On 2 December 2020, the Competition and Markets Authority (“CMA”) announced a market study (the “study”) into the UK’s bourgeoning electric vehicle charging sector. This blog post considers the scope of the study, and may be of interest to Electric Vehicle market participants across the supply chain.

Whilst the CMA usually conducts market studies in relation to developed and well-established markets, it has expressed that it is ardent to examine the nascent electric vehicle (“EV”) charging sector “to make sure that this new and fast-growing sector works well for UK drivers”. The study will adopt a two-fold focus, understanding: (1) how to create a competitive sector whilst attracting private investment to facilitate the growth of the sector; (2) how to ensure consumers using electric vehicle charge-points have confidence that they can get the best out of the service.

The UK’s market study regime allows the CMA to investigate whether — and if so why  — any market is not working well. If, following an initial market study, the CMA identifies a feature or features of a market that raise competition concerns, it can undertake a detailed market investigation, make recommendations for policy or legal / regulatory changes, or commence individual enforcement actions if it identifies potentially anti-competitive conduct during the market study.

Scope of the Study

As part of the Government’s “green industrial revolution”, the UK will ban the sale of new petrol and diesel vehicles by 2030. Against this background, the CMA has decided to take a “close look at the electric vehicle charging sector, which is crucial to the roll-out of electric vehicles, as part of the Government’s commitment on climate change”.

The scope of the CMA’s market study will be the supply of charge-points for plug-in hybrid and all-electric passenger EVs, comprising cars and light vans. In particular, the CMA will look at EV charging in a range of different settings including home/off-street; on-street; workplace; hub and destination; and en-route charging.

The CMA will examine two core themes within this scope:

• Theme one: developing competition while incentivising investment. Within this, the CMA will explore how to ensure effective competition can be developed alongside fostering investment into the charging network. The CMA will consider how competition may develop in the sector, including having regard to issues around the collection, use, and concentration of data. Specific issues under consideration will include the incentives currently in place to support EV charging infrastructure, the impact of costs, barriers to entry (such as rurality or low population density, contractual provisions such as exclusivity, and connection costs among others) and general policy considerations around EV charging and use.
• Theme two: effective consumer interaction with the sector. The CMA recognises that the success of the EV charging sector will depend to a large extent on how well consumers understand and interact with it. Consequently, the CMA will consider issues such as information and transparency about the sector, tariffs and the ease of comparing charging options / providers and consumers’ experience of using charge-points.

The CMA notes that it wants to “ensure the sector works well for people now and in the future, which will help to build trust in the service and address any competition issues.”

Invitation to Comment

The CMA invites comments in particular on its proposed scope of study.

Any interested party may comment by 5 January 2021.

Possible Outcomes

Upon the conclusion of a market study, the CMA has a range of options to address any identified concerns, including:

• making a reference for a full market investigation (at the end of which the CMA has wide-ranging powers to address any competition concerns identified, including breaking-up businesses);
• guidance to consumers;
• guidance to the sector (i.e. on price transparency); and
• recommendations to the Government where additional support is required (i.e. to local authorities) or where policy or regulatory intervention is needed.

Timelines

The CMA has a statutory duty to conclude its market study within 12 months, but has indicated that it intends to do so “well within” this timeframe.