Could the UK really lead the world in electric vehicles?

Vroom, vroom. Image: Getty.

Amidst a gloomy series of announcements pointing to car manufacturers pulling out of the UK, there are still some signs that the future could be bright for the UK’s automotive industry.

Jaguar Land Rover (JLR) has announced it will invest hundreds of millions of pounds in electric vehicle (EV) production at its Castle Bromwich plant in the Midlands, helping to secure 2,700 jobs. The previous government had been eager to show its support, handing a £500m loan guarantee to JLR, announcing it will make charging points mandatory in new homes and cutting company car tax for EVs from 2020. In his first address to Parliament as new prime minister, Boris Johnson emphasised his vision for the UK as “the home of electric vehicles”.

But how realistic is this grand ambition? The UK still only attracts a small fraction of the new global investment in electric car manufacturing. China, Germany and the US are getting the lion’s share, with car makers’ planned investments in these countries reaching a total of over $240bn. The domestic EV market lags behind other EU countries. And, while Johnson also claims that the UK is “leading the world in battery technology”, there are no plans for large scale domestic battery manufacturing facilities, with production capacity in Europe instead expected to reach 130 GWh by 2025.

Unless this changes, the global auto industry will continue to invest elsewhere and the UK will miss its chance to claim a major stake in this industry – not to mention the benefits of cleaner air and real progress in cutting carbon from the largest emitting sector in the UK.

Government action in the following three areas could change this picture, however.

First, manufacturers need more certainty about the future market before they will invest. While Brexit will inevitably play a role, upping the domestic demand by bringing forward the ban on the sale of new petrol and diesel vehicles to 2030, and providing incentives for corporate fleets and private individuals to go electric, including by expanding charging infrastructure, would go a long way to strengthening the home market.

In the uncertainty of the post-Brexit world, it could be a great trade proposition too. Demand for electric vehicles in the EU could reach 12 million vehicles by 2030, which means the UK could capitalise on the growing European market for its car exports and help address the UK’s automotive trade deficit at the same time.


Second, manufacturing electric vehicle batteries requires critical raw materials, like cobalt. The considerable environmental and human costs of mining these materials could lead to supply disruptions, potentially creating barriers to the industry’s growth.

Instead, a system for battery reuse and recycling would mean the UK could provide a ready source to meet half of its cobalt demand in 2035 from domestically used batteries. For this to happen, the government needs to put policies in place that encourage domestic battery manufacturing and reprocessing, including revising the producer responsibility system for EV batteries to improve design, reuse and recycling.

Third, firms investing in electric vehicles could make profits in associated services, and particularly those enabled by new digital technology. For example, electric vehicles could be an infrastructure asset to support the energy system: batteries from idle cars can be deployed for balancing on local energy networks, limiting the need for network reinforcement and enabling further integration of renewables in the power system. This would enable UK firms to access new revenue streams beyond car sales, strengthening their profitability, and maximise the benefits of the transition to electric vehicles for UK citizens.

It is estimated that smart charging and vehicle to grid technology (which allows cars to provide power from the battery back into the grid), could save the energy system in Great Britain up to £270m per year by 2030 in avoided distribution network upgrades and reduced peak energy demand. To realise these opportunities, Ofgem should ensure the ongoing network charging and energy retail market reviews enable better use of EV batteries as part of a smart energy system.

China, Norway and EU countries, such as the Netherlands, have already set high ambitions for zero emissions vehicles. If Boris Johnson is serious about making the UK the “home of electric vehicles”, “powered by British-made battery technology”, his new government needs to act quickly, before it misses the chance.

Caterina Brandmayr is senior policy analyst at the Green Alliance.

 
 
 
 

A new wave of remote workers could bring lasting change to pricey rental markets

There’s a wide world of speculation about the long-lasting changes to real estate caused by the coronavirus. (Valery Hache/AFP via Getty Images)

When the coronavirus spread around the world this spring, government-issued stay-at-home orders essentially forced a global social experiment on remote work.

Perhaps not surprisingly, people who are able to work from home generally like doing so. A recent survey from iOmetrics and Global Workplace Analytics on the work-from-home experience found that 68% of the 2,865 responses said they were “very successful working from home”, 76% want to continue working from home at least one day a week, and 16% don’t want to return to the office at all.

It’s not just employees who’ve gained this appreciation for remote work – several companies are acknowledging benefits from it as well. On 11 June, the workplace chat company Slack joined the growing number of companies that will allow employees to work from home even after the pandemic. “Most employees will have the option to work remotely on a permanent basis if they choose,” Slack said in a public statement, “and we will begin to increasingly hire employees who are permanently remote.”

This type of declaration has been echoing through workspaces since Twitter made its announcement on 12 May, particularly in the tech sector. Since then, companies including Coinbase, Square, Shopify, and Upwork have taken the same steps.


