The Trouble with Electric Cars

Philip Hammond's vision for the future of transport is one where electric vehicles (EVs) increasingly replace internal-combustion-engined (ICE) cars.

However, with the current mix of generating capacity, electric cars are not much greener than petrol or diesel at this point, although they have zero tailpipe emissions.

What is more, the basic premise that replacing ICE cars with electric vehicles is not a sound one. You might be tempted to assume that if generating capacity were a 50/50 mix between fossil and renewable sources, electric car power would be 50% renewable. This is incorrect, because every mile driven in an EV adds incrementally to the demand for power. With a 50/50 mix, when demand is high, the fossil generation capacity is being used, and as demand falls it is switched off. The electric power used to charge a car would only be renewable if all the fossil generation capacity was idle when the car was being charged.

If we start buying electric cars in 2010, there are a number of problems.
1. Effectively the cars will be fossil-fuel-powered now and for some years hence.
2. Electric cars are very heavily subsidized. They attract no VED ('road tax'), the buyer receives a £5000 purchase-price government subsidy, and the electricity attracts no fuel duty.

Let's add all that subsidy up. The purchase subsidy is £5000. If a petrol car were driven for 100,000 miles at a fuel consumption of 40MPG, that would net the exchequer around £7500 in fuel duty, plus let's say £100 VED per year for 10 years. That tots up to a £13,500 net loss to the exchequer. (I've ignored other subsidies, such as the charging-point buildout.) Boris Johnson wants the number of electric cars to rise to 100,000 by 2020. So the total subsidy for those vehicles will be £1.35Bn. That's quite a lot of money. Now consider that there are around 30M cars on Britain's roads, so that investment takes 0.3% out of the UK's oil-powered car fleet. And bear in mind, as I noted above, replacing a fossil-fuelled car with an EV does not eliminate the associated carbon emissions.

Let's imagine instead for a moment that Britain's motorists could be pursuaded to cycle 10 miles a week instead of driving. That would add up to around 500 miles a year, or 5% of their average annual mileage. Obviously, some would cycle more and some less or not at all. If we subsidized cycling by the equivalent amount of the electric car purchase subsidy alone, we would have a budget of over £8bn to spend on infrastructure, training, bicycles and what have you. This would save a lot more carbon than EVs. It will also save NHS costs due to a healthier population, likely reduce road deaths, reduce congestion and improve the urban environment.