UK ‘s rocketing electricity costs will ‘undermine transition to EVs’

The UK’s rocketing electricity prices will slow the transition to electric vehicles in coming years.

That’s a key finding of the SMMT Sustainability Report 2022 which said that the rise in energy costs, and industry and government’s desire to move to net zero, have ensured that energy has become an increasingly significant issue for the automotive sector.

Energy is the second largest ‘in-house’ manufacturing cost, after labour, and so is critical to competitiveness.

Last year gas and electricity prices in the UK rose by 73.5% and 17.2% respectively with automotive manufacturers reporting even larger rises.

The UK now has the highest prices of electricity in Europe, 59% above the EU average.

“High electricity prices will undermine the transition to electric vehicles. They are more energy intensive to make, putting UK-based sites at a disadvantage for investment decisions,” said the report.

“It also makes the economics of running an electric vehicle less attractive from a consumer perspective.

“The move to decarbonise the electricity supply sector will help make using electricity more attractive from a environmental perspective for businesses, but must be balanced with cost containment.

“On a positive note, a business case for on-site renewables with battery storage will look more positive.”