Remote work is much more accessible to white and higher-wage workers in tech, finance, and business services sectors, according to the Economic Policy Institute, and the concentration of these jobs in some major cities has contributed to ballooning housing costs in those markets. Much of the workforce that can work remotely is also more able to afford moving than those on lower incomes working in the hospitality or retail sectors. If they choose not to report back to HQ in San Francisco or New York City, for example, that could potentially have an effect on the white-hot rental and real estate markets in those and other cities.

Data from Zumper, an online apartment rental platform, suggests that some of the priciest rental markets in the US have already started to soften. In June, rent prices for San Francisco’s one- and two-bedroom apartments dropped more than 9% compared to one year before, according to the company’s monthly rent report. The figures were similar in nearby Silicon Valley hotspots of San Jose, Mountain View, Palo Alto.

Six of the 10 highest-rent cities in the US posted year-over-year declines, including New York City, Los Angeles, and Seattle. At the same time, rents increased in some cheaper cities that aren’t far from expensive ones: “In our top markets, while Boston and San Francisco rents were on the decline, Providence and Sacramento prices were both up around 5% last month,” Zumper reports.

In San Francisco, some property owners have begun offering a month or more of free rent to attract new tenants, KQED reports, and an April survey from the San Francisco Apartment Association showed 16% of rental housing providers had residents break a lease or unexpectedly give a 30-day notice to vacate.

It’s still too early to say how much of this movement can be attributed to remote work, layoffs or pay cuts, but some who see this time as an opportunity to move are taking it.

Jay Streets, who owns a two-unit house in San Francisco, says he recently had tenants give notice and move to Kentucky this spring.

“He worked for Google, she worked for another tech company,” Streets says. “When Covid happened, they were on vacation in Palm Springs and they didn’t come back.”

The couple kept the lease on their $4,500 two-bedroom apartment until Google announced its employees would be working from home for the rest of the year, at which point they officially moved out. “They couldn’t justify paying rent on an apartment they didn’t need,” Streets says.

When he re-listed the apartment in May for the same price, the requests poured in. “Overwhelmingly, everyone that came to look at it were all in the situation where they were now working from home,” he says. “They were all in one-bedrooms and they all wanted an extra bedroom because they were all working from home.”

In early June, Yessika Patapoff and her husband moved from San Francisco’s Lower Haight neighbourhood to Tiburon, a charming town north of the city. Patapoff is an attorney who’s been unemployed since before Covid-19 hit, and her husband is working from home. She says her husband’s employer has been flexible about working from home, but it is not currently a permanent situation. While they’re paying a similar price for housing, they now have more space, and no plans to move back.

“My husband and I were already growing tired of the city before Covid,” Patapoff says.

Similar stories emerged in the UK, where real estate markets almost completely stopped for 50 days during lockdown, causing a rush of demand when it reopened. “Enquiry activity has been extraordinary,” Damian Gray, head of Knight Frank’s Oxford office told World Property Journal. “I've never been contacted by so many people that want to live outside London."

Several estate agencies in London have reported a rush for properties since the market opened back up, particularly for more spacious properties with outdoor space. However, Mansion Global noted this is likely due to pent up demand from 50 days of almost complete real estate shutdown, so it’s hard to tell whether that trend will continue.

There’s a wide world of speculation about the long-lasting changes to real estate caused by the coronavirus, but many industry experts say there will indeed be change.

In May, The New York Times reported that three of New York City’s largest commercial tenants — Barclays, JP Morgan Chase and Morgan Stanley — have hinted that many of their employees likely won’t be returning to the office at the level they were pre-Covid.

Until workers are able to safely return to offices, it’s impossible to tell exactly how much office space will stay vacant post-pandemic. On one hand, businesses could require more space to account for physical distancing; on the other hand, they could embrace remote working permanently, or find some middle ground that brings fewer people into the office on a daily basis.

“It’s tough to say anything to the office market because most people are not back working in their office yet,” says Robert Knakal, chairman of JLL Capital Markets. “There will be changes in the office market and there will likely be changes in the residential market as well in terms of how buildings are maintained, constructed, [and] designed.”

Those who do return to the office may find a reversal of recent design trends that favoured open, airy layouts with desks clustered tightly together. “The space per employee likely to go up would counterbalance the folks who are no longer coming into the office,” Knakal says.

There has been some discussion of using newly vacant office space for residential needs, and while that’s appealing to housing advocates in cities that sorely need more housing, Bill Rudin, CEO of Rudin Management Company, recently told Spectrum News that the conversion process may be too difficult to be practical.

"I don’t know the amount of buildings out there that could be adapted," he said. "It’s very complicated and expensive.

While there’s been tumult in San Francisco’s rental scene, housing developers appear to still be moving forward with their plans, says Dan Sider, director of executive programs at the SF Planning Department.

“Despite the doom and gloom that we all read about daily, our office continues to see interest from the development community – particularly larger, more established developers – in both moving ahead with existing applications and in submitting new applications for large projects,” he says.

How demand for those projects might change and what it might do to improve affordable housing is still unknown, though “demand will recover,” Sider predicts.

Johanna Flashman is a freelance writer based in Oakland, California.