Examination of Witnesses

Vehicle Technology and Aviation Bill – in a Public Bill Committee at 2:00 pm on 14th March 2017.

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Steve Nash, Teresa Sayers and Edward Woodall gave evidence.

Q 65 We will now hear oral evidence from the Institute of the Motor Industry, the Downstream Fuel Association and the Association of Convenience Stores. We have until 3 pm for this session. Could the witnesses please introduce themselves for the record, starting with Mr Woodall?

Edward Woodall:

Good afternoon. I am Ed Woodall. I am head of policy and public affairs at the Association of Convenience Stores, which represents 33,500 local shops and 8,000 forecourt retailers across the UK.

Teresa Sayers:

I am Teresa Sayers. I am the chief executive of the Downstream Fuel Association. We represent the non-refining companies and major supermarkets.

Steve Nash:

I am Steve Nash. I am the chief executive of the Institute of the Motor Industry, which is the professional body for individuals working in the motor industry.

Photo of Richard Burden Richard Burden Shadow Minister (Transport)

Welcome. I have two sets of questions. The first is probably principally to Mr Woodall and Ms Sayers, and the second is principally to Mr Nash. On the Bill’s provisions on electric charging points, I think it is fair to say that your two organisations have been rather more critical of what the Government are suggesting than a number of others. Can you outline why you think they are going in the wrong the direction with the provisions on charging infrastructureQ ?

Teresa Sayers:

First, we welcome the opportunity to comment on the Bill and work with the Government on looking at ways to build up the infrastructure for electric vehicles. I represent four major retailers, and my members already have some provision for electric charging points within their infrastructure.

We believe that the emphasis on petrol forecourts is wrong for a number of reasons, not least because the configuration of forecourts does not lend itself to allowing cars to be placed there for in excess of 20 to 30 minutes. We provide electric charging points, as I say, but they are exclusively in the car parks of our stores and at head offices. We are looking closely at how we can further develop provision along those lines, but we are very concerned about the emphasis on placing them in the forecourt.

Edward Woodall:

Also, there is the question of how we define “large fuel retailer” in the Bill to determine whether a retailer has the capacity for electric vehicle charging points on their sites. That is quite a difficult task to deliver in regulation, because this is quite a diverse and different sector. That could take into account fuel volumes and number of sites, and it would also have to take into account size of sites, as Teresa was saying, in terms of having the space for people to charge their vehicles on the site.

I suppose there is also a concern about the desire of consumers to charge in those locations. The Government’s own evidence suggests that 95% of vehicle users currently charge at home; 26% then charge their vehicles in workplaces; and only 12% look to charge their vehicles in public spaces. Would they choose to do that on fuel sites? It is a question; I am not sure. Do the fuel sites have the capacity to deliver in this way? Only 11% of our members have seating areas in their forecourt sites, so what does someone do for the 30 minutes if there are rapid charging facilities on those sites?

There are other logistical issues around whether sites have the capacity to deliver that energy. Electric vehicle charging points will need a direct connection with the grid; obviously, that does not cover all sites across the board. So there is a real challenge in how you define in regulations a large fuel retail site, and whether it has capacity to deliver those services.

Photo of Richard Burden Richard Burden Shadow Minister (Transport)

Q The Bill refers to “large fuel retailers”. Evidence that we heard this morning rather suggested that what will make or break the expansion of electric charging infrastructure is much broader than motorway service areas. There was a lot of discussion about supermarkets, what to do around on-street parking and smart charging at home. I will press you a bit further on whether your reservations about the parts of the Bill relating to electric charging are concerns about Ministers being given regulation-making powers to mandate others to provide charging points to certain specifications. Or do you basically accept that principle, but think that the provisions are targeted wrongly in focusing on large fuel retailers?

Edward Woodall:

The latter. I understand the principle and the objectives, but is it right to focus this purely on fuel sites, when the evidence suggests that consumers are perhaps not looking to go to those sites to charge their vehicles? There is also a concern about whether it matches up with what drivers will do while they are charging their vehicles. It makes sense to have charging points in an area where they might be going to the cinema or the shops, as opposed to having them on a forecourt site, which may not have the space or the retail capacity to deal with that issue.

We also put, in our submission, evidence about ways to incentivise other partners to use this system—for example, changes to the national planning policy framework might give more specific direction on where charging points should go, so that local plans could be informed by that, and capacity could be increased across the board.

Photo of Richard Burden Richard Burden Shadow Minister (Transport)

Q Can I can come to Mr Nash on a different area? In the written evidence you provided, you put quite a lot of emphasis on the importance of training and accreditation for people working on these charging points and autonomous vehicles in the future. Could you say a little bit more about your concerns?

