Sales of electric cars in the UK are not growing at a fast enough rate to meet the government’s target of having zero-emission vehicles account for 100% of new sales from 2035, according to a new report by the National Audit Office (NAO).
Despite over GBP1bn being invested to encourage the take-up of ultra-low emission cars, carbon emissions from vehicles “have not reduced in line with government’s initial expectations”, according to the report, which was published on Friday.
The data highlighted that as of September 2020, 32.9mln cars were registered in the UK, but only 1.1% of these were ultra-low emission and only 0.5% were fully electric.
“The aim to reduce carbon emissions from cars is not new and previous governments have been promoting ultra-low emission cars since 2011. To succeed they need consumers to be convinced these cars are a credible alternative to petrol and diesel particularly in terms of price and ease of charging. This requires the motor industry to supply cars people want to buy, at a price people want to pay, with a good range of models that meet different market needs and with adequate delivery timescales. There also needs to be adequate access to charge-points,” the report said.
As a result, the NAO, which scrutinises public spending for Parliament, said “substantial growth is required to ensure ultra-low emission cars increase from current levels to 100% of the new car market from 2030”, which it said will require “significant changes in the automotive manufacturing sector, increases in the availability of public charge-points and consumer confidence”.
Increased incentivisation for electric vehicle adoption in the UK could prove a boon for multiple listed firms in the space such as fuel cell makers AFC Energy PLC (LON:AFC) and Ceres Power Holdings PLC (LON:CWR) as well as clean energy specialist Proton Motor Power Systems Plc (LON:PPS).
Other beneficiaries are firms involved in the production of hydrogen as a fuel source for vehicles and other engines, such as ITM Power (LON:ITM).
More famous names in the space such as Tesla Inc (NASDAQ:TSLA) could also benefit from a quicker shift towards low emission cars, along with all the major car manufacturers, which all have ever-growing ranges of low- or no-emission cars for sale.