Written evidence from the Competition and Markets Authority (ELV0072)

Submission to Lords Environment and Climate Change Committee for their Inquiry into Electric Vehicles

Introduction

The Competition and Markets Authority (CMA) is an independent non-Ministerial UK government department. We help people, businesses, and the UK economy by promoting competitive markets and tackling unfair behaviour.

The CMA has a role in providing advice and recommendations to government and public authorities.[1] The CMA’s advice and recommendations are made with a view to ensuring that policy decisions take account of the impacts on competition and on consumers.

The UK government has committed to reducing greenhouse gas emissions by 28% by 2035 and moving to Net Zero by 2050. The majority of these emissions come from cars,[2] and therefore a smooth transition to electric vehicles (EVs) will be critical to achieving the UK government’s legally binding commitments for Net Zero carbon emissions by 2050.[3] To support this transition, it is essential that there is a comprehensive and competitive EV charging network in place, one that people can trust and they are confident using – much like filling up with petrol or diesel. Concerns about the reliability of chargepoints, difficulties in comparing prices and paying for charging, risk reducing people’s confidence and trust. Building trust in the sector is vital for successful EV take-up, particularly at this early stage.

The CMA concluded its EV charging market study in July 2021.[4] The study and its recommendations outlined how to promote strong competition, encourage more investment, and build people’s trust in EV charging infrastructure across the UK. This reflects the CMA’s objectives to promote competitive markets that support productivity, innovation, and sustainable growth for the benefit of people, businesses, and the wider economy, as outlined in the CMA’s Annual Plan.[5]

Our submission draws on the main findings and recommendations of our market study. It sets out the challenges and barriers associated with EV charging infrastructure roll-out and our view on the required actions to ensure the UK achieves the necessary improvements in this area.

EV Charging Market Study – Main Findings

While we found that some parts of this new sector are developing relatively well – including charging at locations like shopping centres, workplaces, and private parking such as garages and driveways – the CMA found that other areas are facing problems which will hinder roll-out. Our recommendations can be found in an annex to this submission.

In particular, the CMA was concerned about the choice and availability of charge points at motorway service areas (MSAs), where competition is very limited; the roll-out of on-street charging by Local Authorities (which many drivers, particularly those without private parking, will rely on); and the risk that rural areas may be left behind with too few chargepoints due to lack of investment.

We found that chargepoints are not being installed fast enough and that access to charging varies depending on where you live in the UK.[6] We found that many EV drivers find charging to be complex, confusing, and frustrating at times. Reliability can be poor, there is a lack of live data on availability, and it can be difficult to find, compare and pay for charging easily.

To meet demand, the market alone will struggle to deliver the pace and type of EV charging infrastructure needed. There needs to be active government involvement in the EV charging sector to deliver a comprehensive network.

While transport is partly devolved and approaches across the UK to EV charging vary, we found that the broad challenges were similar and therefore the recommendations from our market study are UK-wide. Recognising that circumstances and needs may be different across the UK, we emphasised in our market study the need for governments across the UK to share their experiences to help deliver a comprehensive network for the whole of the UK.

Following our market study, the CMA also launched a competition law investigation into long-term exclusive arrangements between the Electric Highway (now owned by Gridserve) – a chargepoint provider – and three motorway service station operators – MOTO, Roadchef and Extra. We concluded this investigation in 2022 when we accepted commitments that addressed the CMA’s competition concerns.[7] Gridserve committed to neither renewing nor enforcing the exclusivity arrangements it made with the three MSAs.[8]

UK government Response and Progress Made

We were pleased that the UK government accepted most of our recommendations. The Office for Zero Emission Vehicles (OZEV) originally consulted on how to best roll-out EV charging infrastructure in September 2021 in its Future of transport regulatory review: zero emission vehicles.[9] We understand a response to this consultation is expected to be published soon. 

The UK government published its Electric Vehicle Infrastructure Strategy in March 2022 outlining a tenfold increase in chargepoints by 2030.[10] The Strategy promised improved customer experience, and significant support focused on those without access to off-street parking, as well as on fast charging for longer journeys.

