TH T NEX NEX A T’SAPLUS -LEVE RE T-LEVEL FU T L S ES TS. UNCTIONAL UL LITY. THAT S. The No.1 magazine for automotive information MAY 2023 www.aftermarketonline.net INSIDE Month in the life of a vehicle tech P24 Failure is always predictable according to Frank Massey, so you need to learn to expect the unexpected Travelling without moving? P28 Perseverance and a solid test plan eventually got 2019 Top Technician winner Neil Currie the fix on a problematic Mercedes-Benz Dance the night away P30 Andrew Marsh asks: Are politically motivated policies leading to the destruction of the European motor industry? REGISTER FREE FOR AUTOMECHANIKA BIRMINGHAM, 6-8 JUNE: HTTPS://AUTOMECHANIKA-2023.REG.BUZZ/PRESS
• Legal Advice • HR Support • MOT Quality Control Schemes • Health & Safety Programmes • Technical Support Helpline • MOT & Technical Training • Implementing Legislation • Digital Service Records • Trust My Garage • Utilities Management • Industry Scam Information • Access to ADR for consumer disputes • Exclusive Member Offers & Services • Lobbying for issues affecting your garage ...and any other issues you need help with We can support you with: DO YOU OWN OR RUN AN INDEPENDENT GARAGE? The Independent Garage Assocation has been your trade body since 1913. Join us to receive everything you need to run a successful garage business, all in one place at an unbeatable price. Contact our friendly team today to find out how your independent garage can benefit from membership: enquiries@rmif.co.uk 01788 225 908 IndependentGarageAssociation.co.uk Scan here to visit the IGA website
www.aftermarketonline.net MAY 2023 AFTERMARKET 3 CONTENTS BUSINESS 8 Big issue: Big fish, little fish, one fish? 10 Spring Budget 2023: Sector reacts 14 EVs: The power of software TOP TECHNICIAN/TOP GARAGE 18 Next steps 20 Delphi Technologies: Keeping up TECHNICAL 22 Aftermarket of the future 24 Frank Massey: A month in the life 26 Neil Currie: Travelling without moving? 30 Andrew Marsh: Dance the night away 32 Repairify: Supply chain issues IN FOCUS 34 Snap-on: Diagnostic focus 36 Tyres and tyre bay 40 Additives and cleaners 44 Remanufactured components 48 Air conditioning 52 Snap-on: A/C focus PLUS... 54 Competition/General products 56 On the road: KCS 58 Garage visit: Billingborough Cars and Commercials 60 EVs and hybrids 62 Training update 64 Recruitment 66 Teabreak WHY DID THE CHICKEN CROSS THE ROAD? Editor | Alex Wells alex@aftermarket.co.uk | +44 (0) 1732 370 345 Managing Director | Ryan Fuller ryan.fuller@dfamedia.co.uk | +44 (0) 1732 370 340 Contributors Neil Currie | Julien Deconinck | Neil Kennett | Andrew Marsh | Frank Massey | Martin Pinnell-Brown | Operations Manager | Emma Floyd emma.floyd@dfamedia.co.uk | +44 (0) 1732 370 340 Marketing Executive | Hope Jepson hope.jepson@dfamedia.co.uk | +44 (0) 1732 371081 Finance Department accounts@dfamedia.co.uk | +44 (0) 1732 370 340 Chief Executive | Ian Atkinson ian.atkinson@dfamedia.co.uk | +44 (0) 1732 370 340 Published by | DFA Aftermarket Media Ltd 192 High Street, Tonbridge, Kent, TN9 1BE Alex Wells, Editor Average net circulation July 2021 to June 2022 19,073 @aftermarketmagazine @aftermarket01 @aftermarketmagazine ISSN 2516-9149 Aftermarket is published 10 times a year and is sent free of charge to applicants meeting the publisher’s criteria. All others may subscribe at £60 per anum, £120 Europe and £150 rest of the world. While every care is taken to provide accurate information, the publisher cannot accept responsibility for any errors or ommisions, no matter how caused. All rights reserved. No part of the publication may be reproduced or transmitted in any form or by any means without prior consent of the publisher. The views of contributors do not necessarily represent the views of the publisher. Copyright: DFA Media Group 2023. The MOT consultation issued at the start of the year closed at the end of March, as we were putting the May issue of Aftermarket together. While the sector is largely united in its opposition to shifting to a 4-1-1, or worse still, a 4-2-2 pattern, a number of surveys have suggested that motorists may not view the issue in the same way as the industry. Indeed, as far as some are concerned, it is just an awkward bit of annual bureaucracy which they would be happy to lose. Sometimes, it seems like the government views it that way as well, which is unfortunate. The road safety benefits offered by the annual check on a car from when it hits three years old are well-documented, and likely to be responsible for the UK having some of the safest roads in the world. It’s the classic chicken-or-egg situation; Did the MOT make the roads safer by mandating a high level of vehicle maintenance, or is it that people are keeping their cars spick-and-span of their own accord, which provides good levels of MOT compliance? We know it’s the first one don’t we. Alright, let’s ask the ultimate poultry-related question; Why did the chicken cross the road? The answer is obvious; Because all the plus-three years old cars had to take a MOT test, their brakes and the rest of the systems needed to be properly maintained, so our avian friend could risk trotting across, safe in the knowledge that if a car did suddenly appear at the brow of the hill just up the road, it should be able to stop before hitting him. Yes, I know it’s not funny, but road safety isn’t a joke. What does seem like a joke is how often the government has tried to change the frequency of the test, when it is so clear that the benefits so obviously outweigh any negative aspects. For more on the MOT consultation, turn to page 4 in News for a round-up of responses on the issue. Now we wait for the outcome. Fingers crossed everyone. Maintaining high standards across the board is also absolutely vital in a professional sense, which is one of the reasons that both Top Technician and Top Garage were created. As you read this, the first rounds for both competitions will have closed, although if you are one of those lucky people getting their May issue in the last few days of April, there might still be a chance to get into Top Garage before the closing date. Turn to page 18 for more information. Staying on the Top Technician and Top Garage side, we have a look at the importance of staying up to date with tech and training from Full Event Partners Delphi Technologies. You can find that on pages 20-21. If that’s not enough for you, we also dropped in recently to see Billingborough Cars and Commercials, Top Garage 2022 winners in the 4-6 staff members category. You can find that on pages 58-59. Lastly, don’t forget to look both ways before crossing… Enjoy!
