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Knowledge: Arlen Pettitt extols the many virtues of the North East electric vehicle industry and calls for the market is serves, and the important principles it represents, to be taken to the next level, as it has been so highly impressively in Norway

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Arlen Pettitt

arlen.pettitt@neechamber.co.uk
@NEEChamberArlen

In 2017, the Government announced it would ban the sale of new petrol and diesel cars by 2040 as part of a grand strategic vision to reduce emissions entitled ‘The Road to Zero’.

Strategies such as these, while sounding bold and decisive in theory, often unravel when confronted with the practicalities of the real world.

In this case, the initial criticism was of a lack of ambition – twenty years is a long time; it could be six or seven cars if you’re someone who always trades up at the end of a personal contract purchase term.

The subsequent criticism was of the lack of support for the industry and consumers. In 2018, the financial incentives in the form of the plug-in car grant were cut completely for hybrids and reduced from £4,500 to £3,500 for fully electric vehicles.

As of May, plug-in and hybrid vehicles made up 6.6 per cent of new vehicle registrations, but there is still a long way to go, with alternative fuelled cars accounting for just two per cent of the more than 32 million cars in use in the UK.

“Clean air is high on the agenda for the region, with Newcastle, Gateshead and North Tyneside required by government to take action on hotspots of pollution across Tyneside’s road network.”

The latest market share statistics released by the European Automobile Manufacturers Association (ACEA) put the UK broadly in line with France and Germany, but lagging behind a number of other European countries, including the Netherlands, Finland and Sweden.

The ACEA links this variation to GDP, with the extra cost associated with electric vehicles meaning nations which are wealthier on average tending to have higher proportions of electric vehicle sales.

However, nowhere in the world can match Norway, where electric vehicles are approaching 60% of total sales.

Norway does have a high GDP per capita, of course, but not high enough to explain the difference alone.

So, what has Norway done the UK could learn from?

Having made a clear policy decision in the early 1990s to support electric vehicles, they’ve then stuck to it, with generous financial and practical incentives designed to boost demand.

Norwegians buying an electric vehicle weren’t required to pay VAT on it, saving 25 per cent on the purchase price; they were exempt from road tax and tolls; they could park for free in many major urban areas; they could use bus lanes.

Most of these incentives remain in place, despite the maturity of the Norwegian market.

There’s infrastructure too, with 7,600 charging points for Norway’s population of just over five million, and less than 100,000 miles of roads.

In the UK, by comparison, we have two-and-a-half times the charging points with more than 17,000, but 12 times the population and four times the road mileage.

The Office for Low Emission Vehicles (OLEV) is responsible for administering the UK government’s support for electric vehicles – including on-street and at-home charging infrastructure and those vehicles eligible for the plug-in grant.

The OLEV has a war chest of £900m, but Norway’s incentives are worth more than £500m a year and have been for 30 years.

In short, we’re talking about a commitment on a different scale – both financially and symbolically.

In that context, it’s no wonder that the Nissan Leaf was the best-selling car in Norway in 2018.

In the North East, we built 21,000 of those Nissans, drawing on a deep-rooted supply chain across the region.

We’re not short of expertise in electric vehicles, renewable energy and future technologies.

In Cramlington, Avid Technology produce powertrain systems for electric and hybrid vehicles, working with the likes of Caterpillar and Jaguar Land Rover.

In Gateshead, BorgWarner carry out research and development of electric motor control technology as part of a multi-billion-dollar global group.

In Consett, Elmtronics provide electric charging equipment, as well as management systems and an app for users of chargers.

The region has the supporting environment too, with the Transport Operations Research Group based at Newcastle University and consultancy Zero Carbon Futures which was spun out of Gateshead College.

Both the North East Local Enterprise Partnership’s Strategic Economic Plan and Transport for the North’s Strategic Transport Plan for the North identify four prime capabilities in the region – advanced manufacturing, digital, energy and health and life sciences.

It’s not too much of a stretch to argue that the electric vehicle sector cuts across all four, with the motivations for advances in health and energy in particular coupling with the motivations for the future of the electric vehicle sector.

Clean air is high on the agenda for the region, with Newcastle, Gateshead and North Tyneside required by government to take action on hotspots of pollution across Tyneside’s road network.

To meet air quality targets, both locally to the North East and wider national goals, we’ll need to change the way we travel – part of that will be increased use of public transport; part will be using flexible working to reduce travel overall; and part will be maturing the nation’s electric vehicle market.

Fundamentally, the bones of all of this exist but the challenge is to take it mainstream. 

In the North East in 2017, we averaged 1.05 cars per household, with 29 per cent of households having no car at all – compared to 1.21 cars per household across England as a whole, and 24 per cent carless households.

As a result, we naturally rely more heavily on public transport, but we also travel less – our average commute is shorter than anywhere else in the country, and we travel amongst the shortest distance for business and education.

Considering the geography of our region, that speaks more to a closing of horizons than it does to a developed ‘post- travel’ economy – people just live, work and study in closer proximity, potentially missing out on opportunities which are a bit more difficult to get to.

Future investment in the region’s infrastructure needs to address this, and it needs to draw on all those prime capabilities of the region – we can be a healthy region, an innovative one, and a sustainable one if we take aim at the electric vehicle sector and make it a core part of the future of the region’s economy.