Steve Nash:

Absolutely. I think it is worth understanding a little bit about our sector. Everybody knows we have a franchise sector, and we tend to talk about the independent sector, but that is a catch-all phrase. There are about 40,000 businesses in there, ranging from Halfords and Kwik Fit down to a man working on someone’s drive.

Right now, of all the technicians out there working on cars—there are just under 200,000 people we know of, but there are probably quite a few that we do not know of, because they do not necessarily belong to a trade body or anything else—only about 1% are qualified to work on high-voltage electrics. Let us make no mistake about this: you have to be licensed to work on domestic electrics, and I would venture to suggest that the electrics in an electric car are potentially more lethal than the mains. We are talking about direct current—more than enough to fry you—so you do have to be properly trained and know what you are doing. In this sense, a car is not a car, just because it looks like a car. These are the biggest technical changes we have seen for 100 years. This is not an evolution of old technology—this is new technology.

We know that the manufacturers will do what they need to do to ensure that their franchise dealers can cope. Most of them are already using our accreditation scheme to qualify people at different levels, including knowing what you should not do and how to disable the electrics to work on other non-high-voltage systems safely. The higher level is for working on the high-voltage systems.

If you really want these cars to proliferate, there are a couple of problems. One is that right now it can cost you up to 50% more to insure one of these cars, because the insurance industry is quite aware that there is a limited repair market out there. If your car has been in an accident, you need somebody who knows what they are doing to put the thing back together, and the industry is assuming a higher cost because there is a limited repair market. That will continue unless you find a way of engaging the wider market, and the wider market will not readily make that step because there is cost involved, so it becomes a chicken and egg situation.

As I said, there is a very real health and safety issue. You do not see it now, because there are 32 million cars on the road that do not have this technology, and there is plenty to go round in the service and repair market. There are cars that have been around for a while, such as the Toyota Prius models and so on, but we know from our own experience that a lot of the independent guys do not touch those—they pass them back to the dealers—because they do not need that work to make a living. However, as these cars proliferate—and that is everyone’s intention; if you look at the product plans that all of the manufacturers have at all the motor shows, it is all about plug-in hybrids and electric cars, so these cars will proliferate—if you want a competitive market for servicing these cars, you need the independent sector to engage.

To make that happen, first you need regulations to protect people’s safety, and secondly you have to consider using some of the large fund—I believe it is something like £600 million—that has been put aside to help move us in that direction. Some of that money should be directed towards a training fund to help the independents engage in the training that they need to work on the cars safely.

Photo of Richard Burden Richard Burden Shadow Minister (Transport)

Q Could you outline how it would work? In other words, how would the Government, or whoever, define the vehicles that would require licensed people to work on them, and what things they would need to work on? For example, some might say you should not have to be licensed in order to check the tyres; that is different from working on the electrics. There is potential for this to be a difficult area for definition.

Steve Nash:

We have worked very closely with manufacturers to define three levels of accreditation. Level 2 says you can work safely on the passive systems of the car, so you are still going to have steering and suspension. I was going to say brakes, but actually a lot of these cars have regenerative brakes, so even that is potentially risky. The second level of accreditation is knowing how to switch off the high-level electronics and knowing what you should not touch, because there are certain systems on the car that have very high residual currents in them, even when the car is turned off.

Level 4 accreditation is for people who are properly trained to work on the high-voltage systems, which include the control systems and the battery packs. Working with manufacturers, we have refined that to understand that it covers the entirety of their own group of technicians working in their franchise.

If Members wish to remove their jackets, that would be fine. Let us try to keep questions and answers crisp.

Photo of Andrew Selous Andrew Selous Conservative, South West Bedfordshire

I have a question for Ms Sayers and Mr Woodall. I understand your concerns, because it is quite a change to your business model, but are you not missing out on future potential? Given that we all expect this to be a growing and significant market, do you not want to be part of it, to capture that revenue? Are you not looking at other ways to make money around this, reimagining your business model a bitQ ?

Teresa Sayers:

Absolutely. My members are very keen to engage in the development of alternative fuels infrastructure. As I said earlier, they already have some provision, they are actively exploring how best to develop that and they will happily work with the Government on that, but their considerations as to where it would be appropriate to place these additional electric vehicle sites are around convenience, the identification of strategic corridors, the proximity of the car parks to other retail parks, the duration of time that shoppers typically spend within stores and the size of the car park. All of these considerations are around existing car parks, so there is a willingness for and understanding of the potential growth of this. We are playing our part, but we maintain that the forecourt is not the appropriate place to put this emphasis.

