Will we be ready for the EV transition?

Measuring EV readiness:

The rEV Index, produced by Economist Impact and supported by bp, assesses 40 UK nations and regions on their readiness for EVs.⁶ The UK’s overall scores are also compared with those of leading EV markets—including China and European countries.

This first-of-its-kind index provides a comprehensive framework for measuring EV readiness from the point-of-view of vehicle users and producers. It assesses 23 indicators across 8 pillars of readiness, pulling together information from surveys, government policies and industry market intelligence, combined with novel analysis to estimate data which does not exist.

Over time, the index will allow the monitoring of progress towards achieving net-zero goals in the transport sector and more widely.

Will the UK be ready?

No country is expected to be fully ready for a mass market of EVs today, but the index indicates that they are all making progress in the right direction. Still, the findings reveal a number of challenges that will need to be overcome as countries continue to move towards their EV goals.

Norway comes the closest to being ready—it also has one of the most ambitious targets to achieve 100% zero-emission vehicle sales of new cars by 2025,⁷ and so is expected to be further along in its journey.

The UK has also made good progress, setting targets and providing incentives for the electric shift. But compared to leading EV markets, it ranks seventh out of nine on the rEV Index in terms of its overall readiness.

What are the next steps?

So, what do the rEV Index findings suggest as the key short-term priorities as the UK continues its transition towards EVs?

Key findings

1. Compared to consumers in the biggest global EV markets, a smaller share of consumers in the UK see themselves shifting to EVs

Consumer sentiment towards EVs can be captured through surveys and purchase decisions. Both indicate low levels of sentiment in the UK compared with other markets.

What surveys say: Based on a 2021 Ofgem survey, only a quarter of consumers (24%) intend to buy an EV in the next five years. 44% don’t think they will be ready by 2030, while 24% can never see themselves owning one.⁸ The most cited concerns include the high price, the low battery range, and perceptions of a lack of charging options. Consumers from the Netherlands are the most optimistic—over 56% would consider an EV purchase.⁹

What the market reflects: While the UK’s EV registrations have grown fiftyfold over the past decade,¹⁰ the rEV Index shows that the EV market share remains less than 1%, validating survey data on low sentiment. The share varies across the country from 0.3% in Northern Ireland to over 3% in parts of London. In comparison, the EV market share is over 2% in the Netherlands and almost 14% in Norway.

Moving ahead: EV purchase decisions can be influenced by awareness-raising about the need and the benefits. The UK has low levels of consumer sentiment despite its emphasis on public education drives on which it ranks joint-third on the rEV Index. Nationwide campaigns—such as the Go Ultra Low Campaign¹¹ and the Pod Point Electric Schools Campaign¹²—seek to encourage consumers to make the shift. The findings therefore suggest that other barriers may account for the UK’s low consumer sentiment score.

2. The short-term cost of switching to EVs for consumers is higher in the UK

According to the 2021 Ofgem survey cited above, 59% of British consumers identified price as a key factor preventing them from a switch.¹³

Comparing EV prices: In the UK, the rEV Index estimates the average cost of the most popular petrol/diesel vehicle models as £21,800 (US$30,100) while the approximate cost of equivalent electric models is £32,000 (US$44,000)—making an EV almost 50% more expensive.

But, the cost of switching to EVs is more than the purchase price. Based on a large data-collection exercise gathering the costs of owning and operating the most popular vehicle models and their electric equivalents in each market, the index reveals that it costs 1.3 times more to own an EV over a three-year period in the UK. Although annual fuel and tax costs are almost 50% lower for EVs, depreciation is significantly higher. In Norway, EVs are marginally cheaper over three years due to the tax benefits from owning an EV.

Accounting for income: What drives purchase decisions is not just the cost, but how this compares to income levels. In the UK, the average cost of an EV is equivalent to the average GDP per person. In Norway, average GDP is nearly double the cost of an EV. Across the UK, affordability is the highest in London where, in some boroughs, average income levels are over five times the national average.

3. The UK is expanding charging infrastructure, but the available speed does not fully meet needs

In addition to high prices, 38% of British consumers indicate apprehension about EVs due to a lack of charging points.¹⁴ The rEV Index finds that the UK has a relatively high density of charging, but the total speed offered does not fully meet consumer needs.

