Mike Hawes: ‘Demand for green vehicles set to continue into 2022’

As the British automotive industry moves ahead with its initiatives to decarbonise road transport, the Chief Executive of the UK’s Society of Motor Manufacturers and Traders (SMMT) says more EVs were registered in 2021 than the combined registrations in the last decade.

How well prepared is the UK automotive industry to tackle the transition to electrification? 
With a quarter of all vehicles manufactured in the UK and a quarter of all new cars registered so far this year electrified, the British automotive industry is moving at pace to decarbonise road transport. Indeed, SMMT analysis expects more plug-in vehicles will be registered in 2021 (287,000) compared to 271,962 vehicles between 2010 to 2019 combined. This highlights how massive investment by the industry has led to a plethora of models that are attracting consumer interest. Many of these are being built in the UK but the sector, like others worldwide, faces an immense challenge to move both production and supply chain from excellence in ICEs to excellence in batteries and electric vehicles.
 Whilst sales are surging, infrastructure continues to lag, with an average of just one standard on-street public charging point. For an electric revolution to take place, consumers who do not have access to a driveway or designated parking spot need to be reassured that recharging through a public charging network is as easy, efficient and convenient as refuelling.
 
From the auto component manufacturer perspective, what are the key challenges and opportunities in terms of electrification? 
There is no denying that the rapid shift to electrification will challenge the supply chain. Any technological shift involves structural change, with some products declining but other sectors emerging and creating jobs. We see electrification creating significant opportunities for UK manufacturers but the transition must be managed carefully. Vehicle manufacturers are investing billions in an ever-increasing model range to give consumers and businesses choice. The supply chain too is transforming, from internal combustion engines to batteries, power control technologies and other components.
Of course, we need the market for these new technologies to grow and for that we need the support of other stakeholders. We need to see consistent and long-term fiscal incentives, significant investment in infrastructure — including public charging points in residential areas and a strategy to develop new technologies to replace diesel in the commercial and heavy goods sector.
 
In 2020, EVs accounted for more than one in 10 registrations, with 90 percent increase in PHEVs. What's the outlook going forward?
The latest SMMT outlook forecasts more new EVs are being registered in 2021 than the entire last decade combined. This is testament to the massive investment from the automotive industry, including an ever-expanding range of electrified models as well as long standing government incentives and growing public acceptance. The demand for the latest and greenest vehicles is set to continue into 2022 with battery EVs expected to outsell conventional diesel and mild-hybrid diesel cars over the course of the year.

Could you elaborate on the supply chain bottlenecks, in terms of cutting down emissions and reducing carbon footprint, in the UK? 
In 2020, the average age of a car on UK roads increased to 8.4 years old, the oldest on record, with almost 10 million vehicles from 2008 and earlier still in service. Reducing emissions and carbon footprints hinges on fleet renewal with older vehicles ultimately replaced with the latest lower and zero-emission cars. However, the current bottlenecks could threaten that transition. 
The global semiconductor shortage continues to create an unpredictable and disruptive environment for the automotive sector with vehicle production and supply chains negatively impacted. There are no quick fixes, with shortages expected well into next year, and all manufacturers are working hard to mitigate the effects and fulfil orders of the newest and greenest vehicles. 
 
Between all-electric and all-hydrogen, what do you think is the most feasible alternative fuel for the UK auto industry? 
While electric may lend itself more readily for cars and vans, there is still massive potential in hydrogen, especially for larger vehicles, which will ensure drivers have a broad choice of zero emission vehicles.
 However, there is no single technological solution for every service HGVs perform, which means the final technology mix will be far broader. Both hydrogen and electric will play a major role in this sector but, as with the transition for passenger cars, the key enabler will be infrastructure and a dedicated HGV infrastructure.
 
What is the progress on End-of-Life Vehicles (ELVs) in the UK, especially on ways to dispose off old batteries? 
Since 2015, the industry has hit the 95 percent recycling target meaning vehicles have one of the highest recycling rates of any product. Despite only being a small number of batteries reaching the end of their life currently, the UK already has clear regulations in place that require manufacturers to provide disposal services. However, as the demand for BEVs continues to rise, the need for UK-based battery recycling facilities will also increase and these will be crucial to minimise the carbon footprint of these vehicles and support the UK’s international competitiveness by using recycled materials to make new batteries.
In recent years, the battery technologies landscape has undergone significant change, particularly for EV batteries and is expected to evolve. The draft regulation builds on the current extended producer responsibility for end-of-life batteries and adds requirements outside the scope of current regulation. These include new requirements related to calculating battery carbon footprint, certain maximum lifecycle thresholds as well as recycled content and recovery provisions for cobalt, lead, lithium or nickel. 

In this context, could you also touch upon the various facets of remanufacturing and the circular economy? Currently, some UK batteries are sent for second life in energy storage and remanufacturing with companies starting to process high voltage batteries. Establishing battery recycling facilities in the UK will be crucial and would support circular economy principles and UK's competitiveness as an EV manufacturing location. Their development would also result in reduced end of life costs and reduce the carbon footprint.
 
What are the measures being taken to cut energy consumption , emission during manufacturing? 
The UK has some of the highest energy costs in Europe and automotive manufacturers based here have significant incentive to reduce their energy consumption.  Through hard work and substantial investment in renewable energy such as solar PV and wind turbines, the sector continues to deliver reduction in energy use. In 2020, energy usage decreased by an average of -14.2% and -36.8% less water was used than in 1999 — a monumental achievement.
 However, fully decarbonising production lines will take a step change in technology, requiring innovations which are yet to be developed to a fully commercial stage and are likely to be very expensive. Therefore, government support and easier access to financial measures, is needed to encourage trial projects and investment in the infrastructure necessary to enable fuel switching. 

This interview was first published in Autocar Professional's December 15, 2021 issue.