Edward Woodall:

I agree. This is about whether the development of the market needs to be regulation-led through the Bill, or whether it needs to be led through making the business case for the fact that this infrastructure is going to grow. The question that comes back to the Office for Low Emission Vehicles is about more research to make a business case for businesses to have these on their forecourts, and about looking at using funding to incentivise the introduction of this new infrastructure, instead of enforcing it. That incentivising might be done through business rates relief for people with very large business rates bills who put these on their forecourt sites, or through direct Government funding to think about how to put these on the sites. There is this question of whether it should be regulation or incentive-led.

Photo of Andrew Selous Andrew Selous Conservative, South West Bedfordshire

Q Thank you. I have a final question for Mr Nash. Hearing about the training needs of the industry, what preparation is going on in schools and further education colleges to set up courses so that we have enough skilled technicians to service these vehicles in future?

Steve Nash:

There are plenty of places around the country that can train people in the technology. Obviously, over time, the new apprenticeship standards will evolve, but it has to be remembered that an apprenticeship is a start, not a finish—we are talking about lifelong learning here. Apprentices will not come out of their apprenticeships ready and available to work on the high-voltage electrics. That will take time, and that is additional training that will come as they develop their career. We as an organisation, a professional body, work with a network of 600 FE colleges, training companies and manufacturers’ academies around the country, many of which are capable of delivering this kind of training. As I said earlier on, it is a sort of chicken and egg situation—a question of supply and demand. They are ready to offer it once people have moved in that direction, but it will not happen on its own.

Photo of Rob Marris Rob Marris Labour, Wolverhampton South West

I want Ms Sayers to clarify a bit. The supermarket I go to every week is, I suspect, like quite a lot of them. It has a large car park—it is one of the major multiples—and alongside but distinct from that car park is a petrol station, which is branded by the supermarket but is a Shell station. AsQ my hon. Friend Richard Burden said, the Bill gives “large fuel retailers” certain responsibilities. Would your members prefer the wording, “large retailers”, to make that clearer? In the supermarket car park, people may typically leave their car for 30 minutes. I am thinking of those old westerns where people hitch up their horse outside the saloon—people hook up their car, grab a trolley, go in to do their 30-minute shop and, when they come out and unplug it, they have had a fast charge. The charging points would therefore be better placed in each parking bay for the supermarket proper, which is not a large fuel retailer at the moment. Is that more consonant with the way in which your members are thinking?

Teresa Sayers:

Very much so. Our apprehension about the wording is all about the location of the EV charging point on a forecourt, for the reasons we have discussed.

Photo of Rob Marris Rob Marris Labour, Wolverhampton South West

TheQ word “fuel” in “large fuel retailers” is causing you to scratch your head a bit?

Teresa Sayers:

Yes, absolutely.

Photo of Rob Marris Rob Marris Labour, Wolverhampton South West

“Large retailers” would be more palatable for your members. Am I rightQ ?

Teresa Sayers:

Yes.

Photo of Rob Marris Rob Marris Labour, Wolverhampton South West

Thank you. That is very helpful.

Photo of John Hayes John Hayes Minister of State (Department for Transport)

Q This is a question for Edward, and then perhaps Steve. Given the need to ensure that we have breadth in the charging infrastructure—not just number, but location—is it not important that we also base charging points in rural places, village shops and small post offices, rather than concentrating them in places that already have charging points? Similarly, is it not also important that we work with small garages, rather than simply the major garages, to avoid creating an uneven distribution of charging points that would be a major barrier to entry to the market for many potential consumers? Would you like to deal with that one before I come on to my second question?

Edward Woodall:

Obviously, we do not want to be left behind. The fuel retailers in our membership are looking at this at the minute. They have electronic vehicle charging points, but significant costs are associated with delivering that. Keeping pace with those costs, if we introduce charging points by regulation, would be a challenge. It would be even more of a challenge for village post offices and shops to have charging points on their sites. Obviously, we do not want to be left behind, but I think the industry will naturally fill that space where it is appropriate.

Photo of John Hayes John Hayes Minister of State (Department for Transport)

Q We would not want to exaggerate or exacerbate the trend towards fewer places at which to buy fuel and food. Steve, on your point about skills, this morning, at a roundtable with the industry, the point was made that this might act as a spur to people who were keen to get into the industry. The excitement of the new technology, and of being part of an important, cathartic change, might attract more recruits. Have you come to any judgment on that and, if not, how can we make that happen, as it is surely a good thing?

