CES Las Vegas underlined the extraordinary ingenuity and investment pouring into EVs: the convention featured everything from autonomous tractors to next-gen racing cars. Among the stars of the show was Honda, which showcased prototypes for the Xpeng G6 and the Honda 0 SUV, set to compete with Tesla’s new Model Y ‘Juniper’. Other highlights included a new “more intuitive” EV navigational solution from Intellias and Zeekr; and the SEA (Sustainable Experience Architecture) battery platform that will be used by Google-owned Waymo for its next iteration of autonomous vehicles.
This upbeat start to the year was echoed closer to home with news that BT Group is ordering 3,500 new EVs. This bold commitment means that the firm will have one of the UK’s largest EV fleets.
Longer term, the outlook for the EVs is less clear cut. One of the big unknowns is 2025 will be the impact of politicians and policy-makers. Incoming US president Donald Trump is promising a new era of protectionism and has also made it clear he will back expansion in oil and gas (‘drill baby drill’). Europe, meanwhile, is anxious about cut-price Chinese EVs flooding the Eurozone, and has already slapped punitive tariffs on them.
In part two of a two-part series asking industry experts to explore the prospects for the UK and European EV and electrification in 2025, thought leaders from EV broadcasting, OEMs, battery storage and EV dry battery technology, give their views on key trends shaping the sector this year.
David Mitchell, Chief Growth Officer, Futurice UK
Cost and convenience will be key watchwords in 2025
For most people, cost and convenience continue to be the critical factors that influence their decision to buy an EV. So alongside aggressive pricing from manufacturers, I expect more innovation around the packaging of EVs and the ancillary services related to them. Companies like Octopus Energy that are removing the complexity from EV financing, servicing, repairs, insurance etc, will help accelerate the transition to EVs by removing the mental load for consumers and making the transition a much smoother experience.
Imaginative test drives are key to EV take-up
The opportunity to try driving an EV will continue to be a deciding factor for consumers considering switching. EVs are a much better driving experience than many people realise. If manufacturers come up with more imaginative and enticing EV test drive experiences – eg loaning an EV over a weekend – or developing themed test drive days where customers can try out a broad range of EVs in different locations - consumers will be more likely to buy them.
Vehicle- to -grid charging could be an opportunity for fleets
Vehicle-to-grid charging is often framed as an opportunity for individual consumers. But it could be an interesting development for businesses with large EV fleets which in a way are a huge collective power source. There is a lot of volatility in renewable energy generation due to its intermittent nature, so companies with fleets might be in a position to balance the load on the grid – and generate revenues in return for doing so.
Imogen Bhogal – Fully Charged.Show Presenter & EV Advocate
Affordability tipping point on the horizon
There is a tension about the role electric vehicles should play in the overall mobility mix, which makes the subject complicated and a bit messy. Some news outlets will tell you electric car sales are falling off a cliff, but that’s definitely not true. The rate of uptake has slowed, but the overall number is still growing. What is really interesting about 2025 to 2027 is that we are going to see a greater influx of low-cost electric vehicles, almost giving us parity costwise to petrol and diesel equivalents. We’re also seeing greater choice and compelling price points in the second hand market. I think this is going to be a tipping point in terms of how the cost of running EVs is perceived.
Policy interventions that could drive EV take up
One contentious policy area is the different tiers of VAT on electricity usage. If you use electricity to charge at home, you pay 5% VAT, if you charge on the public network, it’s 20% VAT. That disproportionately impacts people without driveways and doesn’t strike me as an equitable way to drive adoption of EVs. So maybe there is a case for a 5% VAT level playing field. Another policy concern is the impact of planning permission. Funds are available for local authorities to deploy charging infrastructure, but getting planning permission remains a major bottleneck for progressing at a suitable rate to give drivers confidence that there are enough charge points around. And finally restoring the plug-in car grant. Having that plug-in car grant available would go a long way to making EVs more accessible to more people, while also providing the confidence and conviction that the future of driving is electric.
Steve Catlin - Experienced Automotive Lead OEM (formerly MD Volvo Car Financial Services UK).
Infrastructure roll-out requires cross-sector collaboration to meet demand
The transition to electric vehicles (EVs) is one of the most significant challenges facing the UK auto sector today. As the government aims for a net-zero carbon economy by 2050, automakers must rapidly adapt their production lines to meet stringent emissions regulations and consumer expectations for sustainable mobility. This transition requires substantial investments in new technology, infrastructure, and workforce training, presenting both opportunities and hurdles.
