Origin rules: UK’s Electric Vehicle (EV) industry hangs in the balance
The prospects for the UK automotive industry have been looking fairly bleak in the face of a “no deal” Brexit for some time. EV manufacturers in the UK and Europe now face fresh woes even if a trade deal can be concluded before 1 January, after the European Commission signalled that it is set to reject UK proposals that EVs should benefit from relaxed “rules of origin” requirements.
Under current draft EU proposals, EVs may only be imported free from tariffs if no more than 45% of the value of the parts that make up an EV can come from countries outside the UK and the EU. Given an EV battery alone can make up to 50% of the value of whole vehicle, and China, Japan, and South Korea’s dominance of the global EV battery manufacturing market, such a threshold makes a WTO level tariff of 10% almost certain to apply on EV exports from the end of the implementation period.
European car manufacturers are coming to the aid of the UK’s cause, however, urging the Commission’s chief negotiator, Michel Barnier, to soften the EU’s stance for the good of the European car industry, which is itself heavily reliant on exports to the UK. Nonetheless, the European car makers’ lobby’s proposal of a 50% threshold still falls way short of the 70% that the UK is seeking. As EVs and other connected vehicles become increasingly reliant on imported components, on top of the all-important battery, the outlook for frictionless trade does not look promising – with or without a deal.
Why e-bike after-sales may no longer be an after-thought
The meteoric rise of e-bikes during the Covid-19 pandemic has been well documented. At Halfords, one in three bikes sold is now electric, and e-bike sales in the Netherlands now outstrip traditional models. While the acceleration of the e-bike trend has been widely celebrated for its low carbon credentials and its ability to ease congestion on roads and public transport, the rapid influx of the technology has left riders with another problem: getting their bikes serviced.
Naturally, the more sophisticated a bike becomes the greater the potential for things to go wrong. It is therefore no surprise that, as a growing number of riders become the proud owners of relatively complex and pricey hardware, that retailers and manufacturers are struggling to keep up with demand for repairs, and local bike shops are scrambling to up-skill to provide for their new breed of customer. Indeed, Vanmoof’s recent $40m Series B funding round was partly driven by the need to address the company’s reported shortfall in customer service, while in the US, Bosch is now offering virtual e-bike maintenance courses to bike dealers in an effort to stem the flow of returns.
With micromobility manufacturers also looking increasingly to open own-branded stores, and build relationships with customers beyond the point of sale, these could be the signs of the micromobility sector taking steps down the well-trodden path of the automotive industry, where aftersales account for around a quarter of car manufacturers’ profits.
Flexible working patterns are in need of a rail season ticket to match
The City of London Corporation has developed plans to revive the Square Mile in the wake of the pandemic, centred on making workspaces more affordable for smaller business. Equally integral to the plan is to make travel into the City more economic for workers who, in light of flexible working arrangements which have become entrenched during lockdown, currently face the choice of paying for a seven day a week rail season ticket or premium daily tickets for when they choose to come into the office. Either way, the result can be cripplingly expensive for commuters, and a major hurdle to the return to relative normality.
Reforming rail season tickets to make them more affordable for flexible workers has been on the agenda for some time. Plans to offer flexible season tickets, however, have been put on pause while government advice is to work at home where possible.
When the movement to get us back to the office returns, it’s clear that the government and rail franchises will need to look beyond the current ticketing paradigm of daily, weekly, monthly or annual passes, which are unlikely to fit the new ways of working, however they are priced. Instead, operators may need to look towards digital tariffs which can flex according to how much one travels. These could provide operators with much needed cash flow as well as affordable travel for commuters. The investment in new ticketing technology which can track passenger usage will be significant, but the future of our cities may depend on it.