Developments in infrastructure: The UK has over 24,000 charge points, equivalent to six for every 100km of road network. In London, charging density is over 30 times higher than this average. While growth is needed as EV demand accelerates—analysis by the Competition and Markets Authority (CMA) estimates a tenfold expansion needed by 2030¹⁵—the UK’s position compares favourably against many EV markets.

Beyond quantities: The number of charge points indicates ease of access to charging, but it does not provide a full picture of infrastructure maturity. In the Netherlands, while there are more than 50 charge points every 100km, 98% offer a speed below 43kW. An average EV would require up to six hours to fully charge, so these are useful only when EVs are parked for long time periods.

Although the UK has a smaller share of slow charge points (~80%), less than 5% offer a speed above 100kW. These ultra-fast charge points account for 12% of charge points in Germany and Sweden, and 35% in China.

Does it matter? There are benefits to slow charging. Some studies show that rapid charging can diminish battery life,¹⁶ and batteries can be expensive to replace. Also, in places where drivers can access off-street parking to charge overnight, slow charging can be sufficient. Similarly, fast or ultra-fast charging is not needed if drivers charge at work or in places where they are stationary for extended periods of time. But on highways and at service stations, drivers need to be able to charge at pace. The rEV Index shows that while 15% of drivers in the UK prefer the latter locations, less than 5% of charge points would make quick charging feasible.

4. Energy systems need to develop to leverage the benefits of the EV transition

As consumer concerns are addressed and EV uptake accelerates, energy-system upgrades will be important to maximise the environmental benefits. Growth in EV demand presents a risk to energy systems if electricity demand is not managed and capacity gaps are not addressed.

Maximising EV benefits: EVs help reduce the emissions created by one of the most polluting sectors. But they still require energy to manufacture and use and so continue to contribute to emissions. Analysis by Carbon Brief shows that in countries where electricity generation is coal-intensive, fully electric vehicles can generate similar levels of emissions as hybrids which run on fuel and electricity.¹⁷

In Norway, 98% of energy is renewable. Meanwhile in the UK, while there are planned infrastructure projects to shift towards renewable energy, currently only 42% of electricity is generated from renewable sources.¹⁸ Wales and Yorkshire and the Humber have made the greatest progress in decarbonising their electricity generation, but in London, only 2% of electricity is renewable¹⁹ and so, despite the high levels of EV uptake, the benefits are reduced.

Preparing energy systems: In the UK, the rEV Index estimates available grid capacity of 30%, compared to over 80% in Germany and Sweden. As increasing numbers of industries including transport begin to electrify, pressures on the grid network will build. Therefore, to prepare the energy sector for EVs, capacity will need to expand alongside demand-management measures to reduce spikes in demand.

Parts of the country are recognising the need to build energy supply-side resilience by managing demand—Scotland, London and the North East of England have plans to develop smart grid systems. But a cross-country coordinated effort is needed to prepare the entire grid network for the EV transition.

5. There is wide disparity across the UK in terms of EV policies and uptake

Although the UK ranks seventh out of nine countries in the rEV Index, parts of the country perform exceedingly well. Moving forward, a coordinated approach will ensure that the UK in its entirety is ready for EVs.

Policy disparities are reflected in uptake: London performs particularly well, not only within the UK, but also compared to other countries—alone, it would rank fifth on the index. London’s score, along with other high-scoring parts of the country including Scotland, reflects disparities in the policy and infrastructure environment which lead to different levels of uptake and readiness.

Surveys highlight two key barriers to EV uptake in the UK: affordability and infrastructure. In terms of affordability, while EV costs in London match the rest of the country, average wealth levels are significantly higher. From a charging perspective, again the distribution is skewed—London has roughly 30 times the number of charge points for every 100km compared to the UK average. It also has a higher share of ultra-fast charge points, with 6% (compared to 3% across the UK) offering a speed greater than 100kW.

Local policies and incentives for EVs also vary. To support the development of infrastructure, London has implemented The London Plan²⁰ which requires 20% of bays in residential developments, 10% in retail developments and 20% at workplaces to have charge point provision. Edinburgh City Council’s Edinburgh Design Guide (2017)²¹ sets similar requirements.