Electric dream or motoring nightmare?

THERE’s still a lot of suspicion around pure-electric vehicles (EVs), and for some car buyers they’re still not the answer. But the number of electric cars on sale is increasing rapidly, and so is their appeal, meaning many drivers are taking the plunge.

In March 2021, electric cars made up 8% of all new cars sold, up from 5% in the same month the year before. Improvements in battery technology are reducing cost and charging times, as well as increasing energy density (and therefore how far they can travel per charge).

So on Earth Day 2021, and ahead of the ban on the sale of new petrol and diesel cars in 2030, we ask: is now the right time to buy an electric car?

How much does an electric car cost?
Electric vehicles are still more costly to buy new than internal-combustion alternatives. A Vauxhall Corsa e, for example, is around £5,000 dearer than an equivalent Vauxhall Corsa with a petrol engine. This is because battery packs are costly to manufacturer, at present.

However, car makers are offering great deals on new electric cars (Vauxhall covers electricity costs for the first 30,000 miles, for example), and eventually there will be cost parity: according to Bloomberg, a battery pack today is responsible for 30% of an electric car’s cost, down from an estimated 57% in 2015.

A few years ago, buyers were also put off by the expected rapid depreciation of electric cars, with their value plummeting further in the first few years of ownership than internal combustion engine (ICE) cars. However, this has proved not to be the case because battery packs are not deteriorating as fast as expected, and because electric cars are still relatively scarce. By some estimates, electric cars now retain their value better than ICE cars, and premium models such as Teslas, which are some of the most popular electric cars, are holding their value extremely well.

Some in the car industry believe incentives to encourage drivers to buy electric cars aren’t as strong as they could be. In order to end what a Whitehall source labelled the “Tesla subsidy”, the government last month reduced the scope of its Plug-in Car Grant (PiCG). The total that buyers are able to claim off the cost of a new electric car has been reduced from £3,000 to £2,500, while the grant is only applicable to cars costing under £35,000, rather than £50,000 as before.

However, there are still a number of vehicles covered by the grant, and they’re not just from quote-on-quote “budget” car makers — there are models from more premium car makers like BMW, DS and VW on which you can get a discount.

What are the running costs of an electric car?
Ownership of electric vehicles affords other benefits. Electricity costs vary depending on supplier and tariff but generally, if you charge up at home the cost per mile is much less than that of a petrol or diesel car.

In addition, electric cars don’t attract any Vehicle Excise Duty (VED, often referred to as “road tax”) for the first year of ownership, and if you live in London you’re exempt from fees in the Ultra Low Emissions Zone (ULEZ) and Congestion Charge zone.

If you’re considering getting an electric model as your company vehicle, it’s also worth bearing in mind that Benefit-in-Kind tax is just 1% on electric vehicles. That’s compared to at least 14% on cars with more than 50g/km of carbon emissions.

Maintenance costs should be significantly lower because an electric car is relatively simple. Aside from checking the brakes regularly and filling up the screen wash, most EVs don’t require much in the way of routine maintenance – there are no oils or filters to replace, no turbochargers to go wrong and no transmission to fail. So far, electric motors themselves seem to be very reliable — there’s effectively only one moving part.

It’s the cost of a replacement battery pack that puts off a lot of potential EV buyers, but there might be little to worry about on this front, too. Some EVs come with leased batteries, so they’ll just be replaced if necessary. When bought, most batteries have a warranty of around eight years years or 100,000 miles (whichever comes first).

What’s more, problems with battery packs might be traced to the failure of individual modules, which can be swapped out at minimal cost.

If you do need to fit a whole new battery pack you’ll potentially have to stump up some eye-watering amounts of cash. Manufacturing the 80.5kWh battery in a Tesla Model Y reportedly costs Tesla $9,250 (£6,670). Smaller batteries will obviously be cheaper to replace, but you’re still looking at £4,900 to replace the 40kWh battery in a Nissan Leaf hatchback.

