Earlier this month the British Government announced a £1 billion investment to help businesses make the switch to electric vans and trucks, in an attempt to combat the effects of fuel price uncertainty amidst ongoing turbulence in the Middle East. Eddie Richards, Partner, and Sadie Pitman (pictured below), Associate, both in the Real Estate team of international law firm Charles Russell Speechlys discuss.
During its General Election campaign Labour promised to make Britain a clean energy superpower and, since coming into power, it has enacted the Great British Energy Act 2025 to establish a publicly owned clean power company. The Government has therefore long been aware of the need for Britain to become independent from other nations and to accelerate investment in renewable energy technologies – but whether we are now ready to encourage reliance on electric vehicles (EVs, including commercial vehicles in logistics such as eHGVs and electric vans, is another question entirely.
Quite simply, the UK does not currently have the right infrastructure to meet an increased demand for EVs, commercial or personal. For every 24 EVs registered last year, only one public charging device was added. (China has more than one charger for every 10 EVs).
This is not a new issue. The previous Conservative Government set itself a target for every motorway service station to have a minimum of six rapid chargers (with rapid chargers adding up to a 100 miles of range for an electric vehicle), however by the end of 2023 less than half of all stations had the required number – no doubt contributing to the Government pushing back its target date for phasing out petrol cars by 2030. The Labour Government seems keenly aware of the issue – reinstating the 2030 phase-out target (albeit allowing hybrid vehicles until 2035). There is no shortage of EV charging companies with substantial capital investment behind them looking to expand into a potentially lucrative market but the lack of infrastructure and the hurdles in installing the same make it difficult to create scale. The proposed reforms to the National Planning Policy Framework that would include a new requirement for local development plans to identify areas suitable for electricity network infrastructure could go some way to solving this issue.
Industrial road users therefore face a dilemma – do they invest in EVs now or ride out the storm until UK infrastructure is where it needs to be? Marks and Spencer set itself a Net Zero target of 2040 and is therefore continuing to invest in its fleet of EVs yet many automakers are scaling back their EV production due to a lack of uptake – with less than a quarter of UK road users expecting their next car to be electric. But who can blame them when even in London (where there is one of the highest concentrations of electric chargers in the UK) users now face the added cost of a congestion charge? The conflict in the Middle East and the resulting rising fuel prices have created a surge of interest in EV vehicles but these spikes are often followed by dramatic falls when the market stabilises and so it’s unlikely to be enough for automakers to perform another U turn and start ramping their EV production back up.
Some companies are turning to biofuel as a low-carbon alternative – the Royal Mail used 27 million litres of hydrotreated vegetable oil between 2024 and 2025. Again, there is difficulty with scale. Hydrogen was at one point being touted as a credible alternative fuel for vehicles (as well as the more obvious uses in industry) but a lack of funding and mature market has led to a number of high profile schemes being withdrawn or mothballed recently in the UK with other European countries attracting significant investment instead. The Government’s reluctance to back these schemes together with their substantial investment in EV from the government suggests that they are all in on the electric horse.
The Government needs to find the correct balance of incentives and policy to drive up usage and facilitate EV reliance. Elsewhere in Europe, charge point operators can claim credits for the clean energy it sells – perhaps one measure the UK Government will consider introducing. Indeed, some of its European neighbours are leading the field – Norway has the highest per-capita number of EVs, which has evolved through a mixture of consumer incentives (low taxes, free parking, use of bus lanes etc), consistent Government policies and an impressive charging network. The UK has some way to go.
