Having first appeared around ten years ago, the market’s first Electric Vehicles (EVs) were cars with around 80 miles of usable range, priced at a 50 per cent premium over their petrol-fuelled counterparts. Today, in many cases, real-world range has more than doubled and that price premium has almost disappeared.”
Source: Autocar, Top 10 Electric Vehicles 2020
To put the EV market into perspective, according to the Society of Motor Manufacturers (SMMT), there were almost 35 million cars on the road in the UK in 2018. [Source: SMMT Motor Facts 2019]. Factor in vans (4.4m), trucks (0.6m and bus & coaches (<0.1m) and this added up to roughly 40m vehicles.
Of this total, less than 1% (195,410) were categorised as plug-in cars; i.e. EVs. Cross-checking this against official government data, we get a very similar number (186,399 plug-in cars and light vehicles per VEH0131).
So, EVs do not currently represent a statistically significant proportion of the UK vehicle market.
However, there are 3 reasons why the EV market is set to explode.
1. The EV market is growing quickly from a very low base.
Although EVs account for <1% of total vehicles, they represent >6% of new registrations.
Of the 2.4m new cars sold in 2018:
- 1.5m petrol (63%)
- 0.75m diesel (31%)
- 0.15m Alternative Fuel Vehicles ‘AFV’ (6%)
Source: SMMT 2018
Note that some care needs to be taken with the different definitions used; it would appear that the SMMT includes hybrid vehicles not covered in the official government definition.
Cross-checking this against official government data, we get a similar trend in the year-on-year growth in sales of EVs (+21%), but a rather different headline figure of 64,000 new registered EVs [Source: YouGov, VEH0170], which is less than half the SMMT’s new AFV figure of 140,000.
2. EV tax breaks are exceedingly attractive
Factor in government grants (£500 from OLEV for fitting EV charging points) along with very generous individual and company tax breaks and the trend in EVs looks set to grow exponentially.
Anybody thinking of changing their company car in 2020 will be sorely tempted by the prospect of ‘free commuting’ for the next 3 years; i.e. no benefit in kind tax on either the value of the vehicle or the provision of electricity at the workplace.
3. Government-baced EV infrastructure and Low Emission Zones
The Chancellor of the Exchequer announced at Budget 2017 that the government would, in partnership with the private sector, establish a new electric vehicle charging infrastructure investment fund (CIIF).
The aim of the CIIF is to increase the amount of capital invested in the EV sector, thereby encouraging increased adoption of EVs.
It will comprise a £200m cornerstone investment by government to be matched by the private sector and is to be managed and invested on a commercial basis by a private sector fund manager.
This Fund will have a 10-year life, starting in 2020 and ending in March 2030.
Low, Ultra-low and Zero Emission Zones (LEZ)
There are currently two LEZs operational in the UK; the largest scheme is in operation in London , whilst a smaller one operates in Norwich.
However, an increasing number of towns and cities across Britain plan to introduce restrictions and bans on vehicles in a bid to reduce pollution levels (over 20 at the last count).
Birmingham City Council was the latest to publish its draft transport plan (Jan-20), which proposes banning car users from making ‘through trips’ to get from one side of city to the other and a 20mph limit on all residential roads.
The proposal aims to make Birmingham carbon neutral by 2030.
Electric cars are more popular today than they have ever been. And why wouldn’t they be?
An electric vehicle (EV) lets you travel in silence and produces zero emissions. You don’t have to pay road tax, you don’t have to worry about being banned from driving into cities in future, and the government will even give you a grant to buy one (for the time being!)
So, when at D&T we say that we are seeing a huge increase in the demand for EV charging points….it’s now official!
ULEV: Ultra-low emission vehicles (government definition)
AFV: Alternative Fuel Vehicles (SMMT definition)
SMMT: Society of Motor Manufacturers
CIIF: Charging Insfrastructure Fund
LEZ, ULEZ, ZEZ: Low, Ultra-Low, Zero Emission Zones
CAZ: Clean Air Zone