Electric vehicles (EVs) have received significant policy attention recently, particularly around establishing charging infrastructure to support their continued development. On 10 January the government published its Automotive Sector Deal, which confirmed support for EVs through £400mn of investment in charging infrastructure. Whilst BEIS reported that just five councils have made use of funding to develop charging infrastructure, many suppliers are proving less reluctant.
As the draft bill for a price cap on all SVTs progresses, suppliers are now more than ever looking for new ways to differentiate themselves as a means to attract and retain customers. Furthermore, with profit margins being squeezed, looking to other markets as a way to grow revenue per customer is a business model that many suppliers have turned to. The EV market is proving particularly enticing with a number of suppliers seeking early-mover advantage.
Shell’s acquisition of First Utility closely followed its purchase of EV charging company New Motion in October, as well as its partnership with charging infrastructure operator IONITY. The company is well placed to use these deals to further develop its public and domestic charging services, having announced the trial of rapid chargers at select forecourts in October.
As with Shell, both Vattenfall and ENGIE preceded their GB domestic market entry with recently developed EV capabilities – through the launch of the inCharge network and purchase of EV-Box respectively. E.ON UK joined these ranks with its plan to establish 10,000 UK charge points by 2020. With Ovo Energy and Ecotricity already offering established domestic and public charging propositions and Iberdrola reportedly looking to join, the EV-enabled supplier space is beginning to look increasingly busy (see Figure 1).
The domestic charging of EVs represents a complimentary service to traditional energy supply, with a perceived specialism in this emerging market also a strong branding strategy. Meanwhile, establishment and operation of public charging networks offers an opportunity for suppliers to gain a foothold in an adjacent space, where their scale and existing infrastructure offers a competitive advantage.
With 70,000 new plug-in car registrations predicted for the UK in 2018, and EVs estimated to reach cost and performance parity with traditional combustion engine vehicles, this growing attention is unlikely to dissipate. With a growing number of suppliers looking to develop broader energy services proposition, the EV sector appears an increasingly attractive market for technology-focussed suppliers to diverge into.
Figure 1: Timeline of selected supplier purchases and partnerships around electric vehicles
Cornwall Insight’s Domestic Supplier Insight Service tracks supplier activity in the market, providing detailed quarterly profiles. The next quarterly issue, covering Q4 2017, will feature expanded coverage of suppliers’ involvement in adjacent markets, including electric vehicles. For more information, contact Jacob Briggs at enquiries@cornwall-insight.com.