The UK’s EV industry is at a critical juncture. Recent changes to the ZEV mandate mean that a much-debated ban on the sale of new petrol and diesel cars has been delayed by five years to 2035. But this extra breathing space—widely interpreted as an attempt by former PM Rishi Sunak to garner votes—doesn’t change the fact that the UK is engaged in a do-or-die race to transition drivers, infrastructure, and the entire auto sector to an all-electric future.
Recent data suggests consumer interest in EVs is waning due to high interest rates, elevated prices and lingering concerns about charging infrastructure. Deloitte’s 2024 Global Automotive Consumer Study found that issues like range anxiety, charging time and the availability of charging stations continue to give buyers pause. And, while EV fleet sales remain strong, consumer enquiries are down a hefty 65% year-on-year.
Sluggish EV production and supply chain growth are also hampering the UK’s hopes of attracting investment as a global electric leader. Britain currently has just one gigafactory capable of producing batteries at scale, with an output of 2GWh, far behind countries like Germany and France.
Despite these challenges, the latest edition of the Futurice E40 Report portrays a buoyant EV landscape: one where innovators are pushing ahead with everything from state-of-the-art battery tech to solutions for last-mile logistics. News that Tata-owned Agratas is building a £4bn Somerset gigafactory, creating 4,000 green tech jobs, is another sign that we have the momentum not just to shift purchase patterns – but also to affect wider social change. Here’s why, based on a series of key themes in the emerging UK market:
More choice, lower costs: According to trade body the SMMT, UK motorists can now choose from 102 zero-emission models – designed to cater for every segment of the market. Some have a range of 450 miles, more than treble the average distance drivers travel in a week. And government statistics point to a 47% increase in zero-emission vehicles on the road last year.
Meanwhile, sector leaders like Tesla and BYD are dropping prices to stimulate growth. At the same time, the shift to flexible, subscription-based EVs (led by companies including Onto and Octopus EV) may partly account for varying levels of demand.
Circular energy strategies: In the past year, UK energy suppliers and major auto manufacturers have made huge strides towards an integrated ecosystem that connects homes, vehicles, and the grid.
Octopus Energy is pioneering the UK’s first mass-market V2G tariff, while Tesla, BMW, and VW are pushing ahead with models capable of bidirectional charging. V2G tech is also being championed by ev.energy, OVO Energy, and charge management platform Electric Miles. All this moves towards the introduction of simpler and cheaper energy systems for homes, giving the EV transition a more obvious incentive.
Democratisation of charging and energy prices: Companies like Fastned, Gridserve and MFG are investing huge sums in the rollout of fast-charging points across the UK. In parallel, many businesses are working on community-led solutions for the estimated 40% of UK residents without access to off-road private charging.
EV players such as Connected Kerb are at the forefront of this effort, developing new infrastructure for on-street and wheelchair-accessible charging in underserved areas including the North East. In tandem, the company has also created a relaunched app designed to unlock smart charging benefits in public spaces – with more affordable tariffs previously limited to owners of private charging.
Ripple Energy has also made a name for itself by unveiling a series of wind farms co-owned by members of the public. Participating in the cutting-edge scheme allows stakeholders to reduce their bills, enabling “people to buffer themselves against the uncertainty of energy price caps.”
An innovation sandpit: For all the accusations of inertia, the UK has established a leadership position in several areas of innovation over the past 12 months. For example, the progress of hydro-electric aviation pioneer ZeroAvia illustrates how some of the industry’s most seismic developments are taking place beyond EV cars.
With global airlines placing nearly 2,000 pre-orders for its trailblazing engines, ZeroAvia joins air taxi startup Vertical Aerospace and landing infrastructure platform Skyports in breaking ground for the future of electric aviation in the UK.
Other milestone moments in the UK include Zenobē’s debut battery storage site, with enough wind energy to power 130,000 homes for two hours, and bidirectional charging expert Indra’s large-scale V2H trial involving hundreds of UK participants.
Despite all of these promising trends, the UK’s status as an EV superpower continues to hang in the balance. Much depends on strong support from the incoming Labour government, with Stellantis firing its own warning shot in the run-up to this month’s election.
Leaders interviewed for the E40 Report call for various forms of action from the UK’s new political leaders. Zapmap co-founder and COO Melanie Shufflebotham wants the government to provide education and clear facts, and equalise VAT on domestic and public charging. Steve Catlin, managing director at Volvo Car Financial Services, urges progress to be made on interoperability. Imogen Bhogal of Fully Charged suggests, “We need to focus more on electric transport as a whole – not just cars. Electric buses, cycling infrastructure and more visible charging locations all play into the government-led education piece we’re lacking.”
With the right industrial strategy, EV players across the UK EV scene could take advantage of a predicted (time limited) £24 billion opportunity especially in the areas of electric machines, batteries and power electronics. To date, our EV industry has shown its commitment to innovation, partnerships and boundary-stretching ideas. But the new government must back this transformation with a bold, long-term plan of action of its own – or risk watching the EV revolution pass Britain by.
About the Author
Matthew Edwards is managing director of Futurice UK, where he leads a team of 35 people who imagine, design and build innovative digital solutions for varied clients across the UK and US.Futurice is an outcome focussed digital transformation agency headquartered in Helsinki. Matthew has played a key role in developing a UK-US client portfolio over the last 5 years, growing the business and working with some of the world’s largest enterprises.