NEWS The motor industry’s deep concerns over proposals contained in the MOT consultation, which closed on 22 March, may be at odds with the views of ordinary motorists, some surveys have suggested. According to an IMI member survey, 87% are against moving the first MOT test from when a car is three years old to when it is four years old. However, a concurrent poll of motorists performed by the organisation found that just 51% were in favour of keeping the MOT start at three years. IMI Policy Manager Hayley Pells commented: “We received a resounding confirmation from our members that the first MOT should not be extended due to increased road safety risk. While only 51% of motorists we surveyed felt the same, we believe there is sufficient weight of evidence to give the Department for Transport a very clear indication that any change to the start date would be detrimental for all road users.” Looking at the economic impact, 88% said moving the first MOT would have an effect on garage income, with 60% saying less MOTs would mean an overall drop in service work. Another survey found 89% of drivers are in favour of starting the MOT when a car is four years old, rather than when it hits three years old. The survey, undertaken as part of the monthly Startline Used Car Tracker from Startline Motor Finance, also found that 71% of drivers are convinced modern cars are safe enough to not need a MOT until hitting four years old, with 36% claiming to be motivated just by the cost-saving factor. Startline Motor Finance CEO Paul Burgess said: “There’s clearly overwhelming public backing for this move, according to our findings. This puts the public very much at odds with the motor industry, which generally believes that a three-year MOT is essential and has been very vocal in criticising the idea.” However, a survey performed by the SMMT found that 67% of UK motorists strongly support keeping the first MOT at three years. 67% went on to say they thought shifting to a start from when a car hits four would put lives in danger. 74% added that the typical £35-£45 cost of a test is a price worth paying for assurance on vehicular roadworthiness. SMMT Chief Executive Mike Hawes observed: “Our survey shows that drivers support the existing MOT frequency and that there is little appetite to change it, despite the increased cost of living. If changes to the MOT are to be made, these should enable testing of advanced electrified powertrains, driver assistance technologies and connected and automated features, as drivers value the peace of mind the MOT offers.” Meanwhile, DVSA figures cited by the IAAF show 300,000 vehicles fail their first MOT test at three years. Tyres are one of the most common failure items for all vehicle types. 57% of all electric vehicles fail their first test on tyres, compared with 35% for diesel vehicles and 37% for petrol vehicles. IAAF Chief Executive Mark Field observed: “Moving the first MOT test to four years gives motorists the false perception that vehicles are more reliable when the data says otherwise. It also potentially means motorists face worsening problems, higher repair bills and more polluting vehicles if cars remain unchecked for longer periods.” IGA Chief Executive Stuart James concluded: “Based on the research and member feedback compiled when writing our consultation response, it is clear that any changes made will impact road safety far more than the government anticipates. It is important that the MOT test is updated to incorporate new vehicle types and technologies to ensure that vehicles’ structures, components and systems operate to a set minimum standard. However, road safety must also be taken into account here, so the period of time a vehicle can be used before its first MOT should remain unchanged while any changes to the scheme are rolled out, tested and analysed.” A petition that calls for a halt to the government’s plans to extend the period before a vehicle has its first MOT petition is currently running. To sign the petition, go to: visit: https://petition.parliament.uk/petitions /631650 4 AFTERMARKET MAY 2023 www.aftermarketonline.net Motorists and industry at odds over MOT proposals? JLR DPF multi-billion pound class action DPF problems experienced by owners of a number of Jaguar and Land Rover models have led to a group action against the manufacturer being brought to the High Court of England and Wales, with £3 billion in damages being sought. According to the claim, models including the Range Rover Evoque, Range Rover Sport, Range Rover, Land Rover Discovery, Land Rover Discovery Sport and Jaguar E-Pace have defective DPFs that JLR currently cannot fix, and that these cars regularly go into limp mode as a result. The claim also suggests these defects led to accelerated engine wear forcing owners to pay for additional servicing, in some cases requiring engine replacement. James Oldnall, Managing Partner at Milberg and lead litigator on the claim says: “We want to seek redress for those who have not only been misled by Jaguar Land Rover, but have been put at risk by the company not admitting affected car models have defective components including faulty exhaust filters.” According to the law firm, over 500,000 new car owners may be eligible to make a claim, and thousands more used car owners may also have claims. If the case is successful, claimants could receive between £3,000-£16,000 each in compensation. Jaguar Land Rover is facing a similar case in Australia which is ongoing.