But again, reliability after years of use seems to be pretty good and owners generally don’t complain of significant fade from older models.

How far can electric cars travel per charge?
There’s no escaping the fact that electric cars can be less convenient than internal combustion-engined alternatives. They often have a shorter range before they have to be refuelled (recharged), and that process takes significantly longer.

However, range is also improving significantly: the new Mercedes EQS can manage 479 miles on a single charge, while Tesla claims that the Model S Plaid can achieve a staggering 520 miles.

Those two are expensive electric cars but even the Peugeot e-208, which costs from £27,225, can manage more than 200 miles per charge.

Read more: DRIVING – The SUNDAY TIMES

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Switching to zero emission motoring is hot topic right now, and the results show there is support as seven in ten petrol and diesel drivers said they would consider going electric

The automotive industry is on the cusp of a revolution as 70 per cent of European motorists would consider getting an electric vehicle for their next car.

A survey of 3,500 petrol and diesel, and 3,500 electric car owners spread across seven countries and regions – including the UK – examined EV satisfaction and attitudes other drivers have towards switching to zero emission motoring.

Overall, 89 per cent of EV drivers said going electric was the right decision.

And 97 per cent of EV drivers described the transition from the internal combustion engine (ICE) to EV was as expected or easier.

Seven in 10 petrol and diesel drivers said they would consider going electric – with the environmental benefits topping a list of reasons why, according to the large-scale study commissioned by Nissan.

Arnaud Charpentier, Region Vice President, Product Strategy and Pricing, Nissan AMIEO, said: “With this new research, we’re seeing first-hand that European drivers are embracing electrification.

“Just as drivers are continuing to explore what electric vehicles have to offer, we are committed to showing drivers the vast benefits of electric mobility and how easy actually it is to make the switch.”

The majority (70 per cent) of EV drivers surveyed said the range autonomy of their electric car is better than expected before purchase.

This counteracts the 58 per cent of ‘ICE’ owners who consider EVs to offer low driving range.

Almost one third (34 per cent) of EV drivers made the decision to switch thanks to the advanced technology offering in electric cars, demonstrating the key role these features play in enhancing enjoyment behind the wheel.

A similar number (31 per cent) of ICE drivers considering an EV also confirm the advanced technology is tempting them to convert, making its role in the electric revolution more prominent than ever.

Low running costs are a big driver for 31 per cent of ICE owners considering the switch – while 83 per cent of EV drivers say their car has lower running costs than an EV.

Nissan launched a collection of testimonials, ‘ My Life with a Nissan LEAF ‘, to highlight owner experiences from around the world.

Among those were Neil Swanson, from Scotland, who initially won a LEAF trial in a competition. He then purchased one and has driven more than 80,000 miles in it since.

Nissan estimates LEAF owners have prevented more than 2.5 million tonnes of CO2 from being emitted into the atmosphere globally.

Read more: Mirror

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UK new car registrations grew for the first time since August 2020, according to new data from the Society of Motor Manufacturers and Traders (SMMT).

The latest figures showed the shift to new technologies is continuing, with plug-in vehicle demand reaching its highest ever volume. Battery electric vehicles (BEVs) and plug-in hybrid vehicles (PHEVs) took a combined market share of 13.9%, up from 7.3% last year as the number of models available to customers increased from 72 to 116.

Across the market, 29,280 more units were registered during March – a rise of 11.5% – compared to the same month last year. The month represents a year since the first lockdown in March 2020, which saw registrations fall by 44.4%.

In February, the UK new car market declined by 35.5% as 28,282 fewer units were registered.

Registrations of BEVs increased by 88.2% to 22,003 units, while PHEVs rose by 152.2% to 17,330. Hybrid electric vehicles (HEVs) also rose 42.0% to reach 21,599 registrations.

BEV and PHEV electric cars together accounted for more than one in 10 registrations in 2020 – up from around one in 30 in 2019, amid a turbulent year for the new car market.

