Recent misinformation around the EV transition is disappointing, but not surprising
Misinformation around new, disruptive green technology has long been rife and is often propagated by those who stand to lose the most from the transition to a cleaner economy. Electric vehicles are often the target of such misinformation, and contrarian narratives around the UK’s switch to electric appear regularly.
However, the newly released report “Economic impacts of the 2030 – 2040 bans on the sale of fossil fuel vehicles”, carried out by consultancy firm Cebr, may be one of the most ill-informed and inaccurate pieces of analysis on the transition to be released in recent times.
Cebr have taken accurate facts and figures, which could have been used to compile a compelling and insightful report, and wilfully ignored them. Instead of accurately analysing the available information, Cebr twisted the facts and employed questionable methodologies to appease the client that commissioned the report; the anti-EV lobby group FairFuel UK. Many readers may be familiar with FairFuel UK, an organisation widely known both for its outright denial of the climate crisis and for having a flexible relationship with the truth.
The central purpose of this report is to assert that the transition to electric vehicles will cost each British household £14,700. In order to generate this figure Cebr has combined several wildly different methodologies to “calculate” the cost of the transition to British consumers, government, and businesses. It has then added them all up and come to a bizarre total cost figure.
This figure is, to put it bluntly, simply wildly inaccurate. The transition to electric vehicles will not incur net costs; in fact, EVs are set to save motorists a whopping £193 billion between 2022 and 2050 (CCC 2019: ‘Net Zero - Technical Report’, see ‘Net-Zero Exhibits - Surface Transport’). And of course we cannot nickel and dime the risks from climate breakdown.
Given the extent of the fantasy and creativity involved in the report, taking the time to respond to each individual piece of misinformation it includes would simply take too long. Instead, this piece will unpack just how and why its main three assertions are incorrect.
New Vehicle Purchase Costs: Price Parity, Fuel Duty, and VAT
Cebr’s report asserts that, over the course of the transition, new vehicle purchases will cost the UK £188 billion. To get this figure, Cebr has made some wild and unjustifiable assumptions.
The first is that EVs will remain the same price from today, all the way until 2050. Over the last ten years we have seen EVs fall in price, with this drop largely driven by battery prices falling in parallel over the same period. A briefing by BNEF and T&E suggests that battery costs could fall a further 60% in the coming decade - speeding EVs towards price parity with ICE vehicles. Even if this doesn’t occur, price parity will occur in the next few years, as manufacturers switch production priority to EVs and this increase in supply sees prices drop. This assumption is a huge one, and one which is hard to justify. Luckily, Cebr have avoided this difficulty by not explaining why they think EV prices will remain static for the next 28 years.
The second bizarre assumption the report makes is that certain taxes - namely VAT and fuel duty - will soon cease to exist. For the purposes of its calculations, the report only considers fuel costs without fuel duty or VAT applied. In a rare example of transparency in the report, Cebr explain they have discounted these taxes as they are examining resource costs only. However, this is not consistent throughout the report, and when it is convenient for them Cebr have included taxes in their calculations. For example, there is no indication that electricity costs are considered without VAT. Moreover, there is no indication in the report about what fuel or electricity prices are used.
The reason for this omission is obvious; if VAT and fuel duty were included in the relevant calculations, these calculations would demonstrate that there will be significant savings for motorists generated by the UK’s switch to electric transport.
Figure 1: “Economic impacts of the 2030 – 2040 bans on the sale of fossil fuel vehicles”, Page 22
Later on in the report Cebr apparently forgets that they are only considering resource costs; page 25 states that the government will have to recoup the loss of fuel duty and VAT on fuel that comes from the transition. According to Cebr, the government will be forced to recoup this money through additional taxation or public spending cuts.
Returning to the real world, New AutoMotive’s Fuel-Cost Tracker tool - launched today - charts changes in the per mile running costs of electric, diesel, and petrol cars over time. The tool converts energy cost figures into a per mile cost for each fuel type and automatically updates each week as the relevant prices change over time. The tracker shows that, as of October 10th 2022, an EV charged on a standard electricity tariff is 23.65% cheaper to run per mile than an ICE car, and an EV charged on an EV specific energy tariff is just over 56% cheaper. The simple fact is that EVs save drivers money right now, and will save drivers money tomorrow, next week, and in six months time.
To help people understand their own running cost savings, we’ve created a running cost calculator. To see how much you can save, go to https://electriccar.guide/ev-comparison
Time Costs: Time is Money
Cebr seems to have taken the old phrase ‘time is money’ very literally in this section. It has cleverly determined the monetary value of time, and used this to determine that the time we will all spend charging electric cars will cost the country a whopping £47 billion.
This figure is determined despite the report itself explaining that most people charged at home overnight, public charging was relatively uncommon (occurring on average 1-2 times a week), and, when it did occur, was largely seamlessly incorporated into drivers’ daily routines and was actually significantly less disruptive than filling up at a service station. These facts are presented to the reader, and then immediately discounted; “this will not always be the case”, Cebr sagely tells us.
In addition to the obvious problems associated with assigning a monetary value to people's time, the report purposefully ignores the UK’s 33,000 workplace chargers when discussing available EV infrastructure. If time really is money, then surely the best time to charge is when people are actually generating income. Has this income been factored into Cebr’s calculations? Somehow, we suspect not. To understand how ridiculous the reports assertions around time-cost are, imagine if you made the same calculations around the advent of the iPhone. How much time do we all spend recharging on our iPhones? And how much unaccounted cost does this mean the iPhone is responsible for? Perhaps Cebr could calculate it for us.
Infrastructure Costs: Heat Pumps & EV Chargers
The last conclusion the report makes is that there will be £99 billion in infrastructure and electricity generation costs incurred on the road to 2050. If you had hoped Cebr might have bucked the trend and got this one right, you will be disappointed. Again, some incredible and slightly strange assumptions have been made to reach this figure.
On page 23, the report notes that the National Infrastructure Commission estimated a cost will be incurred by electricity distribution networks as a result of the transition to EVs and heat pumps. That cost is then “used as the basis of estimating the impact of the increase in EVs on the grid”. We at New AutoMotive are somewhat confused as to what an assessment of the costs and benefits of the EV transition has got to do with heat pumps. Again, as with many parts of the report, the methodology for working out these costs are vague at best - Cebr are nothing if not consistent. They acknowledge that there are technologies that mean EVs could be used to assist the function of the grid, via energy storage, but this fact is quickly discounted. The report also seems to allude to the fact that their methodology assumes the 10 million EV drivers which will exist in 2050 will be charging every night, at the exact time - once again, by Cebr’s own admission, this assumption is demonstrably false.
Disappointing, But Not Surprising
It is disappointing to see a well respected research organisation knowingly use flawed methodologies to support a set of conclusions that were clearly determined prior to the research being carried out. A report as flawed as this should not be allowed to damage the reputation of a technology which will help to save motorists money, reduce our country’s transport related emissions, and help drastically improve air quality and protect the natural environment. FairFuel states that they want to save motorists money. It is sadly ironic that they are spending so much money opposing the most effective means to do this.
If you would like to find out more about the costs and benefits associated with the transition to electric vehicles, we produced a Q&A in 2020, when the government announced the policy.