Steve Nash:

We are like every other industry: we are competing hard for talent, and we are definitely using the massive, incredibly exciting change we are going through to engage young people and show them that this is a cutting-edge, futuristic industry—so, absolutely. As the professional body for the industry, part of our raison d’être is to raise professionalism and bring new talent into the industry, and this a great catalyst for that, yes.

Photo of John Hayes John Hayes Minister of State (Department for Transport)

Q We heard from a witness this morning who suggested that we should have roadshows—demonstrations of electric vehicles in different localities—and that once people had tasted the fruit, they would want more of it. That might also apply to people who want work in the industry. Is this not about marketing in a sense?

Steve Nash:

Yes. We are very much involved in UK skills and world skills. We are at the Skills Show. Last year, in co-operation with some of the manufacturers, we featured electric cars there, and it absolutely does pique interest. I very much go along with what you are saying.

Photo of Richard Burden Richard Burden Shadow Minister (Transport)

I should declare an interest. I am honorary fellow of the Institute of the Motor Industry. It is non-pecuniary, but I thought I had better put that on the record.

Photo of Drew Hendry Drew Hendry Shadow SNP Westminster Group Leader (Transport)

IQ want to ask a question similar to that asked by the Minister. Earlier, we were talking about the need to look not just at fuel stations as the only charging point locations. There is an issue of unintended consequences, arising perhaps from a lack of strategy and thinking over the deployment of charging points. Similar to the situation with village shops, in your view, is there a risk if we concentrate, for example, on large retailers, that we could see a further impact on high streets because there would be a disincentive to go there? A follow-up question would be, do you believe that enough work has been done and consideration given to other technologies such as in-road inductive charging as a possible solution to those conundrums?

Edward Woodall:

Obviously we do not want further disincentives for people going to high streets. That comes back to the point I made earlier about how we can encourage this more widely. Perhaps we should look at the planning system and the national planning policy framework to ensure that people and planners are thinking about where to put charging points in future. I agree that we do not want to focus too much on one particular area. We should follow where the consumers—the people who have electric vehicles at the moment—are going. They are saying that they want to charge in locations that are convenient for them. It is not necessarily in fuel retailer sites, but in car parks and leisure facilities, on high streets and in other car park areas. That might include village shops and convenience stores.

Teresa Sayers:

I support everything that Ed said. It is very much about destination and convenience. When you look at such criteria, a variety of alternatives offer themselves up as being appropriate for the positioning of EV charging points.

Photo of Drew Hendry Drew Hendry Shadow SNP Westminster Group Leader (Transport)

Q Can I press you for some thoughts on other charging technologies? That was the last part of my question.

Edward Woodall:

I do not have a great deal to add on that.

Photo of Steven Baker Steven Baker Conservative, Wycombe

Mr Woodall, if I understood correctly—I listened very carefully to the answer about business models, because the same question occurred to me—you said you do not wish to be forced, but you would be happy to be paid one way or another to take charging stations. I am not surprised, but you did not mention profit as an incentive to provide this service to consumers. Can you elaborate? Why did you not mention the potential to make a profit out of chargingQ ?

Edward Woodall:

Obviously there is a benefit to having charging on a site. I suppose I am focusing, in the context of the Bill, on how it will work in retailers’ thinking about investing in something that is developing in the long term.

Photo of Steven Baker Steven Baker Conservative, Wycombe

Q Is it just not profitable to provide charging to people?

Edward Woodall:

Petrol forecourt sites make their money out of the shop. They do not make their money out of the fuel or the electric charging. That is a very low-margin part of their business. That is why you are seeing so much investment in the sector.

Photo of Steven Baker Steven Baker Conservative, Wycombe

Q That is what I imagined. To make a profit, you need to get people through as swiftly as possible, get them in the shop spending as much money as possible, and then on they go. Hopefully, they are happy and have had the service they want.

Edward Woodall:

It is not quite that simple, but yes.

Photo of Steven Baker Steven Baker Conservative, Wycombe

Q Suppose you had an energy source that could be changed quickly, instead of over half an hour, would your current business model work? If, for example, we used hydrogen, as we were discussing this morning, your business model would continue to work in the same way, would it not?

Edward Woodall:

Yes, but obviously the investment for putting hydrogen on fuel sites is significant. We asked fuel retailers about the cost of putting on electric vehicle charging points, and the estimate was between £50,000 and £60,000 per site, depending on the site. That increases significantly for hydrogen sites, because the infrastructure behind that is much bigger and more expensive, and it is a harder case to make because fewer consumers use that type of fuel source.

Photo of Steven Baker Steven Baker Conservative, Wycombe

Does anybody else wish to add anything on that point? No? Thank you very much.