MONTH 2017 AFTERMARKET 3 www.aftermarketonline.net MAY 2023 AFTERMARKET 5 ALLDATA Europe teams up with Top Technician and Top Garage 2023 ALLDATA Europe has added its support to Top Technician and Top Garage 2023 as a Full Event Partner for both competitions. Commenting on its involvement with the competitions, Simon Frost, UK Sales Director at ALLDATA Europe, said: “We are proud to show our support to this year’s best-in-class garages and technicians, as they battle it out to win the prestigious titles and awards on offer. “Our platform, ALLDATA Repair, gives garages and technicians instant access to original and unedited vehicle manufacturer repair data. This means they can simplify complicated diagnostic and repair jobs. All involved in Top Technician and Top Garage 2023 understand the importance of accurate technical data, so this is a great collaboration and opportunity for us to support excellence in the aftermarket.” Top Technician and Top Garage 2023 come to you in association with the Garage Equipment Association (GEA), the Independent Automotive Aftermarket Federation (IAAF) and the Institute of the Motor Industry (IMI). Full Event Partners: Snap-on, TOPDON, TechMan, Delphi Technologies, BookMyGarage and ALLDATA Europe. Have a cuppa on Airtex and A1 Airtex recently encouraged mechanics to have a tea break via a special tuckbox sent out to garages. Welcome boxes were sent out during April to workshops as a ‘thank you’ from Airtex for purchasing their water pump kits from A1 Motor Stores. The boxes included an Airtex mug, tea, coffee, as well as snacks such as biscuits, a chocolate bar and crisps. To keep the good times rolling, follow-up boxes with tea, coffee and biscuits will be included when garages buying an additional Airtex water pump kit from A1. Commenting on the promotion, Group Brand & Marketing Manager (Europe) Sam Robinson said: “Since launching Airtex with A1 Motor Stores in 2022, we’ve seen the A1 members and their garage customers really embrace the brand and come to love the OE quality and performance that we deliver so it’s great to give a little something back that technicians can enjoy when taking a welldeserved break.” Full Event Partners:
NEWS 6 AFTERMARKET MAY 2023 www.aftermarketonline.net The cost of vehicle repairs rose by 40% between 2018 and 2022, according to an analysis of warranty claims paid over five years by Intelligent Motoring. According to the study of 12,000 claims from the warranty provider, costs climbed the most between 2018 and 2019, with average claim costs growing by 19%. The period 2020 to 2021 saw a further 10% increase. Looking just at the period between July and December last year, the average cost of warranty claims increased by 37%. According Intelligent Motoring CEO Duncan McClure Fisher, repair costs started to climb after the Brexit referendum in June 2016: “Without doubt the majority were unprepared for the knock COVID-19 inflicted on the automotive sector. But the industry had been facing challenges even before the pandemic hit, meaning COVID-19 was simply another element that deepened those difficulties.” Duncan added: “The resulting financial impact on motorists is significant and has been made worse by wider pressures including rising inflation and the overall increased cost of living.” Vehicle repair costs up 40% in five years Tuck in with Tunnock’s and GS Yuasa for JustEat prize draw The team-up between GS Yuasa and Tunnock’s is set to continue with a pack of ten Tunnock’s Tea Cakes coming with each GS and Yuasa battery purchase, and a chance of winning one of three £100 JustEast vouchers too. The two companies first collaborated at the end of last year as Winter began, and are now back together now Spring has come. As well as ten tea cakes, each Tunnock’s pack includes a unique code to the prize draw. Commenting on the promotion, Jon Pritchard, General Sales & Marketing Manager at GS Yuasa Battery Sales UK, said: “We are hugely excited to be continuing our partnership with Tunnock’s and making the task of battery replacement that little bit sweeter in doing so.” To be in with a chance of winning one of three £100 JustEat vouchers, enter your code at: www.gs-yuasa.eu/tunnocks New trade website at Arnold Clark Autoparts A new trade website has been launched by Arnold Clark Autoparts, initially serving customers in the Glasgow area with a wider roll-out on the way. The site includes a live chat feature that also enables customers to check stock levels or receive fitment advice. Qualifying transactions can earn customers A-Points, which customers can spend on tech, holidays, and cinema trips. Commenting on the new e-commerce platform, Arnold Clark Autoparts Group Factor Manager Craig McCracken said: “The go-live of the new site is the latest step in a series of innovations we’re working on to help our customers.” For more information, visit: www.arnoldclarkautoparts.com COMING IN AFTERMARKET’S JUNE EDITION: Our full Automechanika Birmingham 2023 preview.
