Wanted: a post-Brexit industrial strategy for electric cars

When Britain was fully signed up to the EU, the EU’s German-inspired bans on most state aids meant that Whitehall couldn’t really develop a genuine industrial strategy.

EU laws ensured that the Government could never engage too directly in the creation of new, sectors of industry and services – sectors characterised by high technology, international competitiveness, and durable employment.

Elsewhere, I’ve made the case for such new sectors. Yet now, as Britain goes to the polls to reinforce its commitment to Brexit, there’s a deafening silence about how departing from the EU ought to give Britain a new chance to first debate, then create new high-tech, high-productivity, job-rich sectors. In particular, the public could debate whether, post-Brexit, the state should aid a promising new sector: electric vehicles (EVs).

Four reasons why the state should get behind EVs

1. Britain’s car industry, though still relatively buoyant, could in future face faltering sales. But that prospect doesn’t look likely with EVs. In the first quarter of 2017, sales of petrol-electric hybrids, ‘plug-in’ hybrids and all-electric cars topped 33,000, a striking 30 per cent up on Q1 2016 – hitting, too, a respectable 4.1 per cent of new car sales (Q1 2016: 3.3 per cent). EVs represent the future. It’s time to invest in them seriously, take them fully into mainstream markets, and work harder to bring about a step-change in battery power

2. The Department of Business, Enterprise and Industrial Strategy (BEIS) appears dead keen on EVs: it has trumpeted all of £78.7m of funding for research in the field, plus continued subsidies for people buying partly- and fully-electric cars and installing charge points at their homes. But so far the BEIS has done too little, too late. In January, it promised a report ‘in early 2017’ on the case for a new research institution to focus British efforts in battery technology, energy storage and grid technology, rightly believing that batteries are of ‘huge importance’ not just to consumer electronics, but also to EVs. The report isn’t out. Clearly it’s time to start planning and funding battery research on a large scale, not write another report about it

3. Britain’s scientific and technological elite has long warned that departure from the EU will endanger the paltry net funds for research and development (R&D) that the EU has given Britain prior to and since its Horizon 2020 programme. The Treasury has guaranteed to make up those funds, but that isn’t good enough. Now is the time to lay out an ambitious, low-bureaucracy programme of argument, funding and action in British state-backed science and technology, extending also to much greater cooperation with international initiatives in those fields

4. Just when sales of petrol-electric hybrids, ‘plug-in’ hybrids and all-electric cars are doing quite nicely, government ministers and Green pontificators have had second thoughts.

It’s this last point that’s actually the most fascinating. For transport minister John Hayes, demand for EVs ‘places the national grid under pressure’ – it’s a problem, not an opportunity. For the Green Alliance, a think-tank devoted to environmental leadership, EVs could be a dangerous burden on the grid: according to the executive summary of its new report, People power: how consumer choice is changing the UK energy system, ‘as few as six closely located vehicles charging together at peak time could lead to local brownouts’.

Here we have a textbook example of how the Project Fear mentality, so vigorously brandished by the Remain campaign before and since the EU Referendum last year, applies just as much to path-breaking innovation today. Embrace a future in which electric vehicles form a new British success story? Perish the thought!

Don’t charge – ‘charge smart’!

Like Whitehall, the EU does have initiatives going in EVs, but it is not really interested. Horizon 2020 projects in EV R&D mean €6m for urban three-wheelers, or €7m for climate control systems that put less strain on batteries. The emphasis is not at all on creating a whole new sector, but on cosmetic actions performed on a shoestring.

Why does elite opinion, both in London and Brussels, prove so reluctant to put EVs on a new road? Back in 2009, during a New Labour government, I pointed out that the Department for Transport’s commitment to EVs was lukewarm because it was basically hostile to personal mobility. In 2014, I added: ‘critics still fret that only wind and solar power can make EVs truly pollution-free; they add, too, that EVs are carbon-intensive to make. Others worry that EVs will overload America’s electrical power grid’.

Today, in 2017, the argument against EVs has taken a further twist. Britain’s failure to invest in new power stations has led to an enduring strain on electrical capacity. Meanwhile, iffy IT solutions, like those around the Internet of Things and ‘smart’ meters in the home, promise to ‘intelligently’ massage electricity usage downward in what is dignified as Demand Side Response. Last, electric cars, though expensive (the Nissan Leaf model that has a range of 155 miles is £24,990, and only costs less than that if you rent the batteries), are gradually becoming more popular. Put these three trends together, and behold: far from trying to dynamise advance in battery research and production, ministers have raised the alarm about EVs.

Again the hapless John Hayes shows what is at stake. He hopes that the accelerating uptake of electric cars could catalyse a wider debate on how best, the Guardian reports, ‘to manage the UK’s energy demand’. Hayes said we must ‘charge smart’, so we ‘flex demand and take advantage of spare capacity’.

There we have it. Instead of overhauling the British car industry with a concerted drive toward EVs, instead of having the sang-froid to push for some perfectly rational new product development in automotive, instead of moving sharply to build up the UK’s electricity capabilities with new gas, nuclear and tidal power plants, plus a much better grid… instead of any of this, we learn that the government, in the most limp and nervous style imaginable, is ‘already testing the use of new grid technologies in various locations around the country in preparation for the shift to electric vehicles’, and that it ‘has a role to play in coordinating markets to enable major changes to our energy infrastructure – such as the potential combination of electric vehicles and smart grids’.

The whole official atmosphere around EVs now consists of a blue funk around electricity supply, a red mist about how EVs might place an intolerable load on that supply, and a noxious attempt, once more, to get us selfish electricity and EV users to curb our excesses.

‘A lie can travel half way around the world…’

Yes, anything short of full divorce from the EU might still see Brussels trying to lord it over British state aids. But EVs really should form one of the major strands in a post-Brexit industrial strategy – a strategy which Theresa May called for when she took over the premiership, but which has since then put on the back burner.

Would a few EVs charging together really cause local brownouts, like the Green Alliance says? Well, its widely quoted executive summary point that ‘as few as six’ EVs might lead to such catastrophe is in fact a paraphrase and exaggeration of a Canadian report about how Norway’s love affair with EVs might, if duplicated in British Columbia, Canada, lead to ‘more local demand than the system can handle’.

So far, so Green – and so typically mendacious. Enough: let’s now boldly go build a new sector of electric cars, and let’s invest properly in the power stations and electricity networks that can support those cars in action.