Photo of Alan Brown Alan Brown Scottish National Party, Kilmarnock and Loudoun

EarlierQ , in the discussion with Rob, there was discussion about phraseology—about large fuel retailers or just retailers—and an issue with forecourts. I want to clarify something. I am not sure if forecourts are mentioned in the Bill, so is that a red herring? Is it not going to be up to the retailers to site the charging points where they are most convenient?

Following on from the previous question, if you are not blocking the forecourt, a rapid charger may take 30 minutes, but is that not an opportunity for sales if it is the shops that make all the money? I would have thought that for somebody who is travelling, if it is an intermediate store, it would be an ideal opportunity to park and charge their car, go into the shop, buy a newspaper or a magazine and a few snacks, sit in their car, then move on. Is there not a business opportunity there?

Edward Woodall:

Yes, there is. As we said in our submission, only 11% of sites have seating areas for customers, so there might not be the capacity to manage all that. Equally, how big is a forecourt site? Think about your local forecourt site—how many cars can it fit? For some of these electric vehicle charging areas, they will not consider it unless it is an acre or an acre-and-a-half-sized site.

Teresa Sayers:

Certainly, the charging sites would have to be on the periphery of a forecourt. The current configuration of estates has very limited space to accommodate any parked vehicles. As was previously mentioned, the business model is a very high throughput of vehicles. The maximum duration on the forecourt is usually below five minutes—they fill up, pay and leave. It is just not built and configured to have additional cars there for a very long period of time.

Photo of Kit Malthouse Kit Malthouse Conservative, North West Hampshire

IQ want to ask about brevity. Mr Woodall, I have to confess that I cannot ever remember spending more than five or 10 minutes in a convenience store—presumably, that is why they are called convenience stores, because it is convenient and quick—so I cannot quite see the model of me pulling up in my electric car, plugging in for the half an hour or even 15 minutes, and spending that time in the convenience store, particularly when the number of spaces will necessarily be limited. There will not be 15 or 20 spaces; you might perhaps have two, which might therefore be full the whole time. Do your members really see this as a big business opportunity or is there a Government subsidy available so you might as well take it?

Edward Woodall:

I agree with all those points. I think it is difficult in our format of retail to deliver electric charging, given that both on forecourts and in convenience stores, there is large throughput and we are usually in areas of small parades where there are limited parking spaces, or they are on forecourts that are likewise limited for parking space.

Photo of Kit Malthouse Kit Malthouse Conservative, North West Hampshire

Q So on your earlier point on the greater investment required for hydrogen, given that hydrogen requires no behavioural charge—you refuel in about the same amount of time as you do a current internal combustion engine—the throughput of people might be greater, so the return on investment could be higher. Rather than having two people sitting there for half an hour, you might have 30 people going through who would therefore spend commensurately more, even though the initial investment might be more.

Edward Woodall:

In terms of the hydrogen market, we are a long way off hydrogen being—

Photo of Kit Malthouse Kit Malthouse Conservative, North West Hampshire

Q That is what everybody keeps saying. There is a body of us who do not necessarily buy that, but okay, I understand that.

Edward Woodall:

It is hard for me to answer and model that—

Photo of Kit Malthouse Kit Malthouse Conservative, North West Hampshire

Q I understand that. I have one other question, which is about the very high voltage required for fast charging. On an existing petrol or diesel forecourt, you are not even supposed to use your mobile phone because of the possibility of some kind of arc or charging gas. Is there a safety issue with the incredibly high voltage that is required to charge a car in half an hour and the possibility of arcing in an atmosphere of gasoline fumes?

Teresa Sayers:

I am not qualified to answer that question. However, that is something that needs careful consideration. There are technically qualified people who can give you a comprehensive answer.

Steve Nash:

With current electric cars—no pun intended—and the connections you make, there is very little chance of arcing, but I understand that you are not going to put volatile things next to high electric charges.

I have some experience of hydrogen because I was formerly on the board of BMW in the UK and we were running hydrogen cars around London. To deliver hydrogen as a liquid, it has to be stored at absolute zero. That is very, very complicated. It is also a very small molecule, so it permeates just about everything, so storing it is a real challenge. We are talking about hydrogen fuel cells, which are still kind of in their infancy. It depends on how the hydrogen is required, whether as a gas or a liquid. Either way, there is a long way to go. I think there are only two places in the south-east of England that could deliver hydrogen if you wanted it at the moment.

Steve Nash:

Maybe I am out of date but, even so, that is not a lot. It will come, but there are technical complications. The battery electric cars are the ones that are going to proliferate first.

Do Members have any further questions for this panel? No? I thank the panel for their time and co-operation.