Electric vehicle charging market study: CMA to include package of remedies in its Summer 2021 market study report

On 26 May 2021, the UK Competition and Markets Authority announced that it would not undertake a market investigation reference on the back of its study into the electric vehicle charging market and will instead propose a package of remedies to address the issues found during the course of the study.

The Market Study

On 2 December 2020, the UK Competition and Markets Authority ("CMA") launched a market study into the electric vehicle charging sector in the UK. The study had two goals in mind: 

• how to develop a competitive electric vehicle (EV) sector while attracting private investment, and
• how to ensure that consumers using EV chargepoints are confident in the service. 

The UK CMA study was unusual, in investigating an emerging market early in its development in order to identify areas of concern at a nascent stage. Most CMA market studies involve larger, established markets that have competitive issues which need to be addressed. This study therefore represented a step in a different direction for the CMA.

Issues Identified in the Study

As part of the study, the UK CMA invited comments from stakeholders, and these comments were published in March 2021. The stakeholder contributions provided insight into emerging themes in the electric vehicle charging market. The CMA identified issues relating to investment and competition in the overall electric vehicle charging market, including challenges around:

• en-route rapid/ultra-rapid charging, in particular on motorways – where concerns about investment and competition exist, given high grid upgrade costs and difficulties for chargepoint operators to access motorway service areas, including where there are exclusive contracts in place;
• on-street slow/fast local charging, i.e., on the kerbside or in local hubs – where emerging issues about limited investment to date and the role of local authorities exist; and
• how consumers interact with both off-street home charging and public charging. 

Decision and Next Steps

The UK CMA published a notice on 26 May 2021 indicating that it would not undertake a market investigation reference following its study on the electric vehicle charging sector. A market investigation is a more detailed examination of a sector, lasting up to 18 months, and the CMA may decide to conduct a market investigation when it has reasonable grounds to suspect that a feature of the market restricts or distorts competition. 

The CMA states that there are a number of emerging issues in the electric vehicle charging sector, particularly with regard to competition at motorways, which are supported by the evidence that it has received to date, and which it is continuing to consider. Whilst the CMA believes that the statutory reference test for a market investigation reference is met with these emerging issues and that they could be addressed by appropriate remedies potentially available through a market investigation reference, the CMA considers that the emerging issues are likely to be more effectively and proportionately addressed through "alternative outcomes".

The CMA states that its intention is "to develop a package of remedies with the market study". These remedies will be set out alongside the CMA's full findings in the market study report, which the CMA is planning to publish in the summer of 2021 (considerably in advance of the CMA's statutory deadline of 1 December 2021).

Whilst the CMA does not state what precise form this package of remedies may take, it indicates that various options are at its disposal, including recommendations to the Government (e.g., concerning a change in policy or law) or guidance to business. 

The CMA notes that if in the future beyond the market study it considers that there are features in the market that merit further consideration, it may revisit the case for a market investigation reference.

Timeline

Will Cashman (Trainee Solicitor, White & Case, London) contributed to the development of this publication.

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