The UK EV market is growing fast. Spurred by the British Government which, like its European counterparts, is phasing out the sale of new petrol and diesel vehicles – internal combustion engines (ICE). This will be banned from 2030 (and the sale of new hybrid vehicles from 2035). Combined with a system for grants and charging points, vehicle emissions should be drastically reduced. There remains friction and obstacles such as delays in investing in the necessary infrastructure and payments for Electric Vehicles charging (EVC) points, which are slowing progress, consumer confidence and Electric Vehicle (EV) adoption. However, the EV sector is adapting.
EV capacity and customer experience
The EVC market has grown recently, with 2020 a particularly good year for take-up of EV vehicles in the UK. Indeed, plug-in-hybrid electric vehicles (PHEVs) and battery electric vehicles accounted for 10% of total car sales, reflecting a 180% market growth. There has been greater adoption in London incentivised by congestion charge exemptions for hybrid and electric vehicles, with London taxicab drivers particularly forthcoming to the changes. Nonetheless, every city and town must improve the infrastructure needed for EVC if we are to meet the government’s 2030 targets.
There were nearly 260,000 pure-electric cars on UK roads at the end of May 2021 and more than 535,000 plug-in models (including PHEVs). There are over 25,000 public charge points. A market report on EV charging by the Competition and Markets Authority predicts we’ll need 10 times more by 2030. There has also been a recent government consultation on customer experience at EV charging points. But, we need significant expansion of the grid network, including improved facilities and a far greater number of charging points at railway stations and retail parks.
The operators – big manufacturers
The big car manufacturers are really focused on EVC with Audi, Jaguar, Volkswagen and Volvo all announcing the phased end of new petrol and diesel car sales. Tesla, Volkswagen and Nissan have all developed their own charging infrastructure and offerings, but the memberships are private, closed-loop and too restrictive, with no industry-wide compatibility.
The company Fleet market is driving a big part of the EV evolution with increased use of home charging facilities and installations and investment in charging equipment at plant depots. For example, the parcel delivery company DPD is currently delivering up to 100m parcels by EV per year to 25 towns and cities. Its EV fleet has risen from 149 in 2019, to 730 in 2020 and is expected to reach 4,500 in 2025.
Nonetheless, problems arise in terms of vehicle size, with some unable to access and/or park on housing estates during a delivery. Furthermore, over 40% of their drivers charge commercial vehicles from home, but this is not an option open to all drivers, especially those living in urban areas and / or rented accommodation. In response, DPD is investing in depot infrastructure to support its further EV expansion.
The number of EV commercial fleet vehicles in the UK is expected to increase from 2.3m in 2020 to 9m in 2025 with 1-in-3 fleet managers committed to electrifying at least half their fleet. Commercial EV vehicles accounted for over 50% of EV registrations last year.
Currently, car manufacturers are still charging a premium for the EV vehicles themselves and the cost weighs particularly heavily with consumers as the average cost of buying a car is £49,377 (source Auto Adviser). Currently, nine out of ten personal customers still want petrol vehicles.
However, the operational economies from EV are staggering. According to industry estimates, the average cost of a home charge up to 200 miles is only £2.50. Petrol vehicle drivers typically spend 15 pence per mile or £30 for a comparable journey. Depending on the vehicles you are comparing, the pence per mile cost can drop from as high as 20p per mile for a petrol car to less than 5p per mile for an electric vehicle (source Smart Home Charge). Plus, the average electric vehicle (EV) driver spends £310 per year on electricity to charge it at home, according to recent study by Uswitch. The energy comparison service calculated the cost based on a typical EV covering 10,000 miles per year at the UK’s average electricity price per kWh.
The customer experience needs to be seamless and frictionless, with customer centric solutions, choice and certainty about access to charging points, whether on motorways, kerbside in towns, or rurally. There needs to be increased EVC capacity alongside buildings, fleet parks, gyms, leisure centres, etc.
This isn’t the case at the moment and there isn’t competitive access for new contracts. It is also difficult for customers to compare costs and pay for charging. Emerging developments like subscriptions and bundling could create more problems in the future such as lock-ins on contracts.
Charging also needs to be faster, not a 30-40 minute wait at motorway service stations, far longer than it takes to pick up a coffee!
Payments and data
Omnichannel payment facilities are required and customers should be able to choose their method of payment for EVC facilities. Not all customers want to be enrolled into a private EVC scheme network. Customers need flexibility and to be able to pay with a card or wallet (exactly as is the case in open banking solutions). Can payments be the unifying factor? For this to happen it must facilitate and combine proximity and online payments for an omnichannel experience and manage both close and open loop acceptance with a minute footprint. When given the choice, drivers will gravitate to charging networks which provide the best customer experience and most competitive price. It needs to be easy for the customer.
The industry needs to support customers (network Operators) by providing real time guaranteed payments, aggregated data, payments mechanisms/platforms and reporting. Customers need to know what charges have been onboarded at any one location.
Providing EV charging infrastructure, such as kiosk facilities, can be a challenge. Currently there are issues with smart phone connectivity. There are also different payments standards being discussed, such as the Payment Services Directive (PSD2) and Open Banking. These need to be unified.
Collaboration, standardisation and simplicity are key. If the user has confidence in the EV Charging infrastructure adoption of electric vehicles will increase.
There will be a tipping point for the EVC sector over the next few years. We need the foresight and investment by government, a recalibration of tax policies to fund the investment and proper collaboration between the private and public sector for it to succeed.
EVC customers need choice in payment methods, whether mobile or card, or machine device. We aren’t there yet, but payment technology players like Worldline are bringing the technology to increase choice, remove market friction, encourage and enable collaboration across the EVC market.
The industry is currently grappling with closed loop private manufacturers and non-integrated payments solutions – Worldline and other technology players are developing market leading solutions for all customers across all sectors and channels. This should go a long way to removing EVC market frictions and boosting customer confidence to boost EV adoption to ensure the government’s targets will be achieved.
About WL Easy EV
Worldline offers a unified payments open-architecture solution for online payment, mobile payment (wallet and app). acquiring in 26 countries and 21 currencies. It’s a complete offer including terminals, Ecommerce payment acceptance, dedicated gateway and acquiring platforms. In short, all payment methods EMV/bank cards in closed and open loop systems.
WL easy provides a seamless customer experience and with regulatory compliance
Click here: http://www.worldline.com/easy-ev