Questions Face U.K. Plan to Ban Gasoline, Diesel LVs

The U.K. government’s plan to ban the sale of new diesel and gasoline cars and vans by 2040 is in danger of short-circuiting, with experts warning 10 new power stations are needed to handle the increased electricity demand.

The ban also will apply to new hybrid vehicles with an electric motor and gasoline or diesel engine.

“The shift to ultra-low- and zero-emission vehicles is well under way and will continue to gather pace over the coming years as we move towards 2040, by which point the government will end the sale of all new conventional petrol and diesel cars and vans,” a government paper says.

“This shift will resolve our air-quality problem as combustion engines gradually disappear from the streets of our towns and cities, some as soon as the early 2020s.”

Society of Motor Manufacturers and Traders data shows June sales of all-electric vehicles rose 45.7% year-on-year to 1,466 units out of a market of 243,454 – a 0.06% share.

First-half EV deliveries were up 46.1% to 7,694 units, a 0.05% share of the 1,401,811 total sales.

The Automobile Assn. says the move to an all-EV fleet will place unprecedented strain on the National Grid in meeting massive demand for power as EVs are recharged after each evening rush hour.

A National Grid report quoted by The Telegraph newspaper in London says peak demand for electricity would rise 50% and predicts the U.K. will be forced to increase its reliance on imported electricity. This would climb from 10% now to about 33% and would raise questions about energy security.

Environment Secretary Michael Gove suggests more wind energy may be needed to meet the demand, although his Conservative government has issued a manifesto promise against more wind farms.

There also are concerns about whether there are enough charging points for a U.K.-wide EV fleet.

However, the government says new automated- and electric-vehicle legislation will allow it to require the installation of charge points for EVs at freeway service areas and large fuel retailers.

Chargemaster, the U.K.’s largest provider of EV charging infrastructure, says it provides access to more than 5,600 public charging points, more than 40% of the total.

The government also announces a £255 million ($294 million) fund to help local governments tackle diesel-vehicle emissions as part of a £3 billion ($3.9 billion) package of spending on air quality.

The moves come after the High Court ordered the government to produce by July 31 new plans to handle levels of the pollutant nitrogen dioxide above those permitted by the European Union.

The government in the autumn will gather views on measures to support motorists, residents and businesses affected by local emissions-reduction plans – such as retrofitting, subsidized ride-sharing memberships, exemptions from vehicle restrictions, or a targeted scrappage scheme for car and van drivers.

The BBC quotes SMMT CEO Mike Hawes as saying demand for alternatively fueled vehicles is growing but is still at a very low level.

“The industry…wants a positive approach which gives consumers incentives to purchase these cars,” Hawes says. “We could undermine the U.K.’s successful automotive sector if we don’t allow enough time for the industry to adjust.”

British Vehicle Rental and Leasing Assn. CEO Gerry Keaney says the 2040 zero-emissions target provides a clear deadline for vehicle manufacturers.

“We think car owners should be encouraged to look at more sustainable modes of transport, and the government should give them credits to use for car rental, car-club (ride-sharing) memberships or public transport,” he says in a statement.

Meantime, Keaney says, “With so many unanswered questions about charging infrastructure, grid capacity and the affordability and availability of electric vehicles, we need a clearer roadmap on the government’s 2040 vision.”

Elsewhere, the accounting and tax company Blick Rothenberg says a ban on gasoline and diesel cars would hit the government’s tax take. Excise and value-added taxes account for about 62% of the price of fuel.

Manager Mark Cunningham says the government faces a tough choice between maintaining tax revenues and encouraging the move toward EVs.

“As the number of electric vehicles in the U.K. increases, we could see further significant changes to capital-allowance and the company-car tax rates,” Cunningham says in a statement.

“Ultimately we will see electric charging stations being run by the current petrol and diesel suppliers; they will need to provide fast charging and that is when the tax regime will change.”

Blick Rothenberg partner Alan Pearce predicts that with the growth in EV charging points at businesses and homes, “we could see the government increasing the 5% rate of VAT on domestic electricity to compensate for the loss of duty and VAT on carbon fuels.”

Meantime, the Government Office for Science announces it will investigate how technological developments and disruptive business models will affect the transport of people and goods up to 2040.

“Policy makers need to think about the longer-term future of transport in order to make informed decisions today to shape the way people and goods move in the future,” says Mark Walport, the government’s chief scientific adviser.