The Electric Vehicle Buzz – what legal challenges are limiting its development?

The electric vehicle (“EV”) is seen as a cleaner and greener alternative to the traditional automobile which runs on gasoline or diesel fuel. Sales of these vehicles have continued to grow as global economies transition towards more sustainable energy sources.[1] However, to realise this ‘green agenda’, automakers and governments must grapple with various legal and regulatory hurdles that are slowing the growth of the EV industry.

Regulatory hurdles and the role of incentives

One key challenge facing EVs is the various regulatory obstacles and dwindling incentives for manufacturers and consumers. To establish EV infrastructure such as charging stations, for example, automakers must navigate complex land and property regulations.[2] The process of securing the necessary approvals from local authorities and property owners is often complex and lengthy, hampering the expansion of charging networks crucial for widespread EV adoption. This complexity is demonstrated by Tesla’s attempt to expand its Supercharger network in local areas. For example, in some German localities, Tesla has been unable to install chargers because of outdated building codes and zoning laws that don’t reflect EV charging needs.[3] There is also the need to secure access rights, such as easements, for property owners, a process which may be faced with opposition.

The regulatory landscape is also complicated by international trade and tariffs. Tariffs, such as those imposed by the US, EU, and Canada on Chinese EVs, are increasing EV prices, making them less accessible to consumers and potentially diminishing enthusiasm for the transition to e-mobility.[4] US President-elect Donald Trump’s plans for a ‘universal tariff’ on all goods entering the US will likely have extensive implications, impacting not only Chinese EVs but also those from other jurisdictions.[5]

Incentives for a widescale EV adoption are also challenged by governments scaling back EV incentives, a move that could discourage manufacturers from investing in EV research and development.[6] This reduction in financial support may slow the pace of EV innovation and make it more difficult for companies to justify the substantial investments required to bring new EV models to market. It may also lead to EV industry leaders passing costs on to consumers through pricier offerings, further pushing people away from e-mobility.

Employment law and disputes

The EV push has also seen a reconfiguring of the automotive workforce. Economic pressures have forced major automakers like Volkswagen and Ford to implement cost-cutting measures such as workforce and wage reductions.[7] Volkswagen, for example, has decided to close three of its German factories for the first time in its history and cut thousands of jobs. These changes have inevitably slowed the EV transition as companies divert resources to manage these complex organisational shifts. Disputes with trade unions and strikes arising from these restructurings have further impeded progress. As companies grapple with settling these disputes, valuable time and resources are diverted away from EV development and production.

Environmental law and sustainability concerns

Environmental regulations pose another set of challenges for EV manufacturers. The industry is under increasing pressure to meet stringent environmental and energy standards throughout the production process, which can be resource-intensive for automakers. For example, Renault Group has publicly stated that complying with the European Union’s Euro 7 emissions standard could increase vehicle costs by up to EUR 2,000 per car.[8] By making new, cleaner vehicles less affordable, the incentive for consumers to switch to more sustainable automobiles is, again, reduced.

The spotlight has also been drawn on the environmental impact of EV batteries. Concerns over the production, use, and disposal of these batteries have led to calls for more sustainable practices. The Environmental and Climate Change Committee noted, for example, that existing regulations “have not kept pace with the opportunities and challenges offered by EVs.”[9] While innovative solutions like battery swapping are being explored, fundamental issues relating to the sustainability of battery production remain.[10]

Conclusion

The transition towards EVs is crucial for the global shift towards sustainable energy and transportation. However, various legal and regulatory challenges are impacting the pace of this transition. Moving forward, policymakers, industry leaders and environmental groups must collaborate to address these issues and pave the way for a cleaner, more sustainable future in transportation.

[1] International Energy Agency, ‘Global EV Outlook 2024: Moving towards increased affordability’ (IEA, April 2024) <Global EV Outlook 2024 – Analysis - IEA> accessed 28 November 2024.

[2] Marbeth Collins, ‘Navigating Challenges in EV Charging Infrastructure Development’ (E+ELeader, 1 October 2024) <Navigating Challenges in EV Charging Infrastructure Development - Environment+Energy Leader> accessed 30 November 2024.

[3] William Johnson, ‘Tesla Supercharger Network faces legal challenges in Germany’ (Teslarati, 17 August 2022) <Tesla Supercharger Network faces legal challenges in Germany> accessed 10 December 2024.

[4] Michael Race, ‘EU hits China with big taxes in electric car sales battle’ (BBC News, 4 October 2024) <Electric cars: EU hits China with tariffs in battle for sales - BBC News> accessed 01 December 2024.

[5] Ryan Ermey, ‘Trump’s tariff plan: Why he’s pushing for them, and how they might end up raising prices’ (CNBC Make It, 7 November 2024) <Trump's tariff plan: How tariffs work, why they might increase prices> accessed: 29 November 2024.

[6] Casey Crownhart, ‘Some countries are ending support for EVs. Is it too soon?’ (MIT Technology Review, 23 September 2024) <Some countries are ending support for EVs. Is it too soon? | MIT Technology Review> accessed: 29 November 2024.

[7] Theo Leggett, ‘Ford cuts 800 jobs claiming weak demand for electric vehicles’ (BBC News, 20 November 2024) <Ford to cut 800 UK jobs as electric car sales flag - BBC News> accessed 23 November 2024.

[8] Nick Gibbs, ‘Euro 7: Renault boss warns of factory closures as car costs soar’ (Autocar, 2 February 2023) <Euro 7: Renault boss warns of factory closures as car costs soar | Autocar> accessed 10 December 2024.

[9] Environmental and Climate Change Committee, ‘EV strategy: rapid recharge needed’ (www.parliament.uk, 6 February 2024) <House of Lords - EV strategy: rapid recharge needed - Environment and Climate Change Committee> accessed 1 December 2024.

[10] Christopher Tang and S. Alex Tang, ‘The Rebirth of EV Battery-Swapping Services And Why Their Time is Now’ (Forbes, 15 April 2024) <The Rebirth Of EV Battery-Swapping Services And Why Their Time Is Now> accessed 1 December 2024.