The UK government has announced several funds to support the development of EV charging infrastructure:

• The Rapid Charging Fund (RCF) is a £950 million fund to provide charging capacity at service stations (England only).
• The Local Electric Vehicle Infrastructure (LEVI) Fund provides £381 million to Local Authorities to increase the number of chargepoints (England only).
• The On-Street Residential Chargepoint Scheme (ORCS) will increase the availability of on-street chargepoints in residential streets through grant funding (UK wide).

We recommended that people using home chargepoints should benefit from flexible energy systems through simplified open data on charging. The Electric Vehicle Smart Charge Point Regulations became law in December 2021, mandating that most private (domestic and workplace) chargepoints must include smart functionality by the end of 2022, in Great Britain.

We recommended that, outside of the home or workplace, government should aim for charging an EV to become as simple as filling up. The Public Charge Point Regulations (2023) became law this year. The CMA had several meetings with OZEV officials to discuss these regulations which will mandate across the UK:

• Contactless payment for all new chargepoints 8kW and above and all existing rapid chargepoints 50kW and above within one year.
• Payment roaming with all chargepoint operators connecting to at least one third party roaming provider within two years.
• Each chargepoint operator’s network of rapid chargepoints meeting 99% reliability requirements within one year.
• A 24/7 free consumer helpline for those struggling to charge within one year.
• That chargepoint operators use the Open Charge Point Interface (OCPI) protocol to open their static and availability data to the public and government bodies within one year.

We were pleased that the UK government recognised that competition is an important factor in the development of the RCF. The CMA has worked closely with OZEV on the design and roll-out of this scheme to open competition at MSAs. The RCF is a major opportunity to foster competition at MSAs through conditions such as a minimum number of operators, open tendering and chargepoint interoperability. We will continue to offer our support to OZEV to help ensure scheme design considers how to encourage competition.[11]

The CMA recommended that rural areas, where the costs of installing EV charging infrastructure may be higher, should be prioritised. We are pleased that, amongst other factors, the LEVI Fund considers the level of rurality, factoring in the proportion of residents within the local area that live in rural areas. We look forward to seeing how the UK government will prioritise rural areas through other funding streams.

Local Authorities (LAs) are responsible for delivering a substantial part of the EV charging infrastructure required across the UK and we recommended that governments take action to properly equip LAs for this enhanced role. The CMA has attended workshops with government officials, from the Department for Transport, OZEV and the devolved administrations, along with local transport authorities on the design of the Local Electric Vehicle Infrastructure (LEVI) Fund. This group worked to offer support to LAs to roll-out EV charging infrastructure, including procurement guidance. We are pleased that the LEVI Capability Fund, a subset of the overall LEVI Fund, is now live, providing opportunities for LAs to commission their own advice or consultancy, and that the LEVI Support Body is offering guidance to LAs on chargepoint commissioning and installation.

We recommended that a public body be tasked with developing the consumer experience, as well as implementing and monitoring how well the EV charging market is working. Currently, the Public Charge Point Regulations (2023) are set to be monitored by the Office for Product Safety and Standards (OPSS). The UK government accepted this recommendation in its response to our market study and we would welcome an update whether the OPSS will continue as the public body responsible or whether a new public body will be created to oversee this growing market.

The Position in the Nations

EV charging infrastructure is a devolved policy area with transport being partly devolved. As outlined above, some UK government funds apply to England only, such as the RCF and LEVI support, while others such as ORCS are UK-wide. Progress in response to our recommendations varies in the nations with some further ahead than others. Overall, we are pleased to note that progress is being made in all three devolved nations. 

The CMA continues to engage with the devolved administrations to check on progress and offer our support and reiterates the continuing need for governments across the UK to share their experiences as they roll-out EV charging. Governments in Scotland, Wales and Northern Ireland have all published strategies to roll-out EV charging, in line with our recommendation.

The Welsh Government launched its Electric Vehicle Charging Strategy Action Plan in October 2021.[12] The action plan covers several recommendations made in our market study, including focusing on the provision of rapid charging infrastructure and on improving the user experience.

