The electric vehicle market is expected to continue growing in 2022, surpassing diesel vehicles. Alongside this growth, the charging infrastructure must maintain its momentum and ensure it can keep up with demand. Alan McCleave, Regional Manager UK and Nordics at NewMotion, spoke to The Logistics Point about trends, expectations, opportunities and challenges that lie in front of the EV market.
“Looking forward to 2022, we can’t avoid the challenges presented by COVID-19 and the impact it had on the EV market”, begins McCleave. With repeated lockdowns, offices closed and declines in demand, the pandemic created uncertainties within the industry. In addition, the semiconductor shortages experienced at the beginning of the year and continuing throughout 2021, caused delays in deliveries of both vehicles and EV chargers as well as other electronics.
Despite these challenges, the logistics industry is certainly looking more into incorporating EVs into its operations. McCleave continues, “The good news is that demand has gone crazy, particularly in the logistics sector.” He explains that more companies are now actively working on projects and ordering EVs, with the ramp
up of commercial electric vehicles having been very noticeable in 2021.
There is government support available for those logistics organisations that are looking to increase the adoption rate and speed up implementations. The OZEV grant for example, which is changing in 2022 to support those in rented properties and apartments, can help employers install EV charging stations in their employees’ homes at a lower cost. Advancements in technology are allowing employees to automatically charge the cost of charging their EV back to their employer. Undoubtedly, this would be highly beneficial for last mile operations and encourage sustainability within the sector.
On the other hand, the importance of staff retention within the logistics sector will continue to increase, as employers invest in installing charge points into employees’ homes. Additionally, other administrative problems can turn installing charging stations at homes into a challenging mission. According to OZEV, charging stations can be installed with a grant at rental properties and apartments only (owned homes with off street parking would no longer qualify from April 22). This is great news for those living in cities and highly populated areas where rental properties and apartments dominate.
The challenges that lie ahead for the logistics sector involve increasing this level of support from the government and businesses and providing EV chargers for all employees. Partnering with charge point providers can support businesses to install charge points and with the latest technologies, such as smart charging, further encourage employees to get on board with the schemes.
Challenges are evident, but McCleave is optimistic about the charging network globally. Countries are investing in their
networks, and this will only improve. “It will take a while for EVs to catch up with petrol,” he explains. “Range is a factor for commercial EVs, but the biggest reason is price, although logistics providers will be able to reap the long-term benefits of owning an EV with lower running costs.”
“A lot of logistics companies know they need to invest more upfront for EVS but the total cost of ownership overtime is much lower.” McCleave also highlighted the changes in technology and the battery weight. New technologies are being researched that could be gamechangers and affect carrying capacity positively.
McCleave continues, “It’s unfortunate that the second-hand market has been affected due to the supply chain shortages of new vehicles.” Older models became more expensive, which has priced out a significant proportion of the population. But there is hope – the expectations are that the market will stabilise when chips are widely available again. For this to happen, more manufacturing facilities will be needed. Furthermore, EV companies will need to increase distribution capabilities and match this to traditional manufacturers in order to continue supplying EVs and drive down price. The demand is there – and it’s inevitable that supply will meet demand and continue the upward trend.
“The transition to EVs is happening much quicker in the business sector than among retail consumers,” McCleave says. That is being driven by tax incentives, as well as the overall belief the sector needs to move quickly. “B2B is accelerating the fastest we have ever seen it.” It might have taken over 10 years to have around 2% of cars as electric or hybrid but McCleave believes that we will reach 10% in the next 2 to 3 years. The acceleration after that will happen much faster, and charging networks are geared up to match demand.