More notice of EV funding changes requested as AA discusses 2022 outlook
22 February 2022
Author: Sean Keywood
Increased notice about changes to EV grant funding is one of the developments fleets need to see in 2022, according to the AA.
The motoring organisation's president Edmund King made the comments on its '2022 State of the Nation' webinar, which also covered topics including dealing with uncertainty, urban mobility, and the effects of EVs on the National Grid.
King explained that the UK Government's decision in December 2021 to reduce the level of its plug-in car grant, with immediate effect, from £2,500 to £1,500, had meant a financial hit for the AA's driving school operation, which is starting to roll out EVs including the Vauxhall Corsa-E and Peugeot E-208 to instructors.
He said: "On December last year when it was announced that the EV grant was cut to £1,500 overnight, that cost the driving school something like £100,000 on that day, because it meant they wouldn't get that grant.
"Obviously, they had planned for that fairly long term, so a message to government is we need prior notice, as and when technology is changing."
Other speakers on the wide-ranging webinar included AA business services director Gavin Franks, who explained what he thought would be three key themes for 2022, based on conversations with the AA's wide portfolio of corporate customers, which includes banks, insurers, large fleets, leasing companies, and manufacturers.
He said: "The first is about sustainability. This is becoming a really big issue for many companies, and I guess it's really the acceleration towards EVs but also the acceleration towards a carbon neutral future.
"[Another], a common theme through the pandemic, has been resourcing and skill sets. I guess a lot of people have re-evaluated their lives in terms of what they do and want to do going forward.
"And I guess the final piece that comes out, is we've spent the last two years trying to predict what next year is going to look like, and we keep failing, because it is such an uncertain time.
"So for me part of what we are looking at, part of the themes, is about flexibility and agility in the way you plan. Being able to pivot and move quickly as you see different trends and changes.
"There are things that happened over the past two years that accelerated the way we lead our lives, so it's [about] trying to pick up on those trends. What are the things that are going to move back to the way they were before, and what are the things that are going to be permanently changed?"
Franks said that some pandemic-prompted changes in working patterns had been evidenced by the AA's own breakdown data.
He said: "We used to see breakdowns early in the morning, with people commuting to work, and a lot in the evening as people came back from work, and the shape of that has changed completely for us. Our peak is [now] in the middle of the day.
"I do think we are going to see people getting back in their cars, we are going to see more movement of people. I also think you've got to start to play in that over the last two years the sales of new cars have been down just under 30% year-on-year, so we are seeing a lot of cars that would have been replaced by now still out on the roads, and we are starting to see some different trends around that as well.
"I think this also accelerates opportunities around EVs, because with a shortage of vehicles what you are finding is more and more people are being steered and are buying EVs."
Offering a business perspective on the year ahead, British Chambers of Commerce director general Shevaun Haviland described urban mobility and transport as a crucial issue for her organisation.
She said: "Improved infrastructure and connectivity in general has long been a core ask for us, whether it's road, rail or air, it's super important to have that connectivity between regions and nations, so that we can move people and goods around.
"We recognise and massively support the need for better transport around urban areas. That might include hire schemes, or bikes and scooters. And as the rollout of clean air zones progresses, those sorts of solutions will become more and more important."
Haviland added that while businesses were generally keen to adopt EVs, there was still uncertainty.
She said: "When I go out and visit our chambers I have regularly been asked about the move to EVs. It's something that businesses want to do, but they see significant obstacles, so they say 'I don't think I have enough charging stations around where I am, or if I do near my business but my staff have to take their vehicle home at night - do they have the infrastructure to charge the vehicles?'
"So they find it incredibly challenging and that is something we continue to work with those national and particularly local government on to address. The will is there, which is a good sign."
Another speaker on the webinar, National Grid head of future markets Graeme Cooper, took a more long-term view, discussing how widespread electrification of transport might affect power supplies in the years ahead.
He said: "By 2050 the UK will consume probably about twice the amount of electricity that it does today. To be able to do that, we are likely to have to have nearly four times the amount of clean generation that we do today. And because of that, we are going to need twice the grid capacity.
"If you think about that 100% growth in demand, most people would probably say electrified transport is quite high in that percentage. Actually, only about 20% is surface transport.
"When people say we can't go to electric vehicles because the grid can't cope, the answer is the grid will cope, and it has to cope. How will it cope? Well, the grid will evolve like it has been evolving for the past 20 years. Will it be seamless? No. But like all these things you don't know what we don't know.
"As an industry we have to just work very hard to make sure we observe problems before they come, and overcome them before they become an issue."