The number of EVs on UK roads is expected to exceed that of diesel-powered models by 2030, according to research by The AA.

Compared with the 2010-2019 March average of 450,189, registrations were down -36.9%, with 283,964 units registered. So far, 2021 has seen 58,032 fewer cars registered compared to January to March last year, equivalent to a loss of £1.8 billion in turnover during the first quarter based on the JATO estimated average new car price of £30,729.

With showrooms ready to open next week on April 12, the SMMT said for the sector to return to its pre-pandemic levels, around 8,300 new cars will need to be registered every day for the rest of the year.

By comparison, the industry has averaged around 7,400 a day during the past decade and current levels are closer to 5,600 a day.

While overall registrations were slightly up compared to last year, growth came almost entirely from fleets, which saw a 28.7% increase in registrations. Retail consumer demand remained depressed, falling by -4.1% compared to March 2020 as showrooms remained closed for the duration of the month.

Mike Hawes, SMMT’s chief executive, said: “The past year has been the toughest in modern history and the automotive sector has, like many others, been hit hard. However, with showrooms opening in less than a week, there is optimism that consumer confidence – and hence the market – will return.

“We know we will see record breaking growth next month given April 2020 was a washout, but a strong, sustainable market is possible if customers respond to the choice and competitive offers the industry provides within the safest of showroom environments.

“New plug-in models are already helping drive a recovery but to convince more retail consumers to make the switch, they must be assured these new technologies will be convenient for their driving needs and that means, above all, that the charging infrastructure is there where they need it, and when they need it.”

Following the post-Brexit trade deal, the SMMT said the UK must secure investment in battery gigafactories “at pace”.

The Government recently announced a £30 million investment to help support research into battery technology, the electric vehicle (EV) supply chain and hydrogen vehicles.

The funding comes ahead of the phasing out of the sale of new petrol and diesel cars by 2030, as pledged in the Government’s Ten Point Plan.

Read more: SMART TRANSPORT

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CAR TAX changes introduced last year have made owning electric cars “significantly cheaper” than petrol or diesel models, according to Octopus Electric Vehicles CEO Fiona Howarth.

Ms Howarth says updates to benefit in kind rates on electric company cars has allowed employees to save up to 40 percent on their monthly car costs. The massive savings has led to a surge in demand for vehicles with interest having “never been higher”.

She said enquiries over salary sacrifice car tax schemes have increased “sevenfold” in the last year as drivers are desperate to secure cheap electric cars.

Benefit in kind rates were completely scrapped for electric vehicles in April 2020, dropping from 16 percent to zero.

Ms Howarth said: “Salary sacrifice makes electric cars a no brainer – making them significantly cheaper than their petrol or diesel counterparts.

“And with incredibly low company car tax rates on EVs, demand has never been higher.

“Almost a third of employees want the option of an EV as a company car and our own enquiries from businesses have risen seven-fold in the last year alone.

“The government has made this possible with incredibly low company car tax rates on EVs, giving businesses an opportunity to offer their team a hugely valuable benefit, whilst also doing something great for the planet.

“Employees are delighted to see how they can save 30-40 percent every month on their car costs, by saving on income tax and national insurance.”

Her comments come just a day after benefit in kind rates were increased for electric vehicles.

Costs rose from zero to one percent for fully-electric models in an increase which could cost some drivers over £100 per year.

But rates were still lower than many petrol and diesel cars which are now paying over 30 percent in benefit in kind charges.

Ms Howarth has previously warned the increase was a “negligible” rise and predicted demand levels would not slow down despite the extra charges.

She added: “Salary sacrifice is essentially a zero-cost, zero-effort tool for businesses to fight climate change and save the planet.

“If just 10 percent of UK employees switched to electric – we could decimate CO2 emissions of cars, while collectively saving almost £4bn per year.

To help boost the takeup of fully-electric models, Octopus Electric Vehicles have launched a new Electric Dreams service.

