UK the electric car capital of Europe. Electric vehicles offer the potential for signicant carbon savings over existing technology. Gradually replacing the existing vehicle eet with electric alternatives could signicantly reduce the UKs total carbon emissions and contribute to our ambitious mitigation targets. These targets are looming and if the UK doesnt act quickly and decisively, there is a real chance that they will not be achieved. At this juncture, our automotive sector is suffering in the face of a global economic downturn. People are being made redundant and output is shrinking. Is it time for the Government and automotive sector to work together to ensure the UK is ready to exploit a changing market and demand? With other countries already pursuing electric vehicles in earnest, are we already in danger of missing out? IMechE rmly believes that electric vehicles are an important part of the UKs motoring and low carbon future and urges the Government to do more to ensure that we are well placed to capitalise on their potential. There are still some technical hurdles to be overcome but we need to consider how to make electric vehicles (EVs) more attractive to the consumer. This requires rm action that would: Remove current barriers to entry. Electric vehicles have limited ranges and are generally more expensive than existing petrol alternatives. Further, the UK has no plans to introduce a nationwide charging network to facilitate the introduction of EVs. Denmark is solving this problem by developing a network of battery swapping stations that will allow consumers to increase the range of their vehicle. This will require signicant public sector investment to facilitate their introduction. Encourage consumers to take up electric vehicles through scal incentives. By reducing the cost of more favourable technologies, Government can get more people using less polluting transport choices. Denmark, Portugal and Israel are all planning signicant tax breaks for business users and consumers. Electric vehicles tend to be cheap to run but the upfront capital costs tend to be high. In short, Government has a role to play in making electric vehicles nancially attractive. Ensure Government leads the way. In line with the EU, the Government has already announced that within 3 years new car purchases by government departments must average 130gmCO 2 /km or less. However, the Government can do more; the public sector is a huge user of vehicles. The Government should introduce standards of procurement that lead the way, favouring EVs where appropriate and impose a limit of 90gmCO 2 /km for other vehicles. Improving the world through engineering ELECTRIC VEHICLES TRANSPORT POLICY STATEMENT: 09/05 ELECTRIC VEHICLES THE CONTEXT The UK Government has made a commitment to reduce CO 2 emissions by 80% in a little over four decades. Transport currently produces around a quarter of the UKs total CO 2 emissions, with road transport contributing over 80% of this. However, mobility is essential; it drives economic growth and societal development and we cannot just stop travelling. We must therefore opt for solutions offering the greatest emissions reductions from the 31.4 million cars and vans 1 on our roads. The UK automotive industry has a long heritage and reputation for innovation. From the boom of the inter-war years through to its peak in the early 1970s 2 , the automotive industry has continually been at the forefront of UK manufacturing. In recent years, the industry has produced around 1.5 million cars annually, employing 850,000 people directly with an annual turnover of nearly 50 billion 3 . However, the global economic crisis has hit the automotive industry hard. Several UK based manufacturers have had to either reduce hours or staff numbers. For example, despite being the most efcient car plant in Europe, Nissan UK has shed 1,200 jobs at its factory in the North East, Honda is halting production at its Swindon plant for four months and Bentley will close its Crewe plant for seven weeks from March 4 . This has, in turn, impacted on the supply chain. GKN, which designs and manufactures driveline components, has cut several hundred jobs in the UK as demand has dropped 5 . In previous recessions, notably the 1970s, the automotive industry has gone through periods of transformation. With nearly every major automotive manufacturer committed to them, are electric vehicles the opportunity for UK industry to redene itself and take a leading role globally in the decades ahead? CURRENT POLICY The European Union has recognised the need to reduce the impact cars have on our environment. In December 2008, the European Parliament adopted the Commissions proposals to limit eet average new car CO 2 levels to 130g/km by 2015 and to 95g/ km by 2020. Currently, average CO 2 emissions from new passenger cars in the EU are 160g/km 6 . This is encouraging but there is every indication that conventionally powered vehicles will be capable of operating within these limits. The case for EVs remains strong though; not only will they emit less CO 2 than conventional alternatives but they will reduce our dependence on fossil fuels. In October 2008, the Transport Secretary pledged 80m to support industry research, development and demonstration into electric and low carbon cars delivered through the Technology Strategy Boards Low Carbon Vehicles Innovation Platform. However, much of this funding had already been allocated with little available for EV research. For example, benefactors from this substantial investment, including Jaguar with LimoGreen, BAE Systems with Hybrid Electric Technology for Transit Buses and Ricardo with their two to four-stroke switching technology for existing internal combustion engines 7 . Alongside the recent decision to allow for the further expansion of Heathrow, the Government recently announced the provision of further funds (250 million) to get more low carbon vehicles on the road 8 , although