Switching on to Electric Cars
12th November 2018
As the legal framework, and infrastructure to support the use of electric vehicles develops, WJM Trainee Alyson Shaw surveys what is now in place and the major changes needed ahead of planned growth in their use.
What are electric vehicles?
Electric vehicles (EVs) are alternative fuel cars designed, and introduced, in an effort to substantially reduce the percentage of greenhouse gas emissions attributable to road transport. Categorised as a type of ultra-low emission vehicle (ULEV), EVs can range from plug-in hybrids, which combine a small battery, internal combustion engine and electric motor, to all-electric vehicles, which are powered solely by mains electricity.
Setting the wheels in motion: recent political developments
In recent years, both the Scottish and UK Governments have increased their focus on EVs, stating their intention to promote air quality initiatives, the uptake of fuel-efficient motoring and, ultimately, build on the UK’s charging infrastructure. Some milestones over the past year or so have been:
September 2017: Scottish Government announces its intention to phase out petrol and diesel vehicles by 2032, with Nicola Sturgeon pledging to expand the number of electric charging points in rural, urban and domestic settings, and convert the A9 into Scotland’s first fully electric-enabled highway.
27 November 2017: UK Government publishes its industrial strategy and vows to “support electric vehicles through £400 million of charging infrastructure investment and an extra £100 million to extend the plug-in car grant”.
February 2018: UK Government makes a further £30 million investment in “Vehicle 2 Grid”, a technology enabling consumers to feed the energy stored in their electric vehicles back into the national grid at times of peak demand.
6 July 2018: HMRC releases a policy paper designed to encourage employers to provide charging facilities for plug-in vehicles at or near the workplace, by proposing the removal of income tax and national insurance liability for workplace charging.
9 July 2018: UK Department for Transport publishes “Road to Zero Strategy”, outlining its plan to end the sale of conventional petrol and diesel cars and vans by 2040.
19 July 2018: The Automated and Electric Vehicles Act receives Royal Assent.
According to recent Government announcements, it is anticipated that ultra-low emission vehicles will make up over 50% of global car sales by 2040, and 100% of the UK’s car fleet by 2050. For more information, see Road to Zero.
The road ahead: what are the main challenges?
One of the most significant barriers to the global adoption of electric vehicles is the question of how, when and where they will be recharged. Indeed, ease of access has been identified as one of the most significant factors influencing prospective purchasers today and, if mass adoption of these low-emission alternatives is to be achieved, consumers will require an infrastructure network that is both accessible and usable.
In recognition of this, and as part of its policy objective, the Department for Transport has promised to:
o consult on the installation of charge points in all newly constructed homes and street lighting columns in residential areas;
o expand the Electric Vehicle Home Charge Scheme by offering £500 grants to owners of electric vehicles who install charge points in their home;
o launch an Electric Vehicle Energy Taskforce – combining the energy and automotive industries – to ensure the UK’s energy infrastructure can meet the increased demand of electric vehicles; and
o launch a £400 million Charging Infrastructure Investment Fund to encourage the rollout of charging infrastructure by providing financial backing to companies that produce and install charge points.
A combination of Government funding and private investment has already led to the production of over 150,000 ultra-low emission vehicles, and over 14,000 public charging points, in the UK. These figures could be set to increase dramatically in the coming months amid proposals for standardised payment methods, EV-compatible connectors, and minimum prescribed standards for the maintenance and design of charge points.
B. Network congestion
In exercise of the powers granted by part 2 of the Automated and Electric Vehicles Act 2018, which received Royal Assent on 19 July, the Government is now in a position to enhance the EV consumer experience by securing prime charging locations – in petrol stations and motorway service areas – and ensuring that all charge point installations have, incorporated into them, “smart” technology. It follows that all public charge points will be able to receive, interpret and respond to third party information, enabling consumers to avoid network pressures by charging their vehicles at times when the demand is lower and the price cheaper.
C. Connection to the network
Increased use of EVs will, in turn, increase demand for electricity, and thus additional generation capacity will soon become necessary to meet both peak and off-peak demand. National Grid estimates that, by 2050, EVs will contribute an extra 30% on top of today’s peak electricity demand, making it all the more likely that centralised charging, in retail businesses, workplaces and public roads, will soon become the norm.
Home chargers will most likely be accommodated within an existing network connection, on the basis that the property’s supply capacity is capable of coping with the demand placed on it. Consumers of these individual charge points will simply be required to meet the cost of installation, with the installer notifying the distribution network operators (DNOs).
Upgrade and extension works, and construction of new substations, may be required where larger capacity and/or multiple charge points are installed. In all cases, the type of charging point being installed – ranging from slow (3kW) to rapid (43kW+) – will determine the cost of connection to the grid. As an indication, SP Energy Networks estimates the cost for installing rapid chargers to be in the region of £100,000-£1 million, with works including a review of the existing network, design work, high voltage connection work and construction of new high voltage substations.
Driving change – a new legal market?
As indicated by the Government, the transition to EV technology will be market led and will throw up an array of new legal issues for sector participants, including EV installers, car manufacturers, local authorities, commercial and residential developers, electricity providers, supply chains and consumers.
The mass uptake of electric vehicles will see both EV installers and network operators negotiate lease arrangements with Scottish landowners, in order to regulate their rights of access in, through and across private land for the purposes of installing and maintaining charge points, and securing a connection to the grid. Third party consents may also be required where, for example, title to the land is subject to a secured interest.
New electric licensing schemes could mean that corporate entities seeking to offer charging services to consumers will require to enter into contractual arrangements with existing electricity suppliers or, alternatively, take steps to become licensed providers themselves.
The 2018 Act has also extended the traditional motor insurance settlement framework to recognise claims for damages caused by the fault of an automated vehicle itself, as opposed to its driver. It follows that, where an accident is caused by a vehicle in self-drive mode, insurers will find themselves liable for damages stemming from that accident, with their only prospect of recovery being a claim against the vehicle manufacturer or other third party.
The passing of the 2018 Act is a welcome development for the UK automotive industry. By establishing a framework for technological and commercial innovation it will create an exciting and lucrative market opportunity for Scottish solicitors, particularly those operating in the renewable energy, property and planning sectors.
Cleaner, greener transport
Ahead of September’s zero-emission vehicle summit, and in an effort to boost public awareness of clean vehicle technology, Theresa May announced the Government’s proposals to fit special, green number plates on low emission vehicles. If implemented, the proposals will see drivers of ULEVs receive special privileges, including access to special bus lanes, charging bays and low emission zones.
Whether the promise of these badges of honour will see a surge in zero-emission vehicle sales does, of course, remain to be seen. What is clear, however, is that initiatives like these will be critical in accelerating the UK’s transition away from petrol and diesel, towards the electric vehicle revolution.
The information contained in this newsletter is for general guidance only and represents our understanding of relevant law and practice as at November 2018. Wright, Johnston & Mackenzie LLP cannot be held responsible for any action taken or not taken in reliance upon the contents. Specific advice should be taken on any individual matter. Transmissions to or from our email system and calls to or from our offices may be monitored and/or recorded for regulatory purposes. Authorised and regulated by the Financial Conduct Authority. Registered office: 302 St Vincent Street, Glasgow, G2 5RZ. A limited liability partnership registered in Scotland, number SO 300336.