The new programme will support the growing number of employees looking to access salary sacrifice schemes across the UK.

They said the new scheme will give employees access to every electric vehicle on the market today with a range of over 100.

They said an extra 20 cars will be added to the scheme later in 2021 to ensure vehicles are available for every type of road users.

James McMaster, CEO of fitness firm Huel, who have signed up to Octopus’ new programme said the scheme will offer “real benefits” to employees.

He said: “We’re not the sort of company that would go with a traditional car scheme.

“Being able to offer something that promotes cleaner transport has been a real benefit to helping our team live our mission of a more sustainable world .

“They are amazed at what a brilliant deal this is.”

Read more: Express

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Plug-in vehicle sales account for almost 14% of all new car sales in March

UK electric and hybrid car sales hit record levels in March, traditionally the biggest month of the year for motor dealers, as demand for greener vehicles surged despite overall trade remaining lower than before the pandemic.

Sales of battery electric cars and plug-in hybrids accounted for a combined 13.9% of the market, up from 7.3% a year earlier, in a sign of the accelerating switch to cars with lower carbon exhaust emissions, according to preliminary data from the Society of Motor Manufacturers and Traders (SMMT).

Buyers picked up 22,000 electric cars and another 17,000 plug-in hybrids, which combine a battery with an internal combustion engine.

Car number plates change in March, meaning many buyers hold off until then in order to keep a higher resale value. However, the pandemic has depressed sales for more than a year, and the latest data shows last month’s numbers were still down about 37% below average March levels of 450,000 between 2010 and 2019.

The market has improved compared with March 2020, when the first lockdown began, with new car registrations rising 11% last month to 284,000.

Car dealers have managed to eke out increased sales during lockdowns by bringing in new ways of shopping, including click and collect. The lobby group estimates that the car industry has lost £22.2bn in sales over the past year, but is hoping for a bounce-back as showrooms reopen.

Sales data will be flattered for the next few months by comparisons with the early stages of the pandemic in spring 2020, when all dealerships in the UK were forced to close. In April 2020 – the first full month of lockdown restrictions – sales dropped by 97% to their lowest level since the aftermath of the second world war.

Mike Hawes, the SMMT chief executive, said there was optimism in the industry that sales would recover after the toughest year in modern history for the automotive sector.

“We know we will see record-breaking growth next month given April 2020 was a washout, but a strong and sustainable market is possible if customers are attracted to the choice and competitive offer the industry is able to provide within the safest of showroom environments,” he said.

Dealers will be allowed to welcome customers into shops on 12 April in England, the largest UK market, when non-essential shops will reopen.

Read more: The Guardian

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European sales of fossil fuel vehicles took a massive hit last year, dropping by 5 million vehicles or more than a third compared to 2019. Meanwhile, electric vehicles appeared immune to the coronavirus as their sales more than doubled. EVs are gaining a foothold in Europe.

The success of electric vehicles (battery electric vehicles – EVs/BEVs) despite the pandemic goes to show that an increased availability of different models, improved technology and favourable framework conditions are altogether starting to convince consumers to make the switch to electromobility.

In 2020 Europeans reduced their spending overall due to the pandemic[1], and cars were no exception. EV sales, though, appeared unphased by COVID-19 as their sales increased by 107 %. The very same pandemic saw fossil fuel vehicle (internal combustion engine vehicle – ICEV) sales plummeting.

Looking at the data from most European markets[3], diesel vehicle registrations had been in decline for a few years already, partly due to Dieselgate and rigorous air pollution measures across Europe. In 2020 they continued their downward trend in new car registrations, albeit at an accelerated pace, ending up at just over 3 million units. That’s a decrease of 35 % compared to the almost 4.8 million units registered in the previous year.

Petrol vehicles had a similar decline at 37 % in the same markets; however new petrol car sales had been steadily rising prior to 2020, meaning the pandemic impact on petrol cars was even greater. New petrol car registrations ended up at just above 5.7 million, a reduction of 3.4 million from the almost 9.2 million new vehicles registered in 2019.

