Last month the Government announced an additional £56 million investment to increase electric vehicle (EV) chargepoints across the country. The funding will expand the current Local Electric Vehicle Infrastructure (LEVI) pilot, a scheme that provides funding to certain Local Authorities to deliver EV charging infrastructure for residents. The aim of the LEVI funding is to equip Local Authorities with the resources and in-house expertise to help them scale up their charging strategy in partnership with private operators.

The Department for Transport announced that, “the funding will help local authorities work in tandem with private business and chargepoint operators…to deliver the most ambitious chargepoint plans for their area”. With electric car sales reaching a record high in the UK last year, and set to continue rising if we are to meet the UK’s ambitious Net Zero targets, it’s clear that ambitious plans are necessary to meet future chargepoint demand.

Concerningly, a recent study by Liberty Charge has found that Local Authorities may not recognise quite how ambitious their chargepoint plans actually are. The study found that a disconnect exists between the speed with which Local Authorities believe they can install EV infrastructure – some expecting that this can be done in less than a year – and the reality, which is often closer to three. Experience of the initial LEVI pilot scheme has shown that it can take 12 months after an application for LEVI funding just for a decision to be made as to whether the application was successful. 

Privately funded projects – for example fully funded by chargepoint operators – are expected to be a quicker route to deployment, however we are aware that there are still a number of barriers to securing private sector financing in the EV sector. In particular the view remains that technology is not yet settled enough, and has not been around for long enough, to have a proven return to make it financeable on a purely private sector basis. Where private financing has been done, it has largely been by equity investment, rather than on a project finance basis.

Similar uncertainties remain in relation to private sector investment in EV fleets, such as buses, with questions remaining unanswered in relation to long-term battery life and opportunities to extract remaining value from batteries once they can no longer be used in vehicles. Industry is however beginning to recognise the exciting opportunities available to commercialise privately owned charging infrastructure – we recently advised First Bus on an exciting pilot project to offer third parties commercial use of its state-of-the-art EV charging hub in Caledonia.    

Initiatives like the LEVI fund are a helpful step in encouraging private financier participation in EV charging, but the Government may need to do more to increase investor confidence, for example by promoting technological progress and successes, or investing itself in some smaller projects.  

How net zero opportunities across energy and transport increasingly look like good investments, and more related topics, will be explored at the Interchange conference at The Vox, Birmingham on 18 and 19 April 2023 where Burges Salmon sponsors the Energy Hub.