More effort needed to entice private buyers to EVs
25 March 2021
More needs to be done to support the private uptake of electrically-chargeable vehicles (EVs) in the UK, according to the Society of Motor Manufacturers and Traders (SMMT). New figures show businesses are twice as likely to make the switch from petrol and diesel.
Analysis of new-car registrations in 2020 shows that just 4.6% of privately bought cars were battery-electric vehicles (BEVs), compared to 8.7% for businesses and large fleets. This equates to 34,324 private registrations and 73,881 corporate ones.
In response to this, the SMMT has unveiled a new blueprint to deliver a greater retail uptake. With the UK government planning to ban the sale of petrol and diesel vehicles by 2030, the body believes now is the time to change people's attitudes towards EVs.
′While last year's bumper uptake of electric vehicles is to be welcomed, it is clear this has been an electric revolution primarily for fleets, not families,' commented SMMT chief executive Mike Hawes. ′Manufacturers are committed to the consumer, reducing costs and providing as wide a choice as possible of zero-emission capable vehicles with many more to come.
′To deliver an electric revolution that is affordable, achievable and accessible to all by 2030, however, government and other stakeholders must put ordinary drivers at the heart of policy and planning.'
According to the SMMT, as of March 2021, manufacturers have brought more than 150 BEV, plug-in hybrid (PHEV), hybrid and hydrogen fuel-cell electric vehicles (FCEVs) models to the UK market. BEVs and PHEVs alone account for 25% of all available car models.
However, current higher costs of components' raw materials mean these vehicles are inherently more expensive to manufacture. This implies an EV will retail for more than its fossil fuel equivalents.
Manufacturers are working hard to bring the cost of production down. Yet, they are constrained by lower demand and battery production costs, which have yet to reach the economies of scale required. Batteries have the biggest overall impact, representing 30-45% of the total production cost the SMMT states. BEVs are not expected to reach purchase cost parity with their internal combustion engine (ICE) counterparts across all car segments in the next few years.
The area where EVs benefit their drivers is in terms of running costs. This is of particular interest to businesses. In addition, company car drivers currently receive stronger and longer-lasting motivation through reduced purchase-taxes and fiscal incentives compared to consumers.
Last week, the UK government announced it will reduce the plug-in car grant and lower the price threshold for eligibility. This effectively adds £500 (€583) to the purchase price of all qualifying EVs under £35,000, and £3,000 to the price of those above £35,000.
By comparison, private buyers in Germany receive a €9,000 grant towards a new BEV, while Dutch drivers do not pay VAT on BEV purchases, equivalent to a purchase cost saving of around a sixth.
The SMMT estimates that maintaining the grant and similarly exempting consumer EV purchases from VAT would increase uptake by almost two-thirds by 2026 compared to current predictions.
The blueprint also calls for more to be done to expand the UK's EV infrastructure. Private-buyer acceptance remains low because of affordability concerns, charge point availability and infrastructure reliability, according to the SMMT. Around one in three households have no dedicated off-street parking, leaving them disproportionately dependent on public-charging points.
The SMMT's projections suggest that most drivers will choose to charge their vehicle at home if they can. Therefore, they estimate there would need to be around 2.7 million public-charge points in service by 2030 to provide adequate coverage and tackle range anxiety. The SMMT believes there are around 40,000 charging points in the country, most of which are in London.
This means more than 700 new charge points would have to be installed every day until the end of the decade. By comparison, the current installation rate is approximately 42 a day, according to information provided to the SMMT from charge-point mapping service ZapMap. Funding this expansion is estimated to cost around £17.6 billion.
′We need incentives that tempt consumers, infrastructure that is robust and charging points that provide reassurance, so that zero-emission mobility will be possible for everyone, regardless of income or location,' stated Hawes. ′When every market is vying for these new technologies, a clear and collaborative strategy engaging all would ensure the UK remains an attractive place both to manufacture and market electric vehicles, helping us achieve our net-zero ambition.'