NEWS www.aftermarketonline.net MAY 2023 AFTERMARKET 7 Follow us on Facebook @aftermarketmagazine Ben Ball returns for 2023 Tickets are now on sale for the 2023 Ben Ball, which is being held at London’s Old Billingsgate Market on 6 December. Ben Ball 2022 sold out rapidly and more than 600 automotive industry figures attended the event, joining forces to raise over £120,000 – one of the highest ever achieved at a Ben Ball. Matt Wigginton, Director of Partnerships, Engagement and Income at Ben, said: “We hope you’ll join us at Ben Ball 2023 for a spectacular evening of celebration and entertainment. We invite everyone in the industry to book tickets and join us. We can’t wait to welcome you to Old Billingsgate Market again this December for the highlight of the automotive industry calendar.” To book tickets, visit: https://ben.org.uk/getinvolved/individual-and-corpor ate-events/ben-ball2022/?utm_source=F_Corp&ut m_medium=PR&utm_campaig n=BB2 Pro-Align is trialling a new delivery service that will put all orders for the Hunter TCX54 Tyre Changer with Bead Press System in transit and operational at a garage within 24 hours. Pro-Align CEO Clive Seabrook observed: “This will help streamline our own customer service as well as helping our customers do the same for theirs. What’s important about this new service is how quickly our customers can start using the equipment to make their business more money.” If the trial is successful, Pro-Align will expand the service to its other wheel servicing products. For more information, visit: www.pro-align.co.uk 24-hour delivery people: Pro-Align trials new rapid service IGA offers Invoice Checker The IGA has begun offering an Invoice Checker Service for its members, which helps garages to find the best utility deals in the market. Frank Harvey, Head of Member Services for the IGA commented: “With the cost of living and business overheads at an all-time high, getting the best price for outgoing bills is imperative. UK Garages are relying on the best rates, guidance and offers to help control their costs. IGA members can drive down costs by utilising IGA’s bespoke Invoice Checker service, in association with Spiral Utilities Our members can ensure that they aren’t getting caught on ‘roll over’ or expensive utility contracts.” To find out more about IGA membership, please visit: https://independentgarageassociation.co .uk/membership-packages-pr/
8 AFTERMARKET MAY 2023 BIG ISSUE www.aftermarketonline.net As Aftermarket reported last month, the owner of GSF Car Parts, Canadianbased Uni-Select Inc has been bought by U.S-based LKQ Corporation, which owns LKQ Euro Car Parts in the UK, along with a host of other companies across Europe. Commenting on the sale, Uni-Select Executive Chair and CEO Brian McManus said: “We are extremely grateful for the efforts of the GSF team for the integral part they have played in the success of Uni-Select and its substantial growth since 2017.” For the time being, the two companies will run as usual. This includes GSF Car Parts and its chain of 180 branches around the UK. Ultimately though, GSF Car Parts will be sold on. LKQ Corporation later made clear that it will be looking to sell the factor chain. The deal will need to meet the approval of the Competition and Mergers Authority (CMA) in the UK, and LKQ Corporation will offer to sell GSF as part of its application for the CMA’s approval of the transaction and the divestment. In the meantime, LKQ Corporation will not be involved in the day-to-day running of the GSF business with the existing management team remaining in place and the organisation ringfenced from LKQ. Dominick Zarcone, President and Chief Executive Officer of LKQ Corporation, said: “As detailed in the presentation shared on our website upon announcing the acquisition, we expect to divest GSF following receipt of relevant regulatory approvals. We hope this announcement helps to reassure the UK aftermarket that we remain committed to competition in the sector.” GSF Car Parts President and COO Sukhbir Kapoor went on to say: “We are a strong and healthy business, optimistic about the eventual outcome of the divestment process, given the strength of GSF and the talent of our 2,500 people across the UK. Everyone at GSF Car Parts remains committed to driving value and delivering the excellent service to our customers on which the business has built its strong reputation.” LKQ’s acquisition of the Andrew Page business in 2017 led to it being required to sell on branches in nine areas in order to conform with competition rules. Reassurance Following news breaking on LKQ Corporation’s acquisition of Uni-Select, the IGA was contacted by GSF Car LITTLE FISH, BIG FISH, ONE FISH? With GSF Car Parts set to be sold following the LKQ/Uni-Select deal, what will happen to its network of 180 outlets, and how will the aftermarket be affected?
MAY 2023 AFTERMARKET 9 www.aftermarketonline.net Parts to reassure its members that the business will be fully divested from LKQ in terms of aftermarket parts supply in the UK. IGA Chief Executive Stuart James observed: “We are pleased that GSF has reached out directly to the IGA to provide reassurance to independent garages. As the trade body and voice of the independent garage sector, we welcome engagement with the parts sector to ensure garages have access to a fair and competitive aftermarket parts supply chain, and we are satisfied that GSF’s management are committed to ensuring full and fair competition is in place.” He added: “It is clear from our dialogue with GSF that they are aware of the concerns of the sector and plan on making sure their customers continue to receive a quality and competitive service, ensuring businesses and consumers alike continue to benefit from a fair marketplace.” Ongoing consolidation There has been a trend of ongoing consolidation in the market for a while now, with major names being absorbed, and their branches becoming parts of other chains, which were themselves then absorbed. Just in the last decade, Camberley Auto Factors were bought by Andrew Page, who went onto take on 21 Unipart sites, with more going to Euro Car Parts. Andrew Page then found itself being bought by Euro Car Parts, which led to a period of wrangling due to the Competition and Markets Authority (CMA) deeming the deal anti-competitive in ten areas across the UK. Meanwhile, Autosupplies Group bought up Butlers Automotive and Leisureways UK. The list goes on. Commenting on the overall trend towards ongoing consolidation, IAAF CEO Mark Field commented: “In many respects the distribution sector has been consolidating since the turn of the century, so it is not a new phenomenon. I believe competition to be as healthy as ever and motor factors continue to offer an exceptional level of service to independent garages, which in terms