CMA announces market study into UK electric vehicle charging

United Kingdom

Earlier today, the 2nd December 2020, the CMA launched a market study into the UK electric vehicle (EV) charging market. This follows increased interest and support in the UK for the sector, including from the Government’s commitment to net zero emissions by 2050, bringing forward the ban on the sale of new petrol and diesel cars to 2030 (as reported on here), and its National Infrastructure Strategy which includes commitments on the roll-out of EV charging infrastructure. The CMA’s own 2020/21 annual plan also includes a commitment on climate change, to act in a way that supports the transition to a lower carbon economy.

Unlike most other CMA market studies which examine well established markets with emerging concerns, it is recognised that this sector is still in its infancy. The review is therefore aimed at making the sector work well for customers as it grows, providing the CMA with the opportunity to ensure that there is a competitive and consumer-friendly EV charging sector across the UK in the longer term.

Market studies are one type of tool that the CMA can use to examine possible competition or consumer protection concerns – and while it may conclude that parts of the market are working well, it can also find that some are not. The CMA has highlighted that in this case it will keep an open mind as to any outcomes or combination of outcomes that may be appropriate.

The CMA observes that research shows that ‘range anxiety’ or not being able to recharge while being out and about is a key concern for many consumers. It is also recognised that where people can see that EV charging services will work for them, they are more likely to make the switch to EVs – which is crucial to achieving the government’s climate change goals.

It is emphasised that there has been a significant increase in the number of chargepoints in the UK in recent years, with a 632% increase since 2015 – there are now 19,487 public chargepoints available in the UK, offering a total number of 34,573 connection points. It is also recognised that there are an estimated 141,400 chargepoints registered for private use at home, and almost 9,000 registered workplace chargepoints. However, in order to meet future demand, EV charging infrastructure will need to grow significantly in the UK across all types and locations of EV charger.

Background

The CMA’s Invitation to comment recognises and explains different elements of the EV charging landscape including:

- Different types of electric vehicles, including all-electric and plug-in hybrids;

- Different locations of chargepoints, including: off-street home charging for EV owners with a driveway or garage; on-street chargepoints set up for the kerbside; ‘hubs’ where multiple chargepoints are installed together; at workplaces with a car parking space; at ‘key destinations’ consumers have travelled to including shopping centres and other places with car parks; and along travel routes to allow motorists to recharge on a journey – usually long distance and at motorway service stations and similar;

- Different speeds of EV chargers, including rapid/ultra-rapid, fast, and slow, referring to the power output of the charger and the consequent charging time, each of which are suitable in different contexts (and also of course the appropriate type of connecter which connects the EV and the chargepoint).

The CMA also explores the current key players in the EV charging landscape across the UK including:

- existing chargepoint operators including independent operators and owners of networks, EV manufacturers, energy companies, and other established players in the oil and gas markets; and

- other players including local authorities, motorway services, and retailers and businesses who are important in the roll-out of EV chargepoints, and distribution network operators and price comparison websites.

Scope

The market study, which will include all types of EV charge points i.e. both public and private, will assess two main themes, covering both competition and consumer related aspects:

1. How to develop a competitive sector while also attracting private investment to help the sector grow: including how competition may help develop the sector, issues such as concentration and the use of data, incentives to build EV infrastructure, existing or potential barriers to entry and expansion in the sector, and how different policy approaches can build on current support, including the role of local authorities; and

2. How to ensure people using EV chargepoints have confidence that they can get the best out of the service: including consumer interaction in the sector and potential challenges such as making informed decisions on charging, whether complexities such as price and payment options make it difficult to compare and switch providers, and factors impacting on the chargepoint experience like access and availability.

Areas excluded from the market study are broader aspects of electricity supply and grid/network capacity and upstream aspects of charging infrastructure, such as chargepoint manufacture, maintenance or software.

Possible outcomes

Following a market study, the CMA has a range of options to address any issues identified, including guidance to consumers or a consumer awareness campaign, guidance to the sector (i.e. on price transparency and presenting information on prices), and recommendations to the government where additional support is required (i.e. to local authorities) or where policy or regulatory intervention is needed. Other options can include making a reference for a market investigation or taking direct enforcement action. The CMA has highlighted that in this case it will keep an open mind as to any outcomes or combination of outcomes that may be appropriate.

Next steps

The CMA will now gather evidence from a range of interested parties including from consumers, businesses and other interested parties. The CMA is inviting responses to its Invitation to comment by 5 January 2021 on the various issues raised.

It is interesting that the CMA has decided to launch a market study into UK EV charging at this time, given the UK’s recent increased focus on net zero emissions at a national level, and the importance of the national charging infrastructure network for this to succeed. In particular, the wide scope of the CMA’s market study includes different aspects of the EV market which have not yet received much attention by regulators, in addition to looking at how the market fits together for an EV customer perspective. This means that the CMA process and findings are likely to influence the future development of the market, meaning that investors, network operators and other stakeholders will need actively to engage with it.