In December 2020, the Competition and Markets Authority (CMA) announced the launch of a ‘market study’ into the UK electric vehicle (EV) charging market, setting out to “help to make sure the [EV Charging] sector works well for consumers and prevent any competition problems before they become embedded.”
In the intervening period, the CMA has carried out an extensive stakeholder engagement exercise, sending detailed questionnaires to market participants and holding meetings with respondents to get their views.
The CMA has now completed its study and, last week, published a series of recommendations to UK government to deal with what the CMA considers to be the key bottleneck to the development of the EV sector: availability, access to, and spread of EV chargepoints. The CMA notes that projected demand means there will need to be more than 10 times as many publically accessible chargepoints as currently exist (25,000) in the UK by 2030.
Equally noteworthy is the CMA’s decision, alongside the publication of the final market study report, to open a formal competition law investigation into the provisioning of chargepoints at motorway service stations.
What were the CMA’s core conclusions?
The CMA made a number of key findings which underpin its recommendations to government and action taken under its competition law powers:
Recommendations to government
The CMA has a wide range of powers available to it at the end of a market study. In this case, it considers that the scale of the challenge requires central government intervention. As such, it has decided to publish a set of recommendations for government designed to unlock greater investment, promote competition and boost trust in the sector. These include:
The CMA also expresses its determination to keep the EV sector under close review and, where necessary, to take further action if it is developing in a way that is damaging competition and investment and not working well for people.
Competition Act investigation into motorway EV charging agreements
The CMA’s report recognises that the ability to charge easily and effectively on longer journeys is crucial to persuading drivers to make greater use of electric vehicles. During its investigation, the CMA noted that most motorway services have a single EV charging provider – Electric Highway – and concerns have been widely expressed as to the impact this may be having on customer satisfaction.
A significant reason for the current sole provider situation is long-term (10-15 year) exclusivity agreements between Electric Highway and the three main motorway services operators (Moto, Roadchef and Extra) who between them control two-thirds of all sites.
Long-term exclusivity agreements are often a feature in “new” markets where providers typically seek out such exclusivity in order to justify the investments they need to make to accelerate market growth. From a competition law perspective, the authorities will balance such commercial objectives against the scope of the exclusivity and the extent to which it operates to deter or prevent new market entrants.
Given its concerns as to the extent and quality of EV charging coverage across the UK’s motorways, is no surprise that the CMA has decided it needs to interrogate further the impact of the aforementioned agreements between Electric Highway and the service operators. As such, it has decided a formal competition law investigation is required. At the end of that investigation, the CMA could potentially force the parties to unwind their agreements or take any other measures it feels are necessary to promote effective competition.
The EV charging market remains of critical importance given the UK’s ever increasing focus on net zero greenhouse gas emissions, and the importance of a national EV charging infrastructure to reducing the significant contribution made to greenhouse gas emissions in the UK by the transport sector.
Through its market study report, the CMA has laid down the gauntlet to UK government to take active steps to ensure the UK’s EV charging network develops in an effective way. Equally importantly, by opening its formal investigation into the National Electric/service operator agreements, the CMA has signalled that it will take direct enforcement action itself where it has evidence that competition law may be being broken in the EV charging sector.
Alex Haffner, Partner - Competition & Regulation
Graham Spitz, Partner Corporate - Growth Capital
Alex and Graham are members of the Fladgate Green Energy Group and regularly advise companies and funds in connection with EV infrastructure
The introduction within the EU of the General Data Protection Regulation (GDPR) led to frantic scr...Read more
Pluczenik Diamond Company NV v W Nagel (a firm) Case number  EWCA Civ 2640 A commercial agen...Read more
Fladgate advised Cassidy Gold Corporation on its sale of the Kouroussa Gold Project to Hummingbird R...Read more
Investment in grid scale battery storage projects in the United Kingdom experienced a surge in inves...Read more
Tailored insights delivered to your inbox