CN14 - CMA makes wide-ranging recommendations to UK Government
16 September 2021
The Competition and Markets Authority ("CMA") has made wide-ranging recommendations to the UK Government in order to increase investment, competition and confidence in the electric vehicle charging market. These recommendations are intended to facilitate the UK's objective of reaching net zero by 2050.
Key takeaways
- Given the number of uncertainties in the development of electric vehicle charging, the CMA considers it is important for the sector to be monitored closely going forward and further competition work may be necessary.
- The CMA has opted to make recommendations to the UK Government, rather than open a market investigation and seek to impose remedies in the market under its statutory powers.
- The opening of a CA98 Chapter 1 investigation demonstrates that when undertaking a market study the CMA will keep a keen eye for anti-competitive behaviour and open an investigation where necessary.
Background
The UK Government plans to prohibit the sale of new petrol and diesel cars from 2030. This measure is intended to support the aspiration of achieving net zero carbon emissions by 2050.
In order to incentivise the take-up of electric vehicles before 2050, the CMA considers it vital that there is comprehensive and competitive network of charging points.
On 2 December 2020, the CMA launched a market study in relation to the supply of charging points for electric vehicles, to consider the extent to which a matter in relation to the supply of those services in the United Kingdom has or may have effects adverse to the interests of consumers, and to assess the extent to which steps can and should be taken to remedy, mitigate or prevent any such adverse effects.
In July 2021, the CMA published its market study report on competition in the electric vehicle charging sector. The CMA has made a number of recommendations to the UK Government to ensure better outcomes for consumers and to reduce barriers to investment.
The CMA has also opened an investigation into suspected anti-competitive behaviour in relation to long term exclusive supply agreements it uncovered during its market study.
Recommendations to the UK Government
The CMA found that access to electric vehicle charging points is a "postcode lottery". Rural areas can be characterised by having a very weak investment case and may be left underserved. The investment case is also impacted by other relevant factors, including the electric network in the local area and the level of support made available by local authorities. In order to speed up the roll-out of charging infrastructure, the CMA has recommended the UK Government take a number of steps to unlock investment and fill gaps in underserved areas.
To increase electric vehicle take up, the CMA consider it vital to ensure "EV charging is as simple as filling up with petrol or diesel". The CMA has therefore recommended that an independent body is tasked with ensuring that:
- It is easy to find working charge points (e.g. access to data on live availability).
- It is simple and quick to pay (e.g. no onerous registration formalities, contactless payment accepted).
- The cost of charging is clear and comparable.
- Chargepoints are accessible and interoperable.
Suspected anti-competitive behaviour identified
As noted above, the CMA found that there is extremely limited competition for motorway charge points. One reason identified for this is the use of long-term exclusive contracts entered into by the largest charge point operator. The contracts provided for exclusivity periods of between 10 and 15 years (much longer than the five year period of exclusivity that is typically considered to be unproblematic under competition law). As a result of this, the CMA has opened an investigation under the Competition Act 1998 in order to assess the lawfulness of the existing exclusivity arrangements.
The UK currently lags behind many of its European neighbours in terms of the extent of its roll-out of electric vehicle charging infrastructure. Therefore, there is a great deal to be done if the UK is to achieve its 2050 zero carbon emissions target. The CMA has set out a clear vision of how the UK Government can incentivise investment and increase confidence in electric vehicle charging – two factors that will be crucial in reaching net zero.
With thanks to Oliver Noble of Ashurst for his contribution.