Overall, then, cars relying solely on combustion engines for propulsion lost more than 5 million sales last year, slashed by more than a third from the year before.

Turning our attention to pure electric vehicles (battery electric vehicles, BEVs), sales skyrocketed – at least relatively speaking. EV sales more than doubled in 2020, from 359,000 in 2019 to 745,000. A 107 % increase is a huge one, even though total sales volume is still not up there with petrol and diesel.

Put differently, it becomes instantly clear that electric vehicles are closing the gap to fossil fuel vehicles: In 2019 Europeans bought one EV per every 39th fossil fuel vehicle. In 2020, the balance shifted to one EV per every 12th fossil fuel vehicle.

Hybrid vehicle sales went up as well. Plug-in hybrid vehicle (PHEV) sales actually more than tripled. In total numbers, though, hybrids were still outsold by pure EVs.

One might think that demand for EVs is more resilient to a pandemic because their buyers are more financially resilient, given the higher purchase price of an EV compared to a fossil fuel equivalent. Actually, the numbers suggest this is not the case. For new cars in general, demand dropped for both compact cars and large SUVs, by 24 and 6 percent respectively[4], meaning cars at both ends of the price range were negatively affected – albeit SUVs a tad less so. This in stark contrast to the aforementioned sales increase of EVs by 107 percent.

Moreover, due to falling production costs and EV-friendly incentive schemes across Europe, EVs are not that comparatively expensive anymore. The average price paid for a new car in the UK regardless of fuel type was £33,600[5] in 2018. The new average-sized “people’s EV” from Volkswagen, the ID.3, starts at £31,700[6]. And that’s just the purchase price – factoring in the total cost of ownership, even the most expensive ID.3 at £42,300 will likely outperform the average petrol car in terms of cost within a few years. Romania will give you a €10,000 grant to purchase an EV if you scrap a fossil fuel vehicle at the same time. In fact, 26 out of 27 EU countries plus the UK, Norway, Iceland and Switzerland all favour EVs in their taxation system, through grants and/or by other means[7].

In other words, economic inequalities between the average car buyer and the average EV buyer may only explain a small part of the discrepancy in new car registrations. At Bellona, we firmly believe that the numbers prove that car buyers have more faith in electric vehicle technology than conventional vehicle technology – the pandemic has just proved that EVs are future-proof.

If we try to imagine what would have happened without the pandemic, by just following the trendlines, diesel would probably have continued its decline whilst petrol sales could still have been increasing. Actually, already by the third quarter of 2020 new car registrations had bounced back to near pre-pandemic levels, and from Q3 to Q4 total sales remained almost level whilst petrol decreased notably, and electric sales increased by 128,000 units quarter-on-quarter. This strengthens the hypothesis that EVs didn’t just experience a temporary pandemic boost.

Read more: BELLONA

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Of all the issues facing the broker market in 2021, possibly the biggest is staring us in the face. And yet I can find hardly any expressions of concern or advice, on line or in person.

We know now that sales of new petrol and diesel cars are to end in the UK by 2030, but do we know how this momentous decision will impact the housing market?

Certainly I have not seen any lender, estate agents or surveyor factoring the impact of electric vehicles into their pricing.

But neither does it follow that as professionals, we should not be bringing the issue to the attention of our clients – especially in such a topsy-turvy market where people in search of a home as a long term investment have never been as in need of, or receptive to, expert advice.

Brokers are faced with a genuinely unique opportunity to gen up on this dynamic subject, study local authority plans and debates and put themselves in a position of strength with which to help their clients.

This will, after all, be one of the most important development effecting house pricing over the next two decades.

The broker is still the only provider of sound and objective financial advice to whom most of us can turn when it comes to a buying a home, and right now our customers want more than just figures.