One major challenge is the high cost of developing EV technology and the necessary battery manufacturing capabilities. Automakers are under pressure to scale up production while managing costs, especially as they work hard to manage the supply side of the equation. OEMs are now starting to see the fruits of previous years’ investments. However, consumer demand is not yet sufficient to match either supply or the government-mandated targets. As a result, the auto sector is actively lobbying for either an easing of these targets or additional incentives to elevate demand levels.
Infrastructure development is another critical area requiring attention. A widespread and accessible EV charging network is essential to support the increasing number of electric vehicles on the road. This necessitates collaboration between the government, private sector, and energy providers to facilitate investment in charging stations and grid upgrades.
Auto industry needs to demonstrate self-reliance in EV transition
In my view, at a time when the government is facing significant calls for support, it remains up to the industry itself to navigate these challenges and demonstrate its innovation and determination to make the transition to EVs a success. A skilled workforce is also needed to support this technological shift, as the industry must address potential skills gaps through training and education programmes.
While the transition to EVs presents challenges for the UK auto sector, it also offers a pivotal opportunity for innovation and sustainable growth that aligns with global climate goals.
Dr Jennifer Channell, Commercial & Partnerships Lead, Anaphite
US change of government may impact investment in European BEV supply chains
While global adoption of EVs will continue to grow into 2025, European market share will remain flat. This will be driven by EU-imposed tariffs on imports of affordable Chinese BEVs, combined with the slow-down of BEV manufacture in the West. I also expect that uncertainty around the future of the Inflation Reduction Act and Bipartisan Infrastructure Law caused by the change in government will create a slow-down in BEV supply chain projects in the US, in
favour of investment in hydrogen and carbon capture and storage projects. With continued support available through European programmes, we may see this encourage greater investment in European supply chains.
Battery innovations will play critical role in carbon reduction
Cost will continue to be a key factor driving EV decisions, but sustainability is starting to play a bigger part with the EU Batteries Regulation celebrating its first year of implementation. The regulation requires those putting batteries on the market to declare the embodied carbon accumulated through the supply chain and manufacturing of their batteries. This means the market is crying out for solutions to drive down the cost and carbon emissions of batteries. Dry battery electrode coating technology is a key solution that will enable battery manufacturers to achieve both of these goals, reducing manufacturing cost by 40% and energy consumption by 30%.
Jonathan Carrier, Founder and CEO, Allye Energy
Jury still out on vehicle–to–grid charging
There is a lot of interest in bi-directional vehicle–to–grid charging and some companies like VW have already introduced it into their vehicles. But I think there will need to be more trials before this capability is deployed in a major way. Ultimately the technology part will be solved and the validation of the technology will come through the pilots, the trials, showing it to regulators, and everything else. But the problem is, it comes down to a fundamental economic equation of, is it really worth it? Right now, the financial incentives for consumers to participate in vehicle-to-grid are not very compelling which is leading to some reluctance. I think consumers are more concerned about the degradation of their EV batteries than the money they can make by returning energy to the grid, so the technology will require more trials and bigger incentives to persuade consumers it is worthwhile doing.
Tariffs on Chinese car imports could depress used EV market
I’m not convinced tariffs are ever positive, because of their impact on competition. In the context of the EV sector, there is also potential for them to create more volatile pricing and cause consumers to delay purchasing decisions. If that happens, it could affect residual values of EVs. That’s bad for the sector, because the used market is so much bigger than the market for new registrations. When cars are sold several times during their lifespan, tariff-induced turbulence is an issue. In the UK, this issue is exacerbated by the government’s budget which could increase inflation – causing further reluctance among consumers and fleet owners to commit to EVs.
Challenges ahead for Europe, particularly automotive powerhouse Germany
The Eurozone’s economic growth is currently as weak as the UK’s, and Germany is feeling a lot of the pressure. Germany is grappling with volatile energy prices, and is faced with the prospect of Mercedes, BMW and Volkswagen shutting plants for the first time. Similarly, Ford in Europe is primarily a German company and has also begun cutting its workforce. I think we will see more protectionism and industrial shrinkage in Germany, brought about by the macro-economic environment and the impact of energy prices. The end result will be increasing pressure on the European Union from manufacturers and some individual countries to relax EV targets.
