Huge increase in charging network needed, says VW UK boss

The expansion of the UK's charging infrastructure is now not growing at a fast enough rate to support the increasing number of EVs being sold, one of the largest sellers of them has warned. And that lag in the charging network roll-out must be urgently addressed, according to Volkswagen Group UK managing director Alex Smith, who, in a wide-ranging exclusive interview, said that the mass-adoption of EVs in the UK risks being held back should the size, efficiency and reliability of the charging network not increase and that more must be done to incentivise private buyers to switch to EVs in the same way fleet buyers have been. Charging network roll-out “The charging infrastructure is improving every day, but the demand for it is increasing more quickly than it's being delivered,” said Smith. “Charging stations used to be lonely places, but now they're places where you discuss EVs with EV owners." Smith said that the UK is nearing the end of “niche adoption” of EVs and “starting to move to mass adoption” off the back of 76% growth in EV sales last year. However, he said that charging capacity grew by only a third in that same time period. For Autocar Business webinars and podcasts, visit Autocar Business Insight “It’s inevitable that we will move to mass adoption, but the pace of it is to be determined by a number of factors. Most salient is the charging infrastructure. “2022 is a pivotal year for charging infrastructure, with the charging strategy from the government due. We need to see the infrastructure being delivered ahead of the demand. That’s where confidence becomes self-perpetuating. “EV range is sufficient for the vast majority of journeys and usages and fits with peoples’ patterns. Now we want to gain confidence in the infrastructure.” The Volkswagen Group has partnered with Tesco to provide more than 400 free charging points at supermarkets – the largest free network in the UK – and recently announced a partnership with BP to provide high-powered charging at fuel stations. It's also a founder member of the Ionity changing network. Smith said it's in the Volkswagen Group’s interests to support the growth of the charging network to in turn improve the growth of EV sales but that the burden shouldn't be only on car makers. “The Volkswagen Group has a commitment to infrastructure, and we’re proud of what we’re doing, but what we’re doing is part of a large, multi-faceted solution," he said. "It’s in the interest of road-transport decarbonisation to be present in it [the charging network]. “It needs a variety of solutions, from high-power charging on major arterial routes to on-street charging as well.” Regional inequality in charging network More must be done to ensure the regional inequalities in the EV charging network are diminished, Smith believes. “We have lots of data on where we sell vehicles,” he said, “and what we see is that as the infrastructure of charging improves in a particular local area, EV sales grow rapidly afterwards. “So when EV infrastructure is supplied, sales of EVs increase. It’s therefore important to think of regional equality in terms of EV charger development. There’s a disproportionate amount of chargers in London and the south-east. It’s important to design this out in a national infrastructure. This is fundamentally important.” Smith agreed with the sentiment that range anxiety has now shifted to charging anxiety: the ability for EV owners to charge their cars away from home or work. “With EV ranges, range anxiety is really going away,” he said. “Range is sufficient in the vast amount of uses, and BEV drivers know a consistency of range and have a high confidence in the miles-per-kWh readout. So from our point of view, it’s a situation where the worry is the charging infrastructure. “I wouldn’t say people need to see more [chargers] than they need, but charging infrastructure needs to become visibly ubiquitous. Then confidence grows significantly.” Reliability of charging network When asked to give a grade on the current reliability of the UK’s charging infrastructure, Smith said: “Our concern would be that it’s variable. You can have an A+ experience, but we need a consistency of experience, and we’re not there.” Also key is much greater transparency in the price people pay when charging up on a public network, he believes. There are currently huge discrepancies between the highest and lowest amounts. “Pricing transparency is essential to consumer confidence in EV charging and also how they make that payment. Interoperability of easy payment methods is critical – and reliability. We saw last September what happened when people couldn’t get fuel.” If people fail to believe in the charging network, it will put them off buying an EV, said Smith. “If you miss a purchase opportunity, you’re a buying cycle further down the road. You need to build ahead of the demand and be ahead of the game.” Incentives for private buyers Growth in EV sales across fleet and retail buyers used to be fairly consistent. However, it has accelerated dramatically for fleet buyers since 2020, when new benefit-in-kind (BIK) tax rates for EVs dropped to 0%. At the same time, the grants for private buyers of new EVs has been progressively cut to its current rate of just £1500. Smith said: “There was 2.5% market share in retail and fleet in 2019 for EVs. Both have since seen substantial growth, but one in five fleet sales are now EV and only one in 12 in retail. Why? “Fleet is very strong for BIK incentivisation. Retail has seen a progressive reduction in incentivisation. It just shows that if we're to move rapidly [towards EVs], incentivisation has an important effect. Not just in a basic literal sense but as sending a strong message to the consumer on the direction of travel towards the decarbonisation of road vehicles. “Incentivisation in fleet taxation is there for the mid term, as we know BIK [rates] to 2025. It’s important to see that fiscal policy plans three years ahead to directly drive the fleet cycle. “Any reduction in incentivisation is at the risk of significantly reducing the road to decarobinsation.” When asked for his views on how EVs should be taxed at their point of use, be it through road pricing or another method, Smith said that it wasn't an urgent topic of discussion. “Look at the near term: if between now and 2030, 10 million EVs are sold, by 2030 there will still be 30 million internal-combustion-engined cars on the road. So this isn’t an issue to be rushed. It’s one to be carefully considered and discussed and looked at over the next few years. The priority now is to make a consumer clear that an EV is the right choice in the near term.” Future of hybrids EVs have outsold plug-in hybrids by around 50% already this year, but Smith believes that hybrids remain an important powertrain option in the transition to a fully electric vehicle parc. “Customers have a tremendous choice of powertrains,” he said. “They will look at the options and best select the one to meet their needs in terms of price and usage. What’s really important to get to decarbonisation is to get to zero-emissions-capable vehicles. The direction of travel should be to EVs, but the transition won’t shift in six months. Confidence and suitability need to be built. “I’m bullish on the projection for EVs and for customers to find them satisfying and exciting. Given how progressive British consumers are, it’s not surprising that given our portfolio that performance is growing the way it is.” The UK government is expected to soon define exactly what kind of hybrids will be allowed to be sold between 2030 and 2035, after which only fully EVs will be permitted for sale. Smith believes that this should include only plug-in hybrids and fully electric vehicles. Used EVs is another area about to experience a huge uptick in growth and demand, and it’s a market that could look quite different to today, due to the ability for EVs to be updated and upgraded remotely through software. “Demand is very strong; supply is in the early stages,” said Smith. “The vehicle technology advantages present fascinating opportunities for the value of EVs with over-the-air updates. "For 100 years or more, the car supplied and registered is the car. Now in the life of a vehicle, the value of this has changed, as the car being sold has been enhanced.”

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Huge increase in charging network needed, says VW UK boss

In an exclusive interview, Alex Smith says sales of EVs are in danger of outstripping the infrastructure

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