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‘Everyone can go electric ‒ we just need a helping hand’

Lauren Pamma, programme director of the Coalition for the Decarbonisation of Transport at the Green Finance Institute (Lauren Pamma)
Lauren Pamma, programme director of the Coalition for the Decarbonisation of Transport at the Green Finance Institute (Lauren Pamma)

We all know now that electric vehicles are beneficial to everyone. Owners enjoy lower running costs than for petrol and diesel cars and escape the fluctuations in fuel costs caused by geopolitical pressures, while society as a whole enjoys cleaner air and fewer emissions.

The great news is that this knowledge is translating into more EV ownership ‒ up 50 per cent in the UK this year alone. The problem is there are still two fundamental barriers that prevent people from purchasing EVs. Potential owners are still asking: can I afford to buy an EV? And, can I easily charge it?

Despite significant progress over the past decade ‒ issues of performance and range are fast improving, purchase costs have come down and there are now well over 30,000 public chargers in the UK ‒  more needs to be done to address these two intertwined barriers.

More needs to be done to address the two fundemental barriers to EV ownership

At the Green Finance Institute, we’ve worked closely with the financial community, policymakers and industry to identify these challenges, along with some solutions to catalyse the investment that is needed to overcome them and accelerate the decarbonisation of road transport.

Firstly, we need solutions to make EV finance more simple to access. Today, as many as 92 per cent of new cars are bought on finance in the UK, and around 30 per cent of used cars. Yet because ICE cars have been around for so long, their depreciation in value is easy to predict, allowing lenders to keep margins tight and prices low. For EVs – which haven’t been around so long – depreciation is less predictable, keeping finance costs higher.

It is vital that we also inspire confidence in the long-term reliability of second-hand EVs, which are typically more affordable to run than second hand ICEs. Rapidly scaling the second-hand market will open up ownership to a vast number of people looking to buy at a lower price point.

Questions over long-term battery health could be resolved using mechanisms such as battery health certificates – a certification scheme the GFI has proposed for used vehicles, giving confidence to buyers that the remaining battery health is adequate. This would work like a type of extended warranty.

Why would anyone build charging infrastructure without a large market of EV drivers?

For charging infrastructure there remains a chicken-and-egg problem – why would you buy an EV if there is no charging infrastructure? And why would anyone build charging infrastructure without a large market of EV drivers? So we can’t solve the charging point problem without also addressing the up-front cost barrier to make sure there are potential EV owners ready to transition the moment the charging points are available.

Installers are painfully aware of this, and a key factor in deciding on installation locations is the predicted amount of use the new charging point will get. Only with the indication of high utilisation – and thus higher returns – will installers have the confidence to roll out chargers to new areas. To encourage more installation we need to either give them the assurance that there will be utilisation or provide financial guarantees to reduce the financial risk of new charge points initially being underused as potential owners slowly transition to EVs.

Utilisation linked loans are one solution

Utilisation linked loans – loans for charge-point operators, local authorities and small businesses to install chargers – are one solution we have identified to overcome this barrier. These loans are repayable based on utilisation rates; this reduces financial risk and empowers organisations to install chargers in more areas across the UK.

EV affordability and charging infrastructure is just the start, but if we’ve learnt anything from the past decade it’s that we need to tackle both barriers at the same time and with equal determination. We now have a firmer deadline to work towards: the 2030 ban on the sale of new petrol and diesel cars. By then, hopefully, electric vehicles will become the norm. We are not there yet, but we are getting closer.

To find out more about the ES campaign for electric cars visit