Cebr Analysis of 2030 Ban

12  Centre for Economics and Business Research 4.2. The UK’s vehicle fleet in 2022 The first step in our modelling is to develop a snapshot of the current state of the UK’s vehicle fleet. This captures how many vehicles there are by type, propulsion, and age. To do this, we combine various datasets from the DfT’s vehicle licensing statistics10: • VEH0105: Licensed vehicles by body type (car, LGV, etc.) and fuel (diesel, petrol, other). • VEH0124: Breakdown of licensed vehicles by age. • VEH0133: Licensed ultra-low emission vehicles (ULEVs) by body type and fuel (battery electric, plug-in hybrid electric petrol/diesel, hybrid electric petrol/diesel). • VEH0142: Licensed plug-in vehicles by body type and fuel type. • VEH0171: ULEVs registered for the first time by body type and fuel type. These were brought together to develop a robust view of the fleet not provided in a single data source. 4.3. Future development of the UK’s vehicle fleet By its midyear of 2035, the industry body – the Society of Motor Manufacturers and Traders (SMMT) estimates that 46% of cars on the roads could be zero emission under a central scenario; whilst the percentages for goods vehicles will be lower11. Ofgem estimate that there may be 14m EVs on UK roads by 2030 and the Climate Change Committee (CCC) estimate have an estimate of 14-18 million. The CCC estimate that there will be 23.2 million battery electric or plug-in hybrid cars by 2032 (55% of all vehicles)12. In contrast the Cebr estimate that the share of BEV and other non-ICE vehicles could be 35% by 2032 and 50% by 2035. New purchases Additions of new vehicles to the fleet are calculated by first taking new registrations in 2021, from DfT data discussed above, as a starting point. In the Baseline Scenario, these are then assumed to change in future years due to trend growth13 and own-price elasticities14. In the Alternative, when vehicle classes are banned, additions to the fleet are set to zero and the previous year’s demand is divided between remaining vehicle classes according to their demand that year. For instance, in 2030, demand for ICE cars is divided between HEV, PHEV, 10 Vehicles statistics, July 2022, Link. 11 Transport Decarbonisation plan 12 Climate Change Committee – Briefing Document – The UK’s transition to electric vehicles - Link 13 A trend growth rate, which is set to ensure that by 2050 in the Alternative scenario there are 49 million vehicles total, consistent with the CCC estimate. 14 Own-price elasticity. This is assumed to be -0.18 for all vehicles, i.e., a 1.00% increase in the price of a vehicle class would lead to a 0.18% decline in demand for it and vice-versa. This is based on a recent study by the United States Environmental Protection Agency (EPA) - The demand for new automobiles in Norway – a BIG model analysis, Institute of Transport Economics, Norwegian Centre for Transport Research, 2018, Link. In the Alternative, this elasticity is not applied after ICE bans have been introduced – it only makes sense to use this when drivers have the option of switching between ICE and BEV. For BEVs, an elasticity with respect to petrol and diesel prices of 0.6