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Sales of electric vehicles have been the growth vehicle segment for the second month in a row, according to new data from New AutoMotive, but the figures show the government’s ambitions for the transition to electric vehicles have fallen far short.
The company’s latest figures show that 20,837 pure electric vehicles were sold in June 2022, with electric vehicles now accounting for one-sixth of all new car registrations.
Meanwhile, hybrid vehicle sales fell to 31,531 in June 2022 from 40,265 in the same month last year.
With Electric Vehicle sales already up 16% year-on-year from 10%, the government is asking manufacturers to account for 22% of Electric Vehicle sales by the end of 2024, according to New Automotive.
This echoes the findings of the Climate Change Committee in its latest progress report, which shows that Electric Vehicle adoption is already ahead of its own and government growth projections, and highlights the willingness of consumers and households to embrace low-carbon options.
Despite a rise in electric vehicle sales in June, overall car sales fell by a quarter, and current supply has not kept up with demand despite rising gasoline and diesel prices pushing consumers to switch to electric vehicles.
“We hear that the typical delivery time for electric cars is now between 40 weeks and a year. The supply of electric vehicles is the biggest barrier to cleaner road transport in the UK,” added Nelmes.
Meanwhile, data from the Society of Motor Manufacturers and Traders showed the only year-over-year increase in vehicle sales of pure electric vehicles in June 2022.
In June 2022, Battery Electric Vehicle sales increased to 22,737 units, up 14.6% year-on-year, while overall new vehicle sales fell 24.3%.
Total car production in June was the lowest monthly production since 1996, with just 140,958 new registrations. New car sales in the first half of the year are also at their lowest level in 30 years so far, barring 2020 amid the lockdowns caused by the Covid-19 pandemic.
Continued shortages of parts, coupled with China’s coronavirus restrictions, have meant that vehicle production this year has not been able to keep up with demand, also hurting Electric Vehicle sales.
Mike Hawes, SMMT Chief Executive, said: “The semiconductor shortage is stifling the new car market even more than last year’s lockdown. Electric vehicle demand continues to be the one bright spot, as more electric cars than ever take to the road, but while this growth is welcome it is not yet enough to offset weak overall volumes, which has huge implications for fleet renewal and our ability to meet overall carbon reduction targets.”
Hawes added that drivers are “increasingly” turning to electric vehicles as fuel costs rise. The industry is working to improve its supply and prioritize the delivery of electric vehicles.
Britain will fall short of its 2035 target to decarbonise electricity without reforming the market, according to a new report from centre-right think tank Onward.
This follows the government’s April announcement of a review of the Electricity Market Arrangement in the UK’s Energy Security Strategy, which aims to address the challenges associated with intermittent renewable power generation as electricity demand is set to double by 2050.
According to Onward, the review must answer five key questions, including how affordable and safe the UK’s renewable-rich electricity system is, how the market fairly reflects the costs and benefits of different producers and customers, and how both the link between gas prices and utility bills can be broken.
The last question comes on the heels of the government, which in its June comments proposed decoupling gas and electricity as part of a series of “emergency” electricity market reforms.
In addition, REMA should ask what role the market plays compared to government investment support schemes, and what role customers play in the desired net-zero electricity system.
Based on these key questions, Onward makes three recommendations in its report Powering the Future: Why a Review of Electricity Market Arrangements Matters.
The first is the reform of wholesale and balanced markets. This would mean a major change in wholesale electricity markets, but could help tackle growing grid congestion and answer questions about the future of marginal pricing.
The think tank added that the location of customers and producers should be considered. Previous research by the Energy Systems Catapult has suggested site pricing could save £30bn by 2035.
As wholesale electricity markets reform, changes will be needed to ensure that balancing services can be integrated to ensure the grid remains secure as more renewables are added. In recent years, National Grid ESO has updated and expanded its services to meet the changing needs of a decarbonized grid, including the launch of two new spectrum services this year called Dynamic Regulation and Dynamic Moderation.
Demand for frequency services remains high, for example, the dynamic curb low clearing price hit a record high last month, reaching £105 MWh on 25 June, £1 above the previous high in April.
The second suggestion is that REMA leads reforms to support schemes for renewable energy investments, such as capacity markets and Contracts For Difference. It shows that the current system runs the risk of supporting the wrong mix of technologies, which will ultimately increase fees.
Therefore, support systems should be reformed to promote the best technology mix at affordable cost and encourage companies to operate their assets efficiently.
“Over the last 15 years successive governments have introduced a byzantine array of schemes to support different technologies,” said John Penrose, MP for Weston-super-Mare.
“But as Onward’s new report sets out, with almost all new projects getting some taxpayer-funded support, it’s not hard to see why it’s created a boom for lobbyists, with all the costs ultimately being passed on to customers. We should let energy firms find answers for our newly-modernised wholesale electricity market so they can buy the best of whatever they’ve got, rather than politicians trying to pick winners.”
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