charge for this period. I’m prepared to pay this. I might be prepared, if you incentivise me, to allow my vehicle to have managed charging, as long as it has so many kilowatt-hours in it by the time I come back.” That type of interface is where there will be a lot of innovation. The poles themselves work to pretty standard methodologies, and motorists are used to using them. The clever bit in the design will be about the user interface on the smartphone app that enables smart and managed charging.