They want opinions. It’s not just about finances when societal issues are about to play such a massive part in undermining asking prices and second guessing conventional valuations.

No broker, no comment
EastEnders and Coronation Street live in a cosy parallel reality, but any broker serving an urban market is faced with a different scenario.

The fictional street scape of the 1920s bears no relation to the densification of the 2020s.

Universal charging points will see cuts to parking spaces of upwards of 60% on some residential roads.

This will have a direct effect on demand. Blocks of flats with no parking and terraced houses are the most vulnerable of all to stagnating prices.

Smart houses in leafy suburbs, where off and on street parking is plentiful, however, will enjoy an easier path to electrification, with a direct effect on price.

That said, there are no simple answers. Urban locations won’t be the only one to suffer. The hearts of many small to medium more rural towns and villages are also strangulated with parking problems.

A loss of around a quarter of local parking spaces will have a dramatic impact.

You might argue that demand for housing will rise, that the economy will prove resilient to Brexit and that valuations will maintain conventional trajectories.

But it’s by no means a stretch to suggest that the value of properties without parking or designated electric vehicle bays will suffer, while those with their own car charging or designated bays could easily increase by 15%-20% – over and above the 5-10% increase in value that having parking spaces already commands.

It’s micrographics, not just demographics
That’s why the advice you give has to be granular. For homeowners and landlords, demand will invariably fall for certain types of property. But rise for others.

In many London boroughs car ownership is already falling among younger people, motivated by electric scooters and excellent public transport.

Read more: Mortgage Introducer

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A car industry body has called on the government to support uptake among private buyers.

Two-thirds of all new electric cars bought in the UK are purchased by businesses, rather than private buyers, according to a leading industry body. The Society of Motor Manufacturers and Traders (SMMT), which records ‘official’ figures on new car sales and production, says the growth in the electric car market is being driven by the corporate sector.

According to the SMMT data, sales of electric cars rocketed in 2020, with the market up 185.9 percent compared with 2019. In total, more than 108,000 new electric cars were registered, giving the technology a total market share of 6.6 percent.

But the picture looks different when you split those sales between private consumers, who registered 34,324 electric cars in 2020, and companies, which registered 73,881 new electric cars. And battery-electric cars made up 4.6 percent of all new cars sold to private buyers last year, whereas they accounted for almost nine percent of corporate registrations.

Of course, the corporate sector has always made up a large proportion of new car sales, and these figures may not come as a great shock to industry insiders. In total, so-called ‘fleet’ sales made up 53 percent of all new car registrations last year, while private customers accounted for just 44 percent of the market.

And when it comes to electric cars, it’s companies and company car drivers that get the lion’s share of incentives. Tax rates have been cut, so electric cars now only incur Benefit-in-Kind (BiK) tax at one percent for the 2021/22 financial year. And in 2020/21, drivers didn’t have to pay a penny in company car tax.

However, both private and corporate customers will have felt the impact of changes to the government’s Plug-In Car Grant, which was slashed for cars costing £35,000 or more. The grant was also reduced, so eligible cars only saw their prices cut by £2,500, rather than the earlier £3,000.

Now, the SMMT says more must be done to help consumers into electric vehicles – particularly in light of the government’s plan to ban the sale of new petrol and diesel cars from 2030. The organisation says consumer acceptance of the technology is still low because of “concerns over affordability, charge point availability and infrastructure reliability”.

And the SMMT claims encouraging customers to make the switch will require more than just a few financial incentives; it also wants to see accelerated growth in electric vehicle charging infrastructure. In fact, the trade body says its estimates suggest the UK will need around 2.3 million public charge points in service by 2030 to provide “adequate coverage”. To achieve that figure, the country will need to install more than 700 charge points a day until the end of the decade. At the moment, the UK is installing around 42 chargers a day.

“While last year’s bumper uptake of electric vehicles is to be welcomed, it’s clear this has been an electric revolution primarily for fleets, not families,” said 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. 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.”

Read more: motor1

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