The world has begun a rapid switch to electric vehicles. In the first half of this year, worldwide sales were up 57 per cent to 285,000, despite low oil prices, and there are now more than 1m electric cars on the world’s roads for the first time ever.
Last February, Bloomberg New Energy Finance (BNEF) forecast that electric vehicles would account for 35 per cent of new car sales by 2040, and perhaps more under certain scenarios.
The reason for this bullishness is not just that battery costs are plummeting – down 65 per cent in the past five years – it is also that electric vehicles outperform internal combustion cars in so many key areas. They drive more smoothly and accelerate better; they can be charged without a trip to the petrol station; they require less maintenance; they help solve air quality problems; and they increase the autonomy of oil-importing countries.
The rapid uptake of electric vehicles has given established car companies a huge shock. Tesla, the upstart technological leader, expected to produce 85,000 vehicles this year, has a market value of $32bn. That’s more than half of the value of General Motors, which makes nearly 120 times as many vehicles.
All of the incumbent car companies are racing to adjust their strategies, putting electric vehicles at their heart. Volkswagen, still reeling from the “Dieselgate” scandal, is intending to invest $11.2bn over the next decade to push electric vehicles to 25 per cent of its sales.
A DIESEL car scrappage scheme could soon see Brits earn up to £8,500 for their clapped-out old vehicles.
Anyone in the UK with a diesel car or van more than 10 years old is likely to be eligible to get whopping discounts off a low-emission replacement.
The Government is keen to rid Britain’s roads of diesel cars by 2030 and officials are considering copying an extremely successful French scheme, where drivers of the worst polluting cars are effectively handed up to €10,000 to switch to a new, super-clean model. More than 100,000 people in France now drive all-electric cars, which are now more popular in the country than hybrids.
Officials from the Departments for Transport and the Environment are in advanced talks about the plan, which could be announced by Chancellor Philip Hammond as soon as the Budget on March 22.
Ministers are conscious that successive governments encouraged drivers to buy diesel until recently, wrongly believing they were better for the environment. As a result, the new scheme will incentivise diesel drivers to switch, rather than punish them.
It follows a hugely successful scrappage scheme for old cars introduced in 2009 which saw 300,000 drivers replace their car in the first year. Under that programme, designed to boost the car industry in the wake of the recession, motorists were given £1,000 from the Government – matched by car manufacturers – to change their vehicle. It boosted new car sales by as much as 26%.
The new scheme would be far more ambitious by seeking to replace the most-polluting cars in Britain with the very cleanest, with punchy discounts to match.