EVs: Could They Help Rescue Our Ailing Retail Sector?

by Ian Johnston, CEO of Engenie

The National Grid has estimated that by 2030, there will be 9 million electric vehicles on UK roads. In 2017 alone, sales of alternatively fuelled vehicles soared by 34.8%, according to the Society of Motor Manufacturers & Traders; a figure which is expected to rise exponentially as petrol and diesel-powered cars are gradually phased out of production.

Consumers and businesses alike are increasingly realising the benefits of using electric vehicles, from both an environmental and monetary perspective. This has generated a clear need for improved charging infrastructure – research from Edie insights has suggested that 25,000 additional charge points will be required on UK streets by 2030.

Far kinder to our wallets, a recent study from conservation charity WWF has found that owners of electric cars could pay just £170 a year to charge them at home – dropping to £100 if consumers adopt ‘smart charging’, at times of low demand on the grid. Although the charging costs are higher away from home, this still compares favourably to an average annual petrol bill of £800.

There is also a positive effect on the local environment – a reduction in air pollution and noise, coupled with cheaper running costs and rapid advantages in technology, is making electric vehicles an attractive alternative to petrol and diesel vehicles. In addition, customers benefit from a government grant of up to £4,500 towards the cost of a new vehicle, making it easier than ever to make the switch to electric.

And perhaps more so than ever, customers are conscious of their carbon footprint and the impact of their choices on the environment. Though not totally carbon-free, electric vehicles still produce just a fraction of the CO2 generated by petrol and diesel cars, and compensate for the emissions generated during the manufacturing process within just six months on the road.

There are also broader business concerns to be considered. Although most businesses who operate fleets are aware of the need to transition to cleaner vehicles, there are significant up-front costs in order to do so. If the required infrastructure is not in place, or if this creates major inefficiencies for their business operations, there is a significant barrier to make that switch.

But what about the wider benefits of electric vehicles?

Increasingly the UK retail sector, particularly the high street, is finding itself in turbulent waters. Factors such as Brexit, business rates and customers flocking to the web and e-commerce primed apps such as Instagram are taking their toll, leading to a dip in retail sales almost every month.

Indeed, the British Retail Consortium recently reported that shoppers are deserting the UK high street in greater numbers than directly after the 2008 financial crisis. Even shopping malls and out-of-town retail centres, usually resilient against these trends, are starting to feel the squeeze.

An important culprit in this shift is the internet. With internet usage surging 976% globally between 2000 and 2017, this has created unlimited opportunities for even the smallest of online retailers to access shoppers worldwide. Internet spending accounts for almost a fifth of all retail spending – but this comes at the expense of the high street, which has witnessed many of the UK’s most well-known stores, such as Toys-R-Us and House of Fraser, face drastic store closures or complete collapse into administration in recent months.

But one, key contributing factor to this reduced footfall is often overlooked – the expense of travelling and parking. Why would shoppers choose to pay for fuel, and then again pay to park, when they can buy the same goods from the comfort of their own home, for free?

Although in reality, the issue of managing traffic and urban centres is not that simple. Private car park operators are ultimately driven by the need to make a profit. And for local authorities, it is even more complex. Revenue from car parking can be used to invest in local services, such as public transport, contribute to economic regeneration or even support local businesses.

Despite this, local authorities often face a backlash for charging what local shoppers see as unreasonable prices for parking. Most recently, Reading Borough Council was branded ‘idiotic’ for raising weekend parking prices, with shoppers commenting it was a ‘death knell’ for the town’s high street. The council’s logic was that consumers would instead be incentivised to use local park and ride schemes, reducing congestion and promoting a more efficient method of travel. And yet residents have threatened to shop elsewhere in order to take advantage of more reasonably-priced car parks.

Local authorities are therefore faced with a precarious balancing act, ensuring that shoppers and tourists are able to visit town centres with ease, whilst also minimising congestion, encouraging the use of public transport, and bringing in enough money to ensure that other public provisions do not suffer.

So what is the solution? How can local authorities successfully support their local high street and town centre, without placing a repellent financial burden on shoppers?

Herein lies the role of the electric vehicle. Local authorities can benefit from the free installation of electric charging points, essentially offering subsidised parking for those drivers of EVs. In addition, it is possible to earn an income from such charge points, as landowners benefit from a leasehold rent. The effect of this is twofold: councils will be able to generate revenue to support their strategic investments into public services and help to cover the shortfall in car park fees by providing free EV charger parking.

Local authorities and landlords will also create a reason for many EV drivers to visit town centres or retail parks, specifically to charge their vehicle at their own convenience. In addition, EV charge points have already demonstrated their ability to increase customer footfall and dwell time.

EV charging is now incredibly simple with most charging networks for consumers and businesses alike, who only pay for what they use when they charge up, with payment made through the charge point’s in-built terminal.

The implementation of charge points also creates ongoing added-value for each site, securing the grid and a place on all EV charger maps nationwide, thus increasing a town or business’s online visibility.

Challenges to introducing and sustaining this way of operating do remain, and most of them are focused around infrastructure. It is estimated that 83,500 new electric charging points will be needed to support the growth of the EV market by 2020. This compares to the 16,500 in the UK currently. Action by authorities, but also by private landlords, must therefore be robust, making changes on a scale that shows buying an electric vehicle to be truly viable for the consumer.

But there is a huge opportunity here for retailers to make the most of private subsidies around infrastructure and broader public support. The Government has so far set aside £440 million to spend on improving charging infrastructure, as well as tasking 21 local authorities with investing in Clean Air Zones. Now is the time for retailers and local authorities to work together to protect local high streets whilst also contributing the UK’s broader environmental goals.

Encouraging the use of electric vehicles serves to benefit the local high street. Shoppers will be provided with an incentive to visit physical retail stores due to free parking and reduced charging costs, but will also benefit from the reduced pollution – both atmospheric and noise – from the presence of electric vehicles.

The EV sector also continues to evolve at pace. Engenie’s proposed national network of rapid EV charging points can charge a car in less than 30 minutes, which will fall to 10 minutes with the introduction of ultra-rapid chargers. Current rapid chargers are up to 16 times faster than standard points, helping to make EVs significantly more practical for UK drivers.

This is particularly pertinent for some retailers, who are required to allocate 10% of parking spaces in new developments for slow chargers due to new planning policies. These can often take around eight hours to deliver a meaningful charge that can be achieved in 30 minutes with a rapid charger. The reality is that slow chargers installed at retail spaces don’t get used due to the mismatch of dwell time and equipment capability.

This is a real headache for retailers who have to give up valuable parking bays that remain empty. A rapid charger can replace around 10 slow chargers, saving space, costing nothing and encouraging higher carpark turnover. There are no capital expenditure or operating costs – these are covered in full by Engenie.

Currently, there are also constraints to the grid network, and at present, not every store on a street will be able to install a 50kW rapid charger offering a 30 minute charge. Local authorities and the National Grid will need to work closely together in the coming years to address this problem. And in the meantime, property owners will want to move fast to secure the high power connection that allows them to offer their customers rapid charging.

Engenie also shares revenue from EV chargers with landlords and local authorities, so they gain a regular and growing income, with detailed reporting and information.

Companies such as Engenie are now uniquely positioned to support the revival of the UK retail sector. Through the installation of super-fast charging networks, local authorities can fully future-proof their retail offering whilst providing a cleaner, greener and quieter environment for their shoppers.