Whenever people learn that I have an electric vehicle (EV) the conversation invariably turns to whether I suffer from “range anxiety” – the fear of running out of charge. The answer is that generally I don’t, though I might if I were contemplating a drive across the Highlands of Scotland to Aviemore, say. But otherwise, no. Why? Because I am able to charge the car overnight at home, and most of my trips are much much shorter than the vehicle’s 300-mile range.
In that sense I am statistically normal. Government estimates are that 99% of car journeys in England are of less than 100 miles. So if you can charge at home, then most of your problems are over, which probably explains when the last time the Department for Transport did a survey, 93% of the country’s EV owners had home charging.
Sadly, there are a lot of people who are not in that happy position. They live in blocks of flats, or in urban terraces, not in detached properties with driveways. If they acquire an EV then – unless their car is made by Tesla (which has its own charging infrastructure nationwide) – they are at the mercy of the UK’s public-charging infrastructure. And that is – still – patchy at best. The government estimates that there were 53,677 public charging points on 1 January this year, which it says “puts us on a growth rate consistent with delivering at least 300,000 charge points by 2030, in line with our forecast charging demand”. Hmmm… that depends on how many of those charging points are functional at any given time.
Range anxiety is an understandable factor in tempering public enthusiasm for EVs. “Consumers will be reluctant to buy an EV until they can see chargers everywhere”, says a Financial Times article, “even though they will probably use very few of them.” The reason owners of conventional cars don’t suffer from range anxiety is that there’s always a filling station within easy reach. Another dampener is cost: new EVs cost more (sometimes quite a lot more) than fossil-fuel cars. And the secondhand market for them is still relatively small and understocked.
But that’s changing; the expectation is that 80% of EV purchases will be in the secondhand market, and that prices will be comparable to their ICE (internal combustion engine) equivalents. So the time will come when EVs aren’t special any more. This might be (slightly) better for the planet, but rather more problematic for the Exchequer, which now derives significant tax revenues from fossil-fuel sales and vehicle excise duty. At the moment, EVs pay no excise duty and are highly tax-efficient for companies (the benefit-in-kind tax rate is trivial compared with that for ICEs). They also do as much damage to roads as do conventional SUVs because of the weight of the batteries. Their free ride at the chancellor’s expense is coming to an end.
The longer-term effects of a switch to EVs are only now beginning to dawn on us. The internal combustion engine spawned a huge ecosystem of auxiliary industries – garages, service centres, refineries, tankers, filling stations and so on – supply chains created to cater to the needs of a 19th-century technology based on heavy machinery, oil, gasoline and exhaust fumes. EVs, by comparison, are relatively simple machines – basically big skateboards with wheels driven by electric motors and controlled by software. They need less maintenance and different skills to minister to them.
There’s also an unexpected geopolitical aspect to the transition from ICEs that is beginning to play out in Europe. Basically a trade war is brewing between the EU and China. How come? Well, China is flooding Europe with EVs. Over the past two years, the country has become the world’s biggest car exporter. EVs are a huge chunk of those exports, and most of China’s EV sales go to Europe.
The European Commission says that China’s share of EVs sold in Europe has grown to 8% and could hit 15% in 2025, on the basis of prices that are often 20% below EU-made models. To Europeans this looks suspiciously like dumping, and may require imposing punitive tariffs “to protect European Union producers against cheaper Chinese electric vehicle (EV) imports [that] are benefiting from state subsidies”.
Underpinning this potential crisis is a strange dichotomy: the EU (and indeed the UK) has been subsidising the consumption of EVs, while China, struggling with a consumer economy stricken by the collapse of its property market, is massively subsidising EV production to boost exports and compensate for falling domestic demand.
This could turn into a very high-stakes game. Swingeing EU import tariffs on Chinese EVs would trigger retaliatory action by China – which co-incidentally has a stranglehold on the supply chain for the EV batteries we desperately need. This could get nasty: stay tuned.
What I’ve been reading
The Turing Trap: The Promise and Peril of Human-Like Artificial Intelligence. A terrific long essay in the journal Daedalus by Erik Brynjolfssen.
Davos: high altitude, low impact. A sharp, sardonic essay by Elise Labott on the ludicrous gabfest in Davos.
How to lead
To Fight Populism, Invest in Left-Behind Communities. Thoughtful perceptive piece by economist Diane Coyle on what governments should do, but don’t.