of deliveries may not be sustainable long term. It’s therefore important for businesses to communicate better, something which was identified during the Coronavirus pandemic. At IAAF, we’re seeing investments made by motor factors of all sizes to improve every part of their business, which in turn benefits the garage.” Mark added: “The work of the IAAF in the coming years, with our growing garage membership will be to bring garages and motor factors even closer together, enhancing communication and training so that the aftermarket continues to represent itself as the only credible choice for vehicle service and repair.” Global market picture Explaining where the LKQ/Uni-Select deal sits in terms of the overall global market picture, Quentin Le Hetet, Country Director at GiPA UK observed: “The aborted IPO of PHE was the last big news in the global news of part distribution. This one is the biggest deal since NAPA purchased AAG.” On the surprise nature of the announcement, Quentin said: “Perhaps there were some signs with recent change of management at Uni Select top level, however we did not see it coming either.” As it stands, with LKQ Corporation looking to sell on GSF Car Parts, the impact on the UK market may not be that significant. Quentin concurred: “The communication of the divestment regarding GSF Car Parts seems to indicate that this will not impact the UK market at all. “ On who could be interested in buying an operation the size of GSF, Quentin mused: “Some important European players might want to get a better footprint on the UK market.” It would not be a case of plug-and-play for an overseas newcomer to the UK aftermarket though: “If the buyers are not currently in the UK market, they will definitely need to learn to understand how the UK aftermarket works. This is quite different from the US, or some major European markets.” On how all of this might affect UK garages, Quentin added: “I would say it is impossible to speculate at this stage. To be continued.” The Garage Equipment Association e Upholders of Industry standards since 1945 ard ! reditation c for hisac Ask your engineer f cr IS Y . Y ent A For peace of mind always use a Garage Equipm Association member. GEA accredited engineers work to an industry code of conduct Your assurance their skills and knowledge have been independently assessed. YOUR EQUIPMENT ENGINEER GEA ACCREDITED? Th .c www.gea co.uk xp Dat GEA ACCREDITED ENGINEER Name Company Discipline E te ID Number XX123456 XX123456 XX123456 XX123456 XX123456 In many respects the distribution sector has been consolidating since the turn of the century, so it is not a new phenomenon ”
10 AFTERMARKET MAY 2023 BUSINESS www.aftermarketonline.net The chaotic events surrounding the abortive mini-Budget of September 2022, and the rapid change-in-direction that led to Rishi Sunak becoming Prime Minister found their equal and opposite reaction in Jeremy Hunt’s sedate Spring Budget. Points relevant to the automotive sector included the extension of the 5 pence fuel duty reduction, with overall fuel duty frozen for 12 months, while an additional £200m per years has been added onto the £500 million allocated to deal with potholes in UK roads. On the overall business front, the scheduled Corporation Tax increase to 25%, up from 19% went ahead. Looking at investment, businesses will be able to write off the cost of investment in equipment to reduce taxable profits from until 31 March 2026. This replaces the SuperDeduction. Tax relief worth £600 million on energy efficiency measures, intended to help reduce energy usage by 15% was also announced. Looking at the overall economy, it was announced that the Office for Budget Responsibility expects that the UK will avoid recession in 2023, despite the economy being expected to shrink by 0.2%. For next year, 1.8% growth is predicted, which will rise to 2.5% in 2025 and 2.1% in 2026. Inflation should also be down to 2.9% by the end of 2023. In the last three months of 2022 it was 10.7%. Industrial strategy SMMT Chief Executive Mike Hawes said: “We face fierce international competition so it was pleasing to hear the Chancellor directly reference industrial strategy and measures to attract investment. Tax breaks for capital expenditure, which the industry has long called for, extensions to climate change agreements plus action to alleviate the high cost of living and encourage more people into work are all muchneeded. Investment zones which focus on advanced manufacturing, of SPRING BUDGET 2023: AUTOMOTIVE SECTOR REACTS The Spring Budget offered few surprises for the motor industry, and presented a number of missed opportunities around EVs
Thanks to Mewa industrial cleaning wipes, the environment is becoming a little cleaner. Mewa
12 AFTERMARKET MAY 2023 BUSINESS www.aftermarketonline.net which automotive is an exemplar, R&D and technology are also positive steps. “There is little, however, that enables the UK to compete with the massive packages of support to power a green transition that are available elsewhere. Indeed, the announced fuel duty freeze contrasts with an absence of measures to boost uptake of zero emission vehicles, such as reducing VAT on public charging. We, therefore, look forward to additional policy announcements that support advanced manufacturing sectors, as the right conditions will enable the investment that drives growth across the country.” Pivotal moment NFDA CEO Sue Robinson observed: “It's positive to see that government has addressed some key areas which impact the automotive sector, including maintaining the fuel duty freeze and the replacement of the super deduction tax with a new investment allowance scheme. “However, it is clear that government still does not entirely understand the significance of incentivising motorists’ transition to electric and investing into charging infrastructure. NFDA urges government to place more emphasis on financing and levelling up the electric vehicle landscape, matching the efforts and investments franchised dealers have made, and continue to make, if they want to meet their ambitious 2030 deadlines and 2050 net-zero targets.” On the Corporation Tax rise, she said: “Ultimately, we are disappointed that the Chancellor has not reversed the corporation tax rise to 25%. Keeping corporation tax at 19% would have helped franchised dealers to maintain the high levels of investment required to support the electrification of their vehicle stock, another example of franchised dealers supporting government’s net-zero targets. This transition has forced dealers into levels of investment which has not been seen in the industry in decades. Sue continued: “NFDA cautiously welcomes the replacement of the super-deduction with a new investment allowance scheme. This involves a 100% write-off of capital expenditure expenses