Whether wise or not, the Government has been forced to come up with tougher measures to target diesel drivers after losing a case against environmental campaigners ClientEarth over breaches of EU emissions standards. It will follow France which has also committed to an all-electric car policy.
The Scottish Government claimed it was already ahead of the game and could bring in the ban 10 years earlier. In 2013, it announced a key ambition that “by 2040 almost all new car sales will be near zero emission at the tailpipe and that by 2030 half of all fossil-fuelled vehicles will be phased-out of urban environments across Scotland.”
However, the implications of the switch have steadily begun to sink in. Should the transition come to pass it will certainly transform more than the car building industry.
Demand for precious metals, such as cobalt and lithium, will increase while the oil industry has been remarkably acquiescent. A major user of its output will be removed, but it has been making plans for this expected move for some time. When Ben Van Beurden, the chief executive of Shell, says his next car will be the electric Mercedes-Benz S500e then it indicates how the oil majors are thinking. Chief Financial Officer Jessica Uhl already drives a BMW i3 electric car.
Shell will unveil early plans for a deeper presence in renewable energy and the electrical chain to tap into demand for electric vehicles.
Just 4% of current new car sales are for electric vehicles and Which? magazine said they are currently too expensive for most consumers. A survey by insurer Aviva showed only 2% of drivers planned to buy an electric car as their next vehicle.
However, the pace is quickening. The number of new registrations of plug-in cars has grown from 3,500 in 2013 to more than 100,000 at the end of May. Morgan Stanley analysts expect global car sales to rise by 50% by 2050 to more than 130 million units a year, and estimates that electric vehicles will account for at least 47% of that sum.
All of Volvo’s cars will be electric or hybrid vehicles by 2019. BMW is to build an electric mini at its Oxford plant. Volkswagen, which is eager to distance itself from the diesel emissions scandal, plans at least 10 electrified models by the end of next year and is aiming at 30 battery-powered models by 2025. It wants to sell 1m electric cars sales by 2025.
Treasury officials, mindful of the enormous tax revenues from the oil industry, are calculating where the replacement income will come from.
The extra electricity needed to support the expected rise in electric vehicles will be the equivalent of almost 10 times the total power output of the new Hinckley Point nuclear power station.
It would likely require Britain to become a net electricity importer unless there is investment in new generation.