The Northern Ireland Executive published its strategy, The Path to Net Zero Energy in December 2021.[13] The Northern Ireland Executive set up an EV Infrastructure taskforce and published its EV Charging Infrastructure Plan in October 2022, supported by key public and private sector bodies.

The Scottish Government, through Transport Scotland, has published its Vision for Scotland’s Public Electric Vehicle Charging Network. It is looking to leverage private investment, marking a departure from its previous approach, whilst also committing to providing additional funding to LAs.[14] This new vision takes forward the CMA’s positions that private and public investment is needed to ensure targets are met.

Linkages with the CMA’s Road Fuel Market Study

Finally, we would like to highlight to the Committee the CMA’s recent work in our road fuel market study,[15] which focused on petrol and diesel and considered the future of the road fuel sector in the light of the shift to EVs. The study made two recommendations to the UK government, namely:

1. A new open data fuel-finder scheme, that will give drivers and, critically, third party service providers such as comparator and navigation apps, access to real-time, station-by-station fuel price data for all fuel retailers. This will help people find the cheapest fuel and drive down prices. We made clear that the fuel finder open data scheme will need statutory backing to require fuel retailers to provide up-to-date pricing data and make it available in an open and accessible format, that can be easily used by third party apps.

2. A new public monitoring function to maintain focus on the sector, with formal powers to monitor prices and margins on an ongoing basis and recommend further action if competition continues to weaken in the market. As the UK transitions to net-zero the demand for petrol and diesel will reduce. The fuel monitor will help the governments of the UK understand the impact of this, including on vulnerable consumers that remain dependent on petrol and diesel for longer, as well as those living in areas with limited choice of fuel stations, or which are not well served by electric vehicle infrastructure.

The UK government accepted our recommendations in full and asked for the CMA’s advice in developing and implementing them in the interim.[16] We have been happy to assist the UK government with this important work. The government committed to delivering the mandatory scheme backed by legislation, as soon as possible.

In response to continued high petrol and diesel prices, the CMA has developed a temporary scheme for the major retailers to make available their daily prices on a voluntary basis. This temporary scheme will not deliver all the benefits of the full open data statutory scheme, but the CMA is committed to do all it can to help drivers as swiftly as possible, whilst waiting for the government’s consultation and subsequent legislation.

Annex: EV Charging Market Study – Recommendations

The CMA’s eight recommendations enable the sector to develop in a way that boosts investment, enables competition, and makes charging as easy as filling up.

Meeting the scale of the overall challenge

1.       UK government sets out an ambitious National Strategy for rolling-out EV charging between now and 2030, alongside strategies from each of the Devolved Administrations – building on the work already underway.

2.       Ofgem and the Northern Ireland Utility Regulator (Uregni) make changes to speed up grid connections, invest strategically and lower connection costs - so that the electricity system supports roll-out.

Unlocking competition along motorways and targeting rural gaps

3.       UK government rolls-out the Rapid Charging Fund (RCF) as quickly as possible to increase capacity at motorway service stations and attaches conditions to this funding so that it opens up competition at these key sites.

4.       Off motorways, governments consider targeting funding at gaps in remote areas which may otherwise not be served.

Boosting investment and maximising competition in on-street charging

5.       Local Authorities (LAs) take a more active role in planning and managing the roll-out of on-street charging to maximise competition and protect local residents, putting in place local plans and take into account key factors we have set out.

6.       Governments take action to properly equip and incentivise LAs while also providing greater support and oversight - including providing funding for dedicated expertise and defining their role, such as through a statutory duty – in order to achieve a step change, and work with LAs to explore and pilot other ways of rolling-out on-street charging.

Creating a sector that people can trust and have confidence in

7.       UK government sets open data standards for home chargepoints, so people benefit from smart charging and flexible energy systems.

8.       UK government should ensure charging becomes as simple as filling up with petrol/diesel and tasks a public body with implementing, overseeing, and monitoring these as the sector develops to build people’s trust:

• It is easy to find working chargepoints.
• It is simple and quick to pay.
• The cost of charging is clear.
• Charging is accessible and interoperable.