immediately from profits. In some circumstances, the deduction may facilitate greater investment by dealerships, but this does not make up for the disincentive to invest as a result of the rise in corporation tax.” Moving onto the skills shortage, Sue said: “We have continuously called on the government to rethink the apprenticeship levy scheme and it is a disappointment that nothing has been announced on this, or for apprenticeships for young people in general. Businesses need help to source talent and promote employment into such a vital sector for the UK economy.” It was what was not said that was the biggest cause for concern though: “We are extremely disappointed that not a single mention of electric vehicles or charging infrastructure was mentioned in today’s budget announcement. If the UK government’s goal is to stop the sale of new petrol and diesel cars and have 300,000 charge points in place as a minimum by 2030, there needs to be much more significant investment – and this has to be incentivised by the Chancellor in future Budgets. "The recent announcement to introduce Vehicle Exercises Duty (VED) for electric vehicles in 2025 has reduced the appeal of buying a new electric car as motorists will no longer benefit from a tax-free purchase that differentiated it from its ICE counterpart. This sent the wrong message at the wrong time and the Chancellor still has not established a policy on electric vehicles that sends the right message. This, NFDA believes, was a missed opportunity to create a comprehensive road tax scheme. “Going forward, government support will be critical to the success of the electrification of the vehicle parc in the UK. Government’s neglect to support the less affluent from purchasing an EV, a product which remains a price premium and a significant barrier to adoption, risks undermining the movement and their net-zero targets and destabilising the EV market.” Bright point Paul Hollick, Chair at the Association of Fleet Professionals concurred: “This
MAY 2023 AFTERMARKET 13 was a Budget more noteworthy for what it didn’t include rather than what it did. We’d have liked to have seen measures announced ranging from the creation of an EV charging regulator through to national coordination on Clean Air Zones, as outlined in our recent tax and regulation manifesto. However, there was little content that showed the government has been thinking about business road transport. “The one bright point for fleets was the freeze in Fuel Duty. An increase in 11 pence per litre would have been extremely unwelcome at a point in time when the economy is struggling and removing that possibility is very much welcome. Further positives are difficult to identify but a recognition that more people need to be encouraged back into the workforce, through pension changes and childcare measures, could potentially help to a degree in a fleet sector where recruitment remains an issue.” Relative strength Philip Nothard, Chair at the Vehicle Remarketing Association, noted: “Really, what the remarketing sector is overwhelmingly looking for from the government after the events of the last few years – the pandemic, the war in Ukraine, the domestic economic chaos we saw late last year – is a stretch of stability that allows the relative strength that we have seen in the used car and van sector to continue. The Budget probably delivers on that. There is little drama in its contents but measures such as the retention of the £2,500 energy price guarantee should mean that the cost of living crisis will at least become no worse, if not improve. This should mean consumer confidence remains stable, something helped by the forecast of avoiding technical recession. “For motorists in general, the freeze in Fuel Duty and additional help for potholes are both welcome while the childcare and pension measures designed to get people back into the workforce are good ideas which, given the labour shortages that we are seeing across remarketing, may have a positive effect. “Finally, we have been highlighting the need for some form of support in the used market for electric vehicles and there was no news in that area, but we remain hopeful that the government are listening to the points we are making and will take action relatively soon. This is something that is very much needed to ensure the smooth electrification of the used EV sector.” Measured approach Paul Burgess, CEO at Startline Motor Finance, broadly welcomed the steady-as-she-goes approach of Jeremy Hunt’s Budget: “For the retail motor industry and motor finance specifically, this is a relatively benign Budget without any moves that will either noticeably boost or harm prospects. Really, it’s hallmark is an extremely measured approach, as seen in the decision to extend the energy price guarantee by three months in order to not worsen the cost of living crisis. The economy is performing just a little better than expected at the end of last year and there seems to be a mood of gently trying to ensure that trend continues, with great store placed on avoiding recession. “It’s important to remember that it is only seven months since the fated mini-budget and this is a Budget very much about being seen to make no sudden, dramatic moves and convince onlookers that the Sunak administration is one that is, above all else, fiscally responsible. Recent news about bank collapses in the US and the plight of Credit Suisse does raise the possibility of more unanticipated shocks hitting the economy, so this cautious approach is perhaps understandable, even if there is a strong argument for a more strategic and proactive approach on growth than the measures the Chancellor revealed.” Looking specifically at the ongoing fuel duty freeze, PRA Executive Director Gordon Balmer said: “Petrol and diesel prices are still extremely volatile due to the ongoing war in Ukraine. Many motorists will breathe a sigh of relief at the Chancellor’s decision to extend the fuel duty freeze and maintain the 5 pence per litre cut. We welcome the government’s commitment to keep fuel duty rates under review and hope that they will continue to do all they can to ease the burden of high energy prices on motorists. As always, our members are committed to keeping their communities fuelled and fed.” Welcome news Graham Conway, Managing Director at Select Car Leasing, also welcomed the continued freeze on fuel duty: “We wholly welcome the Chancellor’s announcement on fuel duty. The poorest families, as well as businesses operating a fleet of vehicles, would be hit the hardest by any rise in the price of fuel. For many people who are really feeling the effects of the cost of living crisis, such a price hike could have tipped them over the precipice in terms of their own budget. “The Chancellor’s decision to extend the cut to Fuel Duty will