When it comes to tackling climate change, the customer is always right!

Lord Barker on why the EV sector is listening to customers in the drive to Net Zero

You could be forgiven for thinking that the publication this month of the seventh UK Carbon Budget published by the Climate Change Committee (“CCC”), dealing with the period 2038 to 2042, seems less than pressing. With so many immediate global challenges crashing over us thick and fast, it is little wonder that some politicians just want to park climate action in the “ not now, too difficult” box and certainly don’t want to plan for 2042. But that would be devastatingly short sighted. Most importantly, it would ignore the huge progress that Great Britain has already made on the path to Net Zero.

Global geo-politics may be in turmoil but one thing remains absolutely, scientifically certain. The earth is still warming and mankind has our future in its hands. So our political leaders will just have to deal with more than one challenge on their plate,  because global warming won’t stop without continued, concerted action.

Today, I am chairman of The Electric Vehicle Network (EVN), the leading developer and investor of ultra-fast charging stations for public and commercial electric vehicles. However, back in 2008 when the Climate Change Act was passed in Parliament, I was not just an MP but also the Conservative Shadow Climate Minister and I had the privilege to serve on the Parliamentary Committee that scrutinised and improved the Climate legislation as it went through the House of Commons. Together, working across Party, we helped pass amendments that increased the ambition and the effectiveness of the Bill that set legally binding targets to reduce UK carbon emissions and created the Climate Change Committee and the Carbon Budgets that it proposes. The same Climate Committee that has just recommended targets for 2043.

Seventeen years on from that hopeful and far-sighted legislation, how has it actually all turned out? Well, Great Britain has done amazingly! We knew when setting those targets that we were marching into the unknown. There was no certainty that the carbon targets could be met, much of the required technology was still to be invented or at least commercialised at a price that made economic sense. The whole optimistic approach had a “space mission” feel to it. Yet there was also unequivocal conviction that it was the right thing to do. And remarkably, tremendous progress has already been made.

Today emissions have fallen by over 50 % from 1990 levels. We now produce less carbon pollution than we did in the final years of Queen Victoria. In fact, just seventeen years on from the Climate Act being passed into law, we are now in touching distance of the 60% reduction target that was set down in the original draft legislation, (until the ambition was raised to 80% in committee and then again to Net Zero by Theresa May).

Thanks in large part to the phasing out of dirty old coal power stations and the creation of the world’s largest offshore wind industry, Britain has become a global low carbon leader. That should be celebrated. The lights have not gone out and the only real energy shock has been the unprecedented rise in oil and gas prices following the invasion of Ukraine. But there is no room for complacency. Energy security remains a real concern and much more needs to be done to build greater resilience into our electricity system. Critics of the dash to renewables are not entirely without valid concerns.

Twenty years ago I wrote a pamphlet “Power to the People”  extolling the virtues of decentralised energy. Back then it was seen by the electricity industry as a distraction. Today dynamic, decentralised energy producers, empowered by new technology and market reform, are a vital part of the future of the grid.

So what does the latest Carbon Budget say of the future? There is no doubting that hard yards lay ahead, particularly in decarbonising the way we heat our homes. But I was really encouraged to hear that the Climate Change Committee is not just pontificating from on high but is listening to consumers and carefully studying the latest market trends. Many of the recommendations in this latest report, go with the progressive direction of changing consumer tastes and choices. That is exactly as it should be in a market-based economy. And nowhere is that more evident than in the growing demand for electric vehicles.

That said, 2024 was not a good year for the European EV sector as a whole. Q3 culminated in what I could only describe as a huge collective wobble. Manufacturers across Europe worried about disappointing sales figures and the UK government appeared to lose its nerve and announced a review of targets and measures to support the EV sector. However, I am certain that we are now past “peak wobble”.

In this latest Carbon Budget, by 2040 the CCC still expects three quarters of cars and vans on the road to be electric, up from only 2.8% of cars and 1.4% of vans in 2023. “The share of new car and van sales that are electric is anticipated to grow quickly, ahead of the zero-emission vehicle mandate, reaching around 95% by 2030. This is propelled by the falling cost of batteries, which allows electric cars to reach price parity with comparable electric and diesel vehicles between 2026 and 2028. The CCC Pathway also assumes that battery-electric vehicles are chosen to decarbonise all HGVs”. In short, the pace of change in the UK car market is about to accelerate dramatically!!

The customers for new cars are slowly but surely recognising that the changing nature of driving is evolving for the better. And despite a blip last year, the latest sales of cars in the UK confirm that.EV sales are back up. In short, electric vehicles are getting cheaper and more exciting. Thanks to both the quickening roll out of charging infrastructure and the increasing efficiency of batteries, consumer ‘range anxiety’ is also starting to ebb.

The fact that EV’s now out-sell new ICE cars in China, without any consumer subsidy (but thanks to a heavily subsidised early industrial policy), feels to me like the tip of a wave that will soon break over the UK, just as the Japanese motor industry did in the 1970s. The Chinese EV’s are selling like wildfire in their market because they are great value and give a terrific driving experience. European manufacturers are not so far behind.

While there is still a long way to go before we have a mature EV market in the UK, there are clear lessons from the success of our own nascent EV industry for other sectors of the economy that also face the prospect of daunting change to meet the Net Zero challenge.

So what might those lessons be? Don’t just rely on government subsidy and legislation. Listen to the customer. At EVN we know that unrelenting innovation and an uncompromising approach to quality and customer service are the real secrets to growing our market.

When it comes to such important decisions as buying a new car for yourself, your family or your business, the EV industry can’t rely on “green guilt” changing buying patterns. Nor in the long term, can you rely on government subsidy or targets. The consumer will always win. The product and service just has to be better than the alternative. That is certainly what thousands of new EV drivers are increasingly experiencing.

At EVN we know that there is simply no substitute for an unbeatable customer proposition. The onus is on every business to work out what that means for them and innovate accordingly. And if you listen carefully for it, that was the pro-consumer message in the latest report from the Climate Change Committee.

Greg Barker, Lord Barker of Battle, is chairman of EVN and served as Climate Change Minister in the Coalition Government