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Friday, June 14, 2024
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HomeClimate WatchThe climate scaremongers: The great electric car crash

The climate scaremongers: The great electric car crash

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THE government’s electric car (EV) rollout is rapidly running off the rails. Its Zero Emissions Vehicle (ZEV) mandate demands that 22 per cent of UK car registrations this year must be electric. Any manufacturer falling short of this target must pay a fine of £15,000 for each car below target, or buy ZEV allowances from manufacturers who exceed the target. (They are also allowed to carry forward deficits, but this will simply add to their costs in future years).

But EV sales continue to stagnate. So far this year they account for only 15.7 per cent, barely up on last year.

As often pointed out in this column, very few drivers want to buy cars which are totally unfit for purpose for most people. So far the government has relied largely on fleet and business sales, which have been more buoyant because of generous government subsidies. But there is a limit to these sales, and private buyers for the most part are simply not interested. Without them EV sales will remain in the doldrums.

So what will motor manufacturers do? They clearly cannot afford to pay multiple fines of £15,000. This column predicted a few months ago that their only option will be to cut sales of petrol and diesel cars to get the ratio back to 22 per cent, and this is exactly what Ford intend to do. Martin Sander, general manager at Ford Model e Europe, told the Financial Times Future of the Car Summit in London earlier this month: ‘We can’t push EVs into the market against demand. We’re not going to pay penalties. We are not going to sell EVs at huge losses just to buy compliance. The only alternative is to take our shipments of [combustion engine] vehicles to the UK down and sell these vehicles somewhere else.’

Carlos Tavares, chief executive of Stellantis, the maker of Vauxhall and Citroen cars, had a similar message last month. He said that a law to limit petrol car sales was ‘terrible for the UK’. He said that if ministers did not make urgent changes to the rules, Stellantis could be required to slash the number of cars it sells in Britain, and he refused to rule out halting sales of some models altogether. 

EV sales are struggling across Europe as well. Mercedes sales fell last year, while VW electric car sales fell by an astonishing 24.3 per cent in Q1, year-on-year.

To add to the problems for motor manufacturers, China has flooded the European market with their cheap EVs, which are piling up in ports such as Antwerp and Zeebrugge. According to Quartz:  ‘Chinese EV makers are using ports like car parks. Some Chinese brand EVs had been sitting in European ports for up to 18 months, while some ports had asked importers to provide proof of onward transport, according to industry executives. One car logistics expert said many of the unloaded vehicles were simply staying in the ports until they were sold to distributors or end users. “It’s chaos”, said another person who had been briefed on the situation.’

Chinese EV makers such as BYD hope to rake in millions from selling their surplus ZEV allowances to UK firms.

If that was not bad enough, second-hand values for EVs are plunging, as there is little interest from buyers. One reason, as David Craig pointed out in TCW yesterday, is that EVs are effectively worthless once they get near to the expiry of battery warranties, typically 100,000 miles or eight years. This, of course, has the effect of devaluing prices further up the chain.

Consequently buyers of new EVs face not only having to pay ten or fifteen grand more at purchase, they will get much less when they trade it in.

All in the name of Net Zero!

Lord Callanan misled Parliament

IT IS A serious offence for a Minister to mislead Parliament, but that is exactly what Lord Callanan, Parliamentary Under Secretary of State at the Department for Energy Security and Net Zero (DESNZ), did in the House of Lords last week.

Replying to a written question from Lord Frost which asked about the overall cost-competitiveness of electricity generated from recently commissioned offshore wind farms compared with electricity generated from recently commissioned gas-fired power stations, Callanan replied: ‘Offshore wind is one of the cheapest generating technologies in the UK and is comparable to or cheaper in cost than fossil-fuel based alternatives . . . However, I will give the noble Lord the costs in the latest published analysis. The levelised costs are £44 per megawatt hour for offshore wind, versus £114 per megawatt hour for closed-cycle gas turbines ‘

The analysis he referred to was published by DESNZ on November 16 last year. However on the very same day, the DESNZ also published its new Administrative Strike Prices for the next Contracts for Difference (CfD) round. CfDs offer guaranteed index-linked prices to renewable energy generators, and the new price on offer to offshore wind is £100.27/MWh, at 2023 prices. By contrast, the same published analysis calculated a cost of £54/MWh for gas generation.

Callanan’s claimed cost of £114/MWh includes a carbon tax of £60/MWh. But a tax imposed by the government is not a cost in the real sense of the word, and certainly should not be included in any comparison of costs between wind and gas power, which was the question Lord Frost had specifically asked.

The levelised costs also fail to include any of the wider system costs incurred to cater for intermittent renewable generators, such as standby generation, system balancing and grid upgrades. In short, offshore wind power is much more expensive than fossil fuel power.

It is inconceivable that Callanan was not aware of his own Department’s CfD prices, and therefore it is clear that he deliberately misled Parliament.

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Paul Homewood
Paul Homewood
Paul Homewood is a former accountant who blogs about climate change at Not a Lot of People Know That

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