come as extremely welcome news to motorists and businesses across the UK that rely on traditionally-fuelled vehicles for their essential travel. It’s interesting to note that the continued freeze on Fuel Duty actually goes against what some experts were forecasting. In November last year, the Office for Budget Responsibility (OBR) predicted a 23% rise in Fuel Duty, which would have increased the price of petrol and diesel by around 12 pence per litre. The extension to the cut means financial relief for millions of drivers.” James Tew, CEO at iVendi added: “The key economic threat to the retail motor industry over the last year or so has been the possibility that the new and used car and van sectors would be badly hit by the cost of living crisis. So far, however, effects have been limited, and the main plus point from the Budget is that the government seems to recognise that it’s important personal finances are not allowed to get much worse, as seen in the three month extension to the energy price guarantee. While they may insist that today’s measures were largely about growth, the underlying message is one of stability. This, in itself, is welcome after the various economic and social storms we have all had to weather in recent years but there is also perhaps an absence of really big ideas to get the economy moving, despite a basket of smaller scale, targeted measures designed to promote growth.” Government still does not entirely understand the significance of incentivising motorists’ transition to electric and investing into charging infrastructure ”
14 AFTERMARKET MAY 2023 BUSINESS www.aftermarketonline.net Electric vehicle adoption is outperforming all expectations, and is now anticipated to represent over half of US vehicle sales by 2030. The key link to mass EV adoption is now software, not hardware or vehicles. Fortunately, software innovations are already providing solutions to many of the scaling challenges and will play a crucial role in EV adoption. From $1 billion in 2021, EV charging software is forecast to grow to $25 billion by 2030, making it one of the fastest growing software sectors in the market today and a huge opportunity for value creation for founders and venture capitalists. Key challenges in EV adoption that software can help solve Electric vehicles are set to revolutionise the industry. But a full transition to EVs requires overcoming several critical challenges. The first relates to infrastructure and interoperability. While the number of charging points is growing, it is still far away from being able to meet the demands of many EV drivers. EV drivers still must plan their journeys, especially longer ones, as charging networks are still inadequate, and range anxiety remains a major stumbling block for many willing consumers. As the EV market grows, it will strain the grid. According to some estimates, we will need 1.1 EV chargers for every EV car. This could increase peak electricity demand on local grids by 15-50%, requiring expensive upgrades to accommodate the increased demand. The interoperability of different EV charging systems remains a major issue – currently it causes problem of overnight charging for EV owners who lack off-street parking and journey planning. Having varying protocols meant there were different standards/levels of device management, transaction handling, security, smart charging functionalities. New protocols like the Open Charge Point Protocol (OCPP) and communication standards such as ISO 15118 are now in place but will need continuous co-development by all stakeholders, to increase compatibility between different charging stations and management systems. The second key challenge is equipment and maintenance cost. EV charging hardware remains expensive. The cost of a charging station varies significantly by type though generally, a Level 2 240-volt (the typical home charger – with capability for full charging around 6-8 hours) station costs up to $2,000 incl. installation costs, with level 3 charging stations intended for public and commercial networks costing typically between $10,000 and $40,000. In addition to hardware and installation costs, soft costs drive up operational costs. These soft costs include complex permitting processes, lagged communication between utilities and providers, and high maintenance cost if not serviced well (especially for outdoor chargers). The final challenge relates to the length of time and cost of e-fuelling. Refuelling a petrol car is straightforward; Charging an EV remains more complex. Some stations EVS: THE POWER OF SOFTWARE Software is now driving the worldwide Electric Vehicle charging market BY Julien Deconinck, Managing Director of DAI Magister
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16 AFTERMARKET MAY 2023 BUSINESS www.aftermarketonline.net provide a full charge in as little as an hour, and an 80% charge in as little as 20 minutes, while others require several hours. Overnight charging is often available, but the length of time required can vary depending on the model and station type. The cost of charging also varies depending on vehicle type, location and the charging station, as well as associated fees. On the positive side, in the UK, recent figures show a driver exclusively using rapid or ultra-rapid public chargers pays 18 pence per mile for electricity, compared with 19 pence per mile for petrol and 21 pence per mile for diesel. EV software companies provide essential solutions The evolution of charging technologies is following a typical pattern of innovation that both improves performance and commoditises hardware, so the EV equipment cost and charging time will rapidly drop in coming years. Software innovation then becomes the real enabler of EV scaling by addressing the industry’s remaining key challenges. On the issue of EV charging infrastructure availability and managing its impact on the power grid, there are already many companies solving the painpoints here. This revolves around cities and EV charging companies planning placement of chargers, utilities monitoring strain on the grid resulting from EV charging, and EV drivers planning their trips. PredictEV, Volta Charging’s proprietary network planning software, uses machine learning to predict current and future EV charging needs, from infrastructure load requirements to site-level specifics. The software can forecast current and future demand with high levels of accuracy, allowing for precision network expansion. State governments in the US are now using PredictEV to identify optimal and equitable charging locations. For grid management, we have companies such as London-based Kaluza. The company’s advanced platform helps utilities manage the impact of EV charging on electricity grid demand by providing an intelligent, distributed system that can