On 2 December 2020, the Competition and Markets Authority ("CMA") launched a 'market study' into the electric vehicle charging sector in the UK.
Market studies are one of the CMA's tools used to examine possible competition or consumer protection issues in a particular market. Should the CMA have concerns with the electric vehicle charging sector, it could intervene in a number of ways. These include making recommendations to government, taking enforcement action or issuing guidance.
Why has the CMA launched its study?
With the Government having brought forward the ban of new petrol and diesel vehicles to 2030, the switch to electric vehicles for UK drivers has moved a step closer. The CMA has therefore decided to examine in detail the electric vehicle charging sector, which is crucial to the roll-out of electric vehicles.
In particular, the CMA has emphasised the importance of consumers having trust in the sector and having confidence that they will be able to access charge points when they need them (in order to counteract "range anxiety").
What will the study focus on?
The scope of the market study is the supply of charge points for plug-in hybrid and all-electric ‘passenger’ electric vehicles, comprising cars and light vans. This includes charge points in a range of settings, including home and off-street parking, on-street parking, the workplace, hub and destination, and en-route charging.
The study has two broad themes:
- how to develop a competitive sector while also attracting private investment to help the sector grow; and
- how to ensure people using electric vehicle charge points have confidence that they can get the best out of the service.
In relation to the first theme, the CMA will explore how to ensure effective competition can be developed alongside fostering investment into the charging network. As part of this, the CMA intends to consider the different ways that competition may develop in the sector and the issues that might arise, such as the potential for concentration and the use of data. The CMA will also look at the current incentives to build EV charging infrastructure, as well as existing and potential barriers to entry and expansion (for example, rurality or low population density, contractual provisions such as exclusivity, and connection costs).
As regards the second theme, the CMA wants to ensure that consumers can effectively navigate this new sector and be confident that they are getting a good deal. The CMA will therefore look at how to ensure consumers can confidently interact with charge points, focusing on issues such as charging being too complex or opaque and the potential for this to damage consumers' trust.
The study will not cover broader aspects of electricity supply and grid/network capacity, upstream aspects of electric vehicle charging infrastructure such as charge point manufacture, maintenance or software, or competition between car or battery manufacturers. Charging infrastructure for vehicle fleets is also out of scope.
Who can / must respond to the study?
The CMA's 'invitation to comment' is open to any interested party and closes on 5 January 2021.
However, it is important to note that the CMA also has compulsory powers of investigation. Relevant stakeholders may therefore receive mandatory 'Requests for Information', failure to respond to which can lead to the CMA imposing fines.
Concluding thoughts
The decision to launch a market study into a new and developing sector is relatively unusual, with market studies generally being reserved for well-established sectors. In launching this study, the CMA has indicated the important role it thinks a competitive and consumer-friendly electric vehicle charging sector will play in the fight against climate change, as well as its desire to prevent any competition issues before they have a chance to arise.
If you would like assistance in responding to the CMA's 'invitation to comment' or would otherwise like to discuss the implications of its market study, please do not hesitate to get in touch.