Is there still a buzz about electric cars?

Is there still a buzz about electric cars?

Is there still a buzz about electric?

On 19 December 2019, the Department for Transport released its vehicle licensing statistics for quarter 3 (July to September). During this period, 22,596 ultra-low emission vehicles were registered for the first time in Great Britain, an increase of 39% on the same quarter in 2018, and representing 3.1% of all new registrations. According to a study by the Society for Motor Manufacturers and Traders, at 5 December 2019, there were approximately 208,000 electric vehicles registered in the United Kingdom (comprising battery electric vehicles, plug-in hybrid electric vehicles, hybrid electric vehicles and mild hybrid electric vehicles), representing around 9.6% of the total number of vehicles licensed in the UK.

Despite the rise in the number of first-time registrations for electric vehicles in the United Kingdom (and a decline in registration of diesel vehicles), and the social pressure to “go green”, they still represent a very small proportion of vehicles in the UK overall. In this article we consider some of the factors that might be fettering the public’s willingness to buy electric.

Infrastructure

The most publicised challenge to increasing the number of electric vehicles on the road in the UK is the extensive infrastructure required to support a nationwide use of electric vehicles. Research from the European Alternative Fuels Observatory has shown that although the number of electric vehicle charge points per 100km of road in the United Kingdom has increased in the last decade, this will need to further increase if it is to support growth in the number of electric vehicles on the roads.

In 2018, the Government published its “Road to Zero Strategy”, outlining the long-term strategy for transitioning to zero emission road transport.  It sets out plans for developing the infrastructure required to facilitate the proposed increase in the number of electric vehicles on the road. This included a proposal to alter building regulations for new residential buildings to include requirements for electric vehicle charge points, encouraging workplaces to facilitate at-work charging and supporting the growth of the UK’s public charge point network, all whilst encouraging private investment into the industry. As at today’s date, the Government is still consulting on these proposals.

Without this infrastructure in place, and without a high-performing battery yet in mass production, so-called ”range anxiety” (the fear of running out of power without a charging point nearby) will remain.

Safety concerns

In recent months there have been concerns relating to the safety of the batteries contained in electric vehicles, in particular in relation to the risks of the lithium-ion batteries catching fire. There have been instances of Tesla vehicles catching fire, sparking fears amongst the public, despite reassurances from manufacturers and the Government that the risk of fire in an electric vehicle is no greater than that for petrol or diesel vehicles.

Despite those reassurances, it is widely known that fires resulting from lithium-ion batteries can be considerably more intense and cannot be extinguished using conventional means, hence additional training, equipment and general awareness will be required by emergency services and other “first-responders”.

The rise and rise of the SUV

If the above factors were not enough, the growing popularity and affordability of so-called “Sports Utility Vehicles” (SUV’s) is affecting the attractiveness of electric vehicle ownership.

In the past four years there have been sales of 1.8m SUV’s, compared to only 47,000 battery electric vehicles. SUV’s are traditionally heavier than standard cars, emit a quarter more carbon dioxide than a medium-sized car and nearly four times more than a battery electric vehicle, according to a report by the UK Energy Research Centre (“Are SUVs sabotaging the green transport revolution?” – 9 December 2019). Professor Jillian Anable, co-director at UKERC, comments:

The rapid uptake of unnecessarily large and energy consuming vehicles just in the past few years makes a mockery of UK policy efforts towards the ‘Road to Zero’

The reason for the increase in SUV’s is not wholly clear. Car manufacturers have picked up on the public’s demand for vehicles with an increased ride height, more internal space, and more rugged all-terrain appearance (suggesting that those that drive them are similarly rugged and “at one” with nature).

However, the UKERC consider that the demand goes beyond the practicalities of owning these vehicles. They are being made to appear more affordable. They argue that the abundance of attractive car financing packages are hiding the actual running costs of SUV’s, in that for the first year of many products such as Personal Contract Plans, the higher excise duties and other running costs are wrapped up into the monthly cost "rendering the only clear policy signal to discourage high-carbon vehicles somewhat useless”.

Nervousness of some manufacturers to enter the market?

In October 2018, technology company Dyson unveiled its plans to develop an electric car at a new plant in Singapore, with intentions to invest over £2bn in the venture. However, in early October 2019, Dyson announced that it was mothballing the project, citing a lack of commercial viability and a failure to find a buyer for the project. This move by Dyson, a large company with extensive resources and technical knowhow, suggests that electric vehicles are currently seen by many in the industry as costly and low-profit yielding. Dyson has, however, suggested that it will continue to develop a battery, intended for potential use in electric vehicles, indicating that they see this as a particular area for development in the electric vehicle industry.

It should be pointed out that this nervousness is not shared by those already in the automotive marketplace. In October 2019 Tesla announced that it would be building a £1.5bn factory in Shanghai to enable it to manufacture 1,000 of its Model 3 vehicles every week. In July 2019, Lotus announced the development of its “Evija” electric vehicle, although at £2.2m each and with only 130 being made, it is hardly aimed at the mass market. Furthermore, on 11 December 2019 the European Commission announced that it had cleared the creation of a joint venture between Daimler AG and Zhejiang Geely Holding Group Co (the owners of Volvo passenger cars) to develop, manufacture and distribute pure battery electric vehicles.

Conclusions

It is not unreasonable to state that motorists in the UK are generally in favour of the development of electric vehicles. Surveys have suggested that it is the insufficient battery range of electric vehicles, combined with an inadequate charging infrastructure that are the key barriers to people opting to invest in an electric vehicle.

The fact that in the UK government and industry is under great pressure to develop a vehicle that can assist with the eradication of fossil fuel vehicles will ensure that the technology is here to stay. However that technology must develop, and the infrastructure with it, if it is to become mainstream.

It should not be forgotten that Henry Ford developed the mass-produced Model T (generally considered to be the automotive “game-changer”) in 1913, yet the modern car (i.e. one that used a combustion engine) can trace its roots back to Karl Benz in 1886 and Gottfried Daimler in 1890. The modern motorist needs to be patient.

The author Michael Stocks is a co-head of the firm’s Automotive sector group.

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