monitor, control and optimise charging. Kaluza uses an AI-driven approach to predict EV charging behaviour and reduce peak demand, while also optimising energy costs by intelligently scheduling charging to coincide with low energy demand and lower electricity rates. Similarly, WeaveGrid’s data-driven platform ensures the grid can accommodate electric vehicles safely by helping utilities in the US find EV drivers, analyse and gather insights on charging patterns, enrol them in managed charging programs and EV-specific rates and incentivize beneficial charging habits. For journey planning, there are a number of apps that help drivers optimise their trips both from a timing and cost perspective. For instance, in the UK, Zap-Map has almost all public charge points mapped, showing live status data. Its paid version offers What3words navigation, charging network filters, charger ratings and display on car screen. On the issue of improving the ROI of EV charging infrastructure and reducing the cost of charging session, a number of software companies are tackling the challenges here. Most use-cases revolve around real-time monitoring and improving demand flexibility to reduce charging costs. In Europe, The Mobility House developed the easy-to-use and hardware agnostic ChargePilot platform that provides B2C and B2B owners of EV charging stations with a management system for monitoring, maintenance, schedule-based load management and billing. All these capabilities that result in improved user experience and cost savings are provided across multiple geographies e.g. in Munich, Zurich, Paris or Belmont, California. Based in Denmark, Monta’s EV charging management software serves drivers, companies, cities, and the electricity grid with one integrated software solution. It makes it easy for businesses to maximise the charging efficiency of their EV charging infrastructure. It offers detailed analytics, real-time monitoring, dynamic pricing capabilities and automatic billing and payment. For drivers, Monta, which is present in nine European countries, helps consumers control their home charge point, identify public charging locations and schedule charging session when electricity is cheapest and cleanest. Energy goes one step further in solving energy management and cost of charging sessions by pivoting from monitoring to optimisation through predictive suggestions. Its software platform automatically schedules charging session depending on electricity prices and leverages home solar panels to obtain free green energy. Lastly, as more commercial vehicles and fleets are electrified, software is more crucial than ever to manage fleets, since companies have to plan deliveries based on charging status of each vehicle. Vulog and Autofleet are leaders in EV fleet management. Vulog’s integrated software and data solutions power shared mobility services such as car-sharing, ridesharing, and bike-sharing. Autofleet’s cloud-based software platform helps businesses manage fleet vehicle maintenance, driver safety, fuel monitoring, and route optimisation. With the ownership of vehicles increasingly becoming shared and electrified, the ability to merge EV charging infrastructure management with vehicle sharing becomes very important and determines both the adoption of the shared ownership model of vehicles and electrification of commercial fleets EV software will become the key enabler of EV scaling and ultimately a key enabler of the energy transition As the EV adoption scales, systematic maintenance of EV infrastructure will become crucial. Whilst EV charger monitoring exists today, the concept The key link to mass EV adoption is now software, not hardware or vehicles ”
MAY 2023 AFTERMARKET 17 of smart, ‘self-healing’ EV chargers are not yet widely adopted. We believe this capability will be software-led, as evidenced by the smartphone market (where your smartphone learns from your daily charging habits to improve the lifespan of your battery). Today, companies such as Driivz claim they can already address up to 80% of operational problems related to EV chargers remotely, by leveraging automated self-healing algorithms. As a result, issues with EV infrastructure can be automatically diagnosed and proactively fixed (even remotely) which maximizes network availability and stability. From a user point of view, EVs need to be charged much more frequently than gasoline vehicles. Instead of the typical 40 annual fuelling sessions for a gasoline car, an EV may need 500 or more yearly charging sessions. The nature of these sessions is different i.e. not just one-way, full charge every time. This presents opportunities for software to play a role in the optimisation of the charging sessions and to take advantage of those daily www.aftermarketonline.net interactions to upsell users various services. In the long run we anticipate the emergence of super-apps from the EV charging software sector, which will fuel significant additional growth. Finally, EV charging software will be instrumental to the transition towards renewable energies. According to Virta Global, there will be 140-240 million electric vehicles globally by 2030, which means there will be at least 140 million batteries with an aggregated storage capacity of 7TWh, or 7,000GWh. In 2021, only 2.4GW of storage was developed in Europe, but various studies predict we’ll need around 200 GW of energy storage by 2030. EVs will provide crucial power storage to support the generation of renewable energy, using vehicle-togrid (V2G) technology. As more V2G protocols continue to be developed (currently mostly dominated by CHAdeMO-type chargers), we see software playing a larger role to harmonise the different standards/protocols. A whitepaper from Kaluza shows a typical EV sits parked 90% of the time with a battery capable of storing 40kWh of energy – enough to power an average modern home for two days. Unlocking bi-directional charging will enable more affordable, highly resilient energy transition. Companies such as ev.energy and Kaluza are already exploring and developing, trialing, and deploying software in this space. This is done by engaging the automotive OEM early and forming close collaboration with regulators to implement frameworks that enable scale. These companies are now set to play a critical role in providing solutions to help take the strain off the grid and accelerate the transition toward renewable energies. Overall, we see EV charging software as one of the fastest growing, and potentially one of the largest, new software sectors in the market today. As the complexity and scale of EV charging networks increases, EV charging software looks set to eventually become a $50bn+ market, helping drive the global economy even faster toward net zero.
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