is yet unclear how this funding is to be allocated. If Government is determined to make full use of EVs in the UK, more needs to be done and much of this new funding should go into researching ways of improving their range. The UK Government has been reluctant to bail out struggling automotive manufacturers. Jaguar Land Rovers owner Tata Motors was in discussion with the Government in late 2008 to secure a 1 billion rescue package to alleviate concerns stemming from the economic crisis. In the event the Government has subsequently ensured loan guarantees to the sector to allow access to capital for viable businesses 9 . It appears, however, that none of these loan guarantees are tied to restructuring for future low carbon opportunities. MARKET POTENTIAL Currently the vehicles on the UKs roads produce around 110 million tonnes of CO 2 annually. Clearly if all of these were to be replaced by EVs, tail-pipe CO 2 emissions would be reduced to zero and the actual carbon impact of travel would be shifted to the source of energy. Currently, the carbon intensity of the UKs National Grid is poor at around 550gCO 2 / KWh 10 . Until this gure reduces, the actual benet of EVs is not as startling as is sometimes claimed. Despite this, over a life-cycle current EVs are around 40% less carbon intensive than major alternatives 11 . This gure will only improve as the UK moves towards a less carbon intensive energy supply. Indeed, the Government estimates this gure will be closer to 55% by 2020. Any transition to EVs is likely to yield signicant results if focused on passenger cars and vans. However, the Government high range forecasts estimate that only 8% of vehicles on UK roads will be electric by 2020. Their mid range scenario predicts just 2.5% market saturation by the same date 12 . Given the substantial carbon benet of EVs, are we underestimating the need for radical policies to encourage more onto our roads? THE GOVERNMENT PREDICTS THAT ONLY 2.5% OF CARS ON OUR ROADS WILL BE ELECTRIC BY 2020. GIVEN THEIR POTENTIAL CARBON BENEFIT, IS THIS ENOUGH? BARRIERS TO ENTRY Range. Battery technology is still not mature enough to give EVs a range comparable to conventional cars. Most EVs run on a single battery pack and have a range of about 250 kilometres (160 miles). However, over 90% of two-way journeys in the UK fall within this range 13 and Government statistics show that only 1% of car journeys are over 100 miles. Despite this the development of a charging infrastructure will help to alleviate public concerns. Cost. EVs are getting cheaper but they are still around 12% more expensive than existing alternatives, due in large part to the cost of batteries. As with most new environmentally- friendly technologies, the upfront capital costs are greater but consumers are not always aware of the full life-cycle savings of EVs and the reduced cost of charging as opposed to refuelling. Charging Infrastructure. There are already tried and tested examples of plug in charging infrastructures but such systems require signicant investment. Such systems will need to be in operation before a large uptake is likely. Battery charging times can also be quite lengthy with 5 to 6 hours needed for a full recharge. Whilst this may be acceptable for most consumers there could be capacity implications if everyone charged overnight. An alternative is to have a network of battery changing stations. Standardising batteries and connections would not be difcult and re-charging could be co-ordinated with energy companies. There is also the potential for the charging stations, with their banks of charged batteries, to act as suppliers to the National Grid when demand is high. Batteries. Concerns have also been expressed about the batteries themselves. Firstly, they are heavy (circa 300kg). Secondly, proponents of EVs suggest batteries based on existing technology should exceed the average lifespan of the cars they power. Batteries should be capable of about 7,000 charges which, assuming each charge will sustain 100 miles, would deliver more than half a million miles 14 . Thirdly, the batteries most likely to be used in the majority of EVs will be based on lithium although research on the suitability of other materials is ongoing. Existing sources of lithium are nite, and some predict that they may run out within the next decade or two 15 , and there is also insufcient battery manufacturing capacity worldwide 16 . New sources of lithium or alternative technology and manufacturing capacity will need to be found if EVs are to full their market potential. GLOBAL LEADERS Despite the Governments desire to make Britain the electric car capital of Europe, we are far from global pioneers in the eld. Other Governments and authorities have been quick to see the potential of EVs, including: Israel was the rst country to radically pursue EVs. With its aim of becoming independent of oil by 2020, the Israeli Government signed contracts to deliver a recharge grid, consisting of both recharging points and battery swap stations, by 2010, with further deployment of Renault-Nissan manufactured electric cars in 2011. The Israeli Government has also agreed to give tax breaks to electric car buyers to encourage early adopters; currently cars are subject to 72% tax in Israel, whereas EVs will be subject to just 10%. As a result, 19 Israeli companies are already committed to implement EV eets 17 . Denmark, which already has more than 10,000 EVs on its roads 18 , has also pledged to deliver an electric car network by 2011. The network will include 20,000 recharging points, 150 battery swap stations and will be powered, largely, by wind power. Such a system will allow Denmark to better capture and make use of its wind energy resources; about 20% of Denmarks electricity is supplied by wind but much of this is lost as the availability of supplies does not always dovetail with peaks in energy demand electric vehicles will effectively act as storage units for the excess energy. Further, the Danish Government are to offer tax beaks on EVs. The vehicles, manufactured by Renault-Nissan, could cost up to 50% less than the average small car, particularly as existing vehicles are subject to very high taxes. Portugal. The Portuguese Government is overseeing the introduction of EVs in the country from 2011, with a network of 1,300 charging points with fast charging points in major conurbations like Lisbon and Porto. EVs, again produced by Renault-Nissan, will be marketed at a similar price to conventional alternatives. With high fuel costs, EVs are therefore likely to be attractive. Further, this new venture is likely to secure inward investment and jobs. Nissan has recently signed a letter of intent with the Portuguese Government to build a battery manufacturing plant that will create 300 jobs, with the two parties intending to invest C300 million and C400 million respectively 19 . Paris has decided to build on its successful Velib bike hire scheme with a similar electric car hire version. The scheme would include 700 pick-up points around the city with around 2,000 to 4,000 cars available. Payment mode and tariffs have not yet been set. Londons mayor, Boris Johnson, has reportedly shown interest in the possibility of adopting a similar scheme in London. The mayor also recently set up the London Electric Vehicle Partnership, which is designed to accelerate introduction of low carbon vehicles in the capital. Institution of Mechanical Engineers 1 Birdcage Walk Westminster London SW1H 9JJ T 020 7304 6862 F 020 7222 8553 publicaffairs @ imeche.org www.imeche.org/policy HOW CAN BRITAIN BECOME THE ELECTRIC CAR CAPITAL OF EUROPE? Whilst the Government rhetoric seems to be pro- EVs, the reality is that we are behind some of our European colleagues. Denmark, Portugal and Paris are all pursuing ambitious plans to implement EV networks on a grand scale. These networks are likely to be delivered in as little as two years with further up-take to be encouraged using various scal incentives. In turn, this has added economic benets. The Danes will be able to use their wind energy resources much more effectively and, despite global conditions, the Portuguese are already beneting from foreign direct investment from Japanese rms. If the UK Government doesnt take action now, the likelihood of achieving its stated emissions targets as well as stabilising a stricken automotive sector and preparing it for an innovative, competitive future is slim. The Government has pumped signicant, and welcome, funds into research, development and demonstration of low carbon vehicles, but they neither have committed to building an EV network of any size nor signalled their intention to do so in the near future. Time is running out not only because our carbon emissions are still increasing but also because our national competitors are getting ahead and our automotive industry is struggling. We must act now. So how does IMechE suggest the UK capitalise on the considerable potential of EVs? Remove the Barriers to Entry. EVs have limited ranges, which despite the fact that only 1% of car journeys are over 100 miles, is seen as a disadvantage. Denmark is solving this problem by developing a network of battery swapping stations that effectively extend vehicle range. This will require signicant public sector investment and the removal of planning barriers to facilitate widespread adoption of EVs. No bail out without EV research. Any funds used to bail out UK based automotive companies should be specically linked to EV research commitments. Incentives, incentives. The marginal social cost of pollution and CO 2 has not yet been effectively internalised by the market. By reducing the cost of more favourable technologies, Government can encourage use of less polluting transport choices. Denmark, Portugal and Israel are all planning signicant tax breaks for business users and consumers. Electric vehicles tend to be cheap to run but the upfront capital costs tend to be high. In short, Government has a role to play in making EVs nancially attractive. Ensure Low Carbon Standards in Government Procurement. The public sector is a huge user of vehicles. Introducing standards favouring EVs where appropriate will not only reduce carbon emissions but also set an example for consumers and businesses. If EVs are to become the norm then public perception must change. Government must lead the way and use EVs as much as possible and set low emissions limits for the remainder of their eet. REFERENCES 1 BERR & DfT (2008). Investigation into the scope of the Transport Sector to Switch to Electric Vehicles. 2 www.thisismoney.co.uk/news/article. html?in_article_id=421263&in_page_id=2 3 SMMT (2008). Motor Industry Facts 2008. 4 www.news.bbc.co.uk/1/hi/business/7901092.stm 5 www.gknplc.com/news/NewsItem.asp?La stPage=NewsHome&NewsID=373 6 http://ec.europa.eu/environment/air/ transport/co2/co2_home.htm 7 Technology Strategy Board, Low Carbon Vehicles Innovation Platform. http://www.innovateuk. org/_assets/pdf/competition-documents/ lowcarbonvehicles_innovation%20platform.pdf 8 http://nds.coi.gov.uk/environment/fullDetail.asp?ReleaseID= 389762&NewsAreaID=2&NavigatedFromDepartment=False 9 http://nds.coi.gov.uk/environment/fullDetail.asp?ReleaseID =391023&NewsAreaID=2&NavigatedFromDepartment=True 10 DEFRA carbon emissions reporting guidelines electricity conversion factors. 11 BERR & Dft (2008). Investigation into the scope of the Transport Sector to Switch to Electric Vehicles. 12 Ibid. 13 Ibid. 14 www.iht.com/articles/2008/01/21/business/cars.php 15 www.news.bbc.co.uk/1/hi/business/7707847.stm 16 BERR & DfT (2008). Investigation into the scope of the Transport Sector to Switch to Electric Vehicles. 17 www.globes.co.il/serveen/globes/DocView. asp?did=1000428168&d=1725 18 International Energy Agency (2007). Implementing Agreement on Hybrid and Electric Vehicles. 19 http://uk.reuters.com/article/oilRpt/idUKL221820020090302