THE wheels are well and truly coming off the government’s campaign to make us all buy electric cars (EVs).
The latest setback came when the start-up Britishvolt collapsed into administration last month.The company planned to build a giant factory to manufacture electric car batteries in Blyth, Northumberland. However it was unable to raise the finance even to start construction.
The main reason for this failure is the uncertainty surrounding the EV market. Despite the announced ban on sales of new petrol/diesel cars from 2030, sales of electric plug-ins still account for only 16 per cent of sales in the UK. Many of these are company cars, bought purely for the tax advantages bestowed. Most private drivers are still highly reluctant to buy an EV, which can easily cost £15,000 more than a conventional model, and which is pretty much useless for anything other than around-town use. The government’s target for half of all new car sales to be electric by 2025 is pie in the sky.
It is no wonder that investors are reluctant to put hundreds of millions of pounds into a factory which could be loss-making for many years.
Shortly after the Britishvolt announcement, the boss of car-maker Kia said it had no immediate plans for a mass-market electric product because they are simply not affordable for the majority of drivers. Kia’s electric SUV, the EV6, for instance, costs more than £45,000.
Other manufacturers are in the same boat, reluctant to invest hundreds of millions in manufacturing EVs that nobody can afford to buy. In December, the president of Toyota warned that a ‘silent majority in the car industry is wondering whether EVs are really OK to have as a single option’ and that we need to be ‘realistic’ about this goal.
BMW recently announced that it would switch all production of its electric Mini from Britain to China, where its iX3 electric model is already produced. And it is China that is most likely to benefit from the ban on petrol/diesel cars. China has already surpassed Germany as the world’s second largest exporter of cars, and has Japan in its sights. China’s car manufacturers have found it difficult to break into the European car market because of the technological lead held by Europe. The switchover to EVs, however, has created a new level playing field, which China will be able to exploit with the help of lower labour and energy costs, along with their monopoly on the supply of raw materials required for batteries. One Chinese manufacturer, BYD, is now officially the world’s largest producer of EVs, having overtaken Tesla.
Another dampener on the UK electric car industry is the cost of charging. Since the rise in electricity prices, it is now dearer to run an EV than a diesel if you use a public charger. It is worse than that, though, because even home charging works out more expensive when fuel duties are excluded, the tax that EV drivers will have to pay for in one form or other eventually.
Meanwhile the Labour Party is complaining that the government is not installing enough public chargers, with only 37,000 in the UK against a 2030 target of 300,000. They don’t tell us where they would get the money for these from!
The harsh reality is that nobody but green zealots wants conventional cars banned and electric cars mandated. Not drivers. Certainly not the motor manufacturers, who will have to invest billions in new models and assembly lines while losing money as they phase out existing models. Many of these manufacturers, I suspect, will simply pack up and go away rather than incur the costs and hassle involved.
The government has of course long tried to justify its suicidal Net Zero agenda on the basis of all of the ‘green’ jobs that it claims will be created.
There are an estimated 781,000 jobs in the automotive industry, including indirect ones. Many of these are now at risk thanks to misguided government policy.
Starmer promises no more North Sea oil but Norway steps up exploration
LAST month Sir Keir Starmer promised at the World Economic Forum in Davos that Labour would end all new investment in North Sea oil and gas so that we would be forced to transition to renewables.
A week later the Norwegian Energy Minister Terje Aasland announced that Norway would offer up to 92 new blocks for hydrocarbon exploration in the new round of licensing in mature areas, stating: ‘Further exploration activity and new discoveries are important to maintain the production of oil and gas over time, both for Norway and Europe.’ Last year oil and gas generated $89.5billion in revenue for the Norwegian government on the back of record high prices.
A report from BP projects that the world will still be needing a great deal of fossil fuels in 2050, even if climate policies are significantly tightened. The Telegraph reported: ‘Investment in oil and gas production will be needed for the next three decades if the world is to avoid more shortages and price swings, BP has warned. The oil giant said in its annual energy outlook published on Monday that fossil fuels are still likely to account for about 20pc of primary energy in 2050 even under a significant tightening of climate policies.
‘Spencer Dale, chief economist at BP, said investment in new wells would therefore be needed until 2050 to ensure supply of fossil fuels matches demand. “Natural declines in existing production sources mean there needs to be continuing upstream investment in oil and natural gas over the next 30 years,” he wrote in the report.’
Apparently Starmer knows better!