01 November 2022
In just seven years’ time, new petrol and diesel vehicles are due to disappear from UK car showrooms1. And within the next twenty years, all new road vehicles, including buses and heavy good vehicles, will have to be zero emission2. These plans are set to make the UK one of the most rapid and ambitious adopters of electric vehicles (EVs) amongst the G7 group of countries.
As a result, the UK’s vehicle fuelling infrastructure is being transformed. Official estimates suggest that by 2030 around a quarter of cars and vans, or some 10 million vehicles, will be electric2 compared with around 800,000 at the end of 2021. These vehicles will require at least 300,000 public charging points, a huge increase on the fewer than 25,000 points which existed at the end of last year2. Meeting demand will also require considerable investment in private charging infrastructure, for example to service commercial vehicle fleets.
At Macquarie, we see a considerable opportunity to deploy capital in support of the rollout of EV charging across the UK, as part of our broader programme of investment in the UK’s infrastructure. There is an enormous investment need – and opportunity. Some estimates peg the capital required at up to £18 billion by 20303. That figure – which covers charge point devices, site preparation and installation – does not include the costs of land, or investment in the grid, by operators of the distribution network.
A number of elements are needed to ensure that the UK’s future demand for EV charging can be met. A considerable proportion of EV charging will be undertaken privately, with home charging points installed by individuals, often as part of an EV purchase package.
In addition, there is an urgent need to provide rapid charging infrastructure along the motorway network to enable longer journeys. While the range of an average EV has trebled4 over the last decade, at 260 miles it is still considerably below that of a typical internal combustion engine. If EV penetration is to take place at the speed needed to bring down vehicle greenhouse emissions in line with the UK’s net-zero target, consumers will need to be confident that it remains as convenient to recharge electric cars on long journeys as it is to fill up with petrol or diesel. At Macquarie, we are investing in projects to roll out critical infrastructure to support this evolution.
Crucially, fast and ultra-fast chargers – which are able to charge EVs in minutes versus hours – accounted for less than 20 per cent of public chargers installed in the UK at the end of 2021, highlighting the need to accelerate investment in this critical enabler of the transition to EVs.
Global public charging infrastructure (total number of connectors)
There will also be strong demand from commercial fleet operators for charging capacity. The commercial sector looks set to be an early adopter of EVs, given the relatively attractive economics. Commercial vehicles tend to have higher utilisation rates than private vehicles, meaning the lower running costs offered by EVs translate into a more rapid return on investment. Fleet operators can also benefit from economies of scale when it comes to building charging infrastructure at fleet hubs.
We have recently announced plans to support the transition to EVs.
Earlier this year, Macquarie Asset Management acquired Roadchef, one of the UK’s largest operators of motorway service areas, with 30 sites across the motorway network serving 52 million customers a year5. Alongside broader investment in its sites and facilities, we are supporting Roadchef in accelerating its rollout of fast-charging infrastructure.
Gordon Parsons, a Senior Managing Director at Macquarie Asset Management, said: “As a key part of the UK’s motorway infrastructure, we believe Roadchef has a major role to play in facilitating the transition to net-zero. Its extensive network of locations across the country make it well positioned to support the fast-charging infrastructure that is key to the adoption of electric and low-carbon vehicles.”
Roadchef plans to build charging hubs that offer 350kW ultra-rapid chargers. These can provide up to 100 miles of range to an electric vehicle in less than 10 minutes.
Macquarie Asset Management’s Green Investment Group (GIG), meanwhile, has launched two initiatives to provide charging infrastructure to commercial clients without any upfront costs.
Fleete, one of the newly launched initiatives is a dedicated business aimed at the commercial vehicle market. Fleete finances, installs and manages charging infrastructure, with no up-front costs through an innovative ‘charging-as-a-service' model. It works with clients to deploy charging in large depots, where vehicles are parked overnight, offers innovative hybrid hubs in trading estates or carparks that can be used by a number of smaller clients, and provides intercity chargers close to motorways to support truck and coach fleets.
Its subscription-based service installs high-powered DC charging equipment and utilises software that manages charging schedules and optimises energy consumption. With equipment that delivers between 60kW and 600kW, depending on individual fleet requirements, Fleete can provide efficient overnight charging and rapid top-ups.
“The mass transition to electric vehicles is now inevitable, the only question is how quickly it will happen,” says Mark Dooley, the Green Investment Group’s Global Head. “We are here to make that transition happen as fast as possible and we see commercial fleets as an opportunity for significant near-term decarbonisation impact.”
The UK has set itself an ambition to be a global leader in the adoption of EVs. Meeting its targets will require continued focus from policymakers in terms of supportive regulation, targeted incentives, and a willingness to work with the private sector to ensure the infrastructure is in place to meet consumer and business demand for charging. For our part, through the investments set out above and others to follow, we plan to play a key role in financing and developing the infrastructure needed to realise the UK’s ambitions to be a global leader in the race to electrify our transport system.
From renewable energy to new technologies we are investing in the UK’s energy infrastructure, and